[Federal Register Volume 67, Number 146 (Tuesday, July 30, 2002)]
[Rules and Regulations]
[Pages 49257-49263]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-18966]


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DEPARTMENT OF VETERANS AFFAIRS

48 CFR Parts 801, 825, 832, 836, 846, and 852

RIN 2900-AJ56


VA Acquisition Regulation: Construction and Architect-Engineer 
Contracts

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document amends the Department of Veterans Affairs 
Acquisition Regulation (VAAR). This document updates position titles, 
makes minor grammatical corrections and revisions, revises and updates 
section numbers and titles, relocates material to correspond to the 
Federal Acquisition Regulation (FAR), and delegates authority. In 
addition, the document updates regulations and adds coverage regarding 
the authority of the National Cemetery Administration to award 
architect-engineer contracts. Also, it replaces a general prescription 
directing the use of all VAAR clauses relating to construction 
contracts with specific prescriptions for each clause, removes obsolete 
or duplicative material, updates the VAAR regarding the requirement for 
certificates of current cost or pricing data, and provides agency 
procedures regarding disclosure of the Government cost estimate on 
construction contracts. This document also removes a ``guaranty'' 
clause from the VAAR and provides agency procedures for VA contracting 
officers to use the FAR ``warranty'' clause for construction contracts 
exceeding the micro-purchase threshold in order to protect the best 
interests of the Government. In addition, this document revises 
provisions regarding the acceptance of foreign construction materials 
to correspond to changes made in the FAR and to comply with the Trade 
Agreements Act and the North American Free Trade Agreement.

DATES: Effective Date: August 29, 2002.

FOR FURTHER INFORMATION CONTACT: Don Kaliher, Acquisition Program 
Management Team (0495A), Office of Acquisition and Materiel Management, 
Department of Veterans Affairs, 810 Vermont Ave., NW, Washington, DC 
20420, telephone (202) 273-8819.

SUPPLEMENTARY INFORMATION: On September 27, 2001, we published in the 
Federal Register (66 FR 49331) a proposed rule to amend the Department 
of Veterans Affairs Acquisition Regulation to make changes to part 836, 
Construction and Architect-Engineer Contracts, and related parts. 
Comments were solicited concerning the proposed rule for 60 days, 
ending November 26, 2001. We did not receive any comments.
    Based on the rationale set forth in the proposed rule, we are 
adopting the provision of the proposed rule as a final rule with 
nonsubstantive changes discussed below.
    The proposed rule included collections of information regarding 
clauses and provisions for use in both commercial and non-commercial 
item, service, and construction solicitations and contracts. The Office 
of Management and Budget (OMB) has approved the information collections 
under OMB Control Numbers 2900-0622 and 2900-0623.
    The intent of the proposed rule was to update the VAAR to match the 
FAR regarding the requirement for submission of certificates of current 
cost or pricing data, but the proposed rule referenced an incorrect 
dollar threshold of $500,000. The FAR threshold for submission of 
certificates of current cost or pricing data has been revised to 
$550,000 and will be adjusted in the future to account for inflation. 
Therefore, to match the FAR, Sec. 836.578(b) has been revised to 
clarify when cost or pricing data is required and Sec. 836.578(c) has 
been revised to reference the FAR threshold for submission of cost of 
pricing data rather than a specific dollar amount and for clarity. In 
addition, the FAR requires the approval of the head of the contracting 
activity prior to requiring submission of cost or pricing data for 
pricing actions below this threshold, so a reference to this approval 
requirement has been added to Sec. 836.578(c).
    The intent of the proposed rule was to update the VAAR to 
correspond to the FAR regarding the acceptance of foreign construction 
materials and to comply with the Trade Agreements Act (TAA) and the 
North American Free Trade Agreement (NAFTA). The proposed rule 
designated Alternate I to the clause at 852.236-89 for use when NAFTA 
applied to a solicitation. This was incorrect. Under the current dollar 
thresholds in the FAR, Alternate I should reference the TAA rather than 
NAFTA, since the dollar threshold for application of the TAA is less 
than the dollar threshold for the application of NAFTA. Therefore, 
Alternate I has been revised to apply to the TAA to correspond with the 
FAR.
    Also, we revised Sec. 832.111 for purposes of clarity and 
Secs. 836.209, 836.602-2, 836.602-4, and 836.603 to update titles and/
or for purposes of clarity.

Paperwork Reduction Act

    This document contains provisions constituting a collection of 
information that have been approved by the Office of Management and 
Budget (OMB) under OMB Control Numbers 2900-0622 and 2900-0623.

Executive Order 12866

    This document has been reviewed by the Office of Management and 
Budget under Executive Order 12866.

Regulatory Flexibility Act

    The Secretary hereby certifies that this rule would not have a 
significant economic impact on a substantial number of small entities 
as they are defined in the Regulatory Flexibility Act (RFA), 5 U.S.C. 
601-612. The changes are small-business neutral and will not have a 
significant economic impact on a substantial number of small 
businesses. Therefore, pursuant to 5 U.S.C. 605(b), this rule is exempt 
from the initial and final regulatory flexibility analysis requirements 
of sections 603 and 604.

List of Subjects

48 CFR Part 825

    Foreign currencies, Foreign trade, Government procurement.

48 CFR Parts 832 and 846

    Government procurement.

48 CFR Parts 801, 836 and 852

    Government procurement, Reporting and recordkeeping requirements.

    Approved: May 1, 2002.
Anthony J. Principi,
Secretary of Veterans Affairs.

    For the reasons set forth in the preamble, 48 CFR Chapter 8 is 
amended as follows:

PART 801--VETERANS AFFAIRS ACQUISITION REGULATIONS SYSTEM

    1. The authority citation for part 801 continues to read as 
follows:

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).


801.103-70  [Redesignated as 801.104-70]

    2. Section 801.103-70 is redesignated as section 801.104-70.

[[Page 49258]]


    3. In section 801.301-70, paragraph (b) introductory text is added; 
paragraph (b)(1) is revised; and the table in paragraph (c) is amended 
by removing ``852.236-81'', and adding in its place ``852.236-82'', and 
by adding in numerical order the following section and OMB control 
numbers to read as follows:


801.301-70  Paperwork Reduction Act requirements.

* * * * *
    (b) Contractors will not be requested to maintain systems of 
records unless prescribed in FAR or VAAR.
    (1) A deviation to this prohibition may be processed in accordance 
with 801.403 in order to allow the contracting officer to require 
contractor reporting or recordkeeping beyond that prescribed in the FAR 
and VAAR. The request for deviation will clearly specify what 
information or recordkeeping will be required and why it is required. 
The request will be signed by the head of the contracting activity.
* * * * *
    (c) * * *

------------------------------------------------------------------------
                                                            Current OMB
  48 CFR part or section where identified and described     control No.
------------------------------------------------------------------------
 
              *        *        *        *        *
852.236-80 (Alt. I).....................................       2900-0422
 
              *        *        *        *        *
852.236-89..............................................       2900-0622
852.236-91..............................................       2900-0623
 
              *        *        *        *        *
------------------------------------------------------------------------

PART 825--FOREIGN ACQUISITION

    4. The authority citation for part 825 continues to read as 
follows:

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    5. Subpart 825.9 is amended by:
    A. Redesignating subpart 825.9 as 825.10 and revising the subpart 
heading.
    B. Redesignating section 825.901 as 825.1001 and revising the 
section heading.

    The redesignations and revisions read as follows:

Subpart 825.10--Additional Foreign Acquisition Regulations


825.1001  Waiver of right to examination of records.

    6. Subpart 825.11 and section 825.1102 are added to read as 
follows:

Subpart 825.11--Solicitation Provisions and Contract Clauses


825.1102  Solicitation provisions and contract clauses.

    (a) The Buy American Act (41 U.S.C. 10a-d), except as modified by 
the Trade Agreements Act (TAA) and the North American Free Trade 
Agreement (NAFTA)), requires that only domestic construction material 
shall be used in the performance of contracts for construction. To 
clarify VA's position on foreign material, the contracting officer 
shall insert the clause at 852.236-89, Buy American Act, in 
solicitations and contracts for construction that contain the FAR 
clause at 52.225-9, Buy American Act'Balance of Payments 
Program'Construction Materials.
    (b) For solicitations and contracts for construction that include 
the FAR clause at 52.225-11, Buy American Act'Balance of Payment 
Program'Construction Materials Under Trade Agreements, with its 
Alternate I (i.e., subject only to the TAA), insert the clause at 
852.236-89, Buy American Act, with its Alternate I.
    (c) For solicitations and contracts that include the FAR clause at 
52.225-11 without its Alternate I (i.e., subject to both the TAA and 
NAFTA), insert the clause at 852.236-89, Buy American Act, with its 
Alternate II.

PART 832--CONTRACT FINANCING

    7. The authority citation for part 832 continues to read as 
follows:

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).

    8. Subpart 832.1, consisting of section 832.111, is added to read 
as follows:

Subpart 832.1--Non-Commercial Item Purchase Financing


832.111  Contract clauses for non-commercial purchases.

    (a) In solicitations and contracts for construction that include 
the FAR clause at 52.232-5, Payments Under Fixed-Price Construction 
Contracts, but that do not contain a section entitled ``Network 
Analysis System (NAS),'' the contracting officer shall insert the 
clause at 852.236-82, Payments under fixed-price construction contracts 
(without NAS). When the solicitations or contracts include guarantee 
period services, the contracting officer shall use the clause with its 
Alternate I.
    (b) In solicitations and contracts for construction that include 
the FAR clause at 52.232-5, Payments Under Fixed-Price Construction 
Contracts, and that also contain a section entitled ``Network Analysis 
System (NAS),'' the contracting officer shall insert the clause at 
852.236-83, Payments under fixed-price construction contracts 
(including NAS). When the solicitations or contracts include guarantee 
period services, the contracting officer shall use the clause with its 
Alternate I.

PART 836--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

    9. The authority citation for part 836 continues to read as 
follows:

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).


836.202  [Amended]

    10. Section 836.202 is amended by:
    A. In paragraph (b), removing ``of contract'' and adding, in its 
place, ``of a contract''.
    B. In paragraph (c), adding a comma immediately after ``FAR 52.236-
5''; removing ``the clause'' and adding, in its place, ``the 
contracting officer shall include the clause'; and removing ``shall be 
included''.

    11. Section 836.203 is added to read as follows:


836.203  Government estimate of construction costs.

    The overall amount of the Government estimate shall not be 
disclosed until after award of the contract. After award, the overall 
amount may then be disclosed upon request.


836.208  [Removed]

    12. Section 836.208 is removed.

    13. Section 836.209 is revised to read as follows:


836.209  Construction contracts with architect-engineer firms.

    When it is considered necessary or advantageous to award a contract 
for construction of a design-bid-build project, as defined at FAR 
36.102, to the firm or person that designed the project, prior approval 
will be requested from the facility director or manager or, for 
National Cemetery Administration contracts, the Director, Office of 
Construction Management, for contracts involving nonrecurring 
maintenance (NRM) funds or from the Chief Facilities Management 
Officer, Office of Facilities Management, for contracts involving 
construction funds. Complete justification will be furnished in the 
request. This section does not apply to design-build contracts, as 
defined at FAR 36.102.


836.211  [Removed]

    14. Section 836.211 is removed.

[[Page 49259]]


    15. Section 836.213-4 is added to read as follows:


836.213-4  Notice of award.

    The contracting officer shall provide the contractor a notice of 
award (letter of acceptance) for any contract award in excess of 
$25,000.


836.371  [Redesignated as 836.213-70]

    16. Section 836.371 is amended by:
    A. Redesignating section 836.371 as 836.213-70.
    B. In paragraph (b), removing ``requested. It will'' and adding, in 
its place, ``requested, or any other method that provides signed 
evidence of receipt. The notice to proceed will''; and removing ``post 
office.'' and adding, in its place, ``post office or on the proof of 
delivery provided by the delivery service.''
    C. In paragraph (d), removing ``mail is used, the certified mail 
receipt card returned by the post office will'' and adding, in its 
place, ``mail or other method of delivery is used, the certified mail 
receipt card returned by the post office or the proof of delivery 
provided by the delivery service will''.


836.3  [Removed]

    17. Subpart 836.3 is removed.

    18. Section 836.501 is added to read as follows:


836.501  Performance of work by the contractor.

    The contracting officer shall insert the clause at 852.236-72, 
Performance of work by the contractor, in solicitations and contracts 
for construction that contain the FAR clause at 52.236-1, Performance 
of Work by the Contractor. When the solicitations and contracts include 
a section entitled ``Network Analysis System (NAS),'' the contracting 
officer shall use the clause with its Alternate I.

    19. Section 836.521 is added to read as follows:


836.521  Specifications and drawings for construction.

    The contracting officer shall insert the clause at 852.236-71, 
Specifications and drawings for construction, in solicitations and 
contracts for construction that contain the FAR clause at 52.236-21, 
Specifications and Drawings for Construction.

    20. Sections 836.570 through 836.579 are added to read as follows:


836.570  Correspondence.

    The contracting officer shall insert the clause at 852.236-76, 
Correspondence, in solicitations and contracts for construction 
expected to exceed the micro-purchase threshold.


836.571  Reference to ``standards.''

    The contracting officer shall insert the clause at 852.236-77, 
Reference to ``standards,'' in solicitations and contracts for 
construction expected to exceed the micro-purchase threshold.


836.572  Government supervision.

    The contracting officer shall insert the clause at 852.236-78, 
Government supervision, in solicitations and contracts for construction 
expected to exceed the micro-purchase threshold.


836.573  Daily report of workers and materials.

    The contracting officer shall insert the clause at 852.236-79, 
Daily report of workers and materials, in solicitations and contracts 
for construction expected to exceed the simplified acquisition 
threshold. The contracting officer may, when in the best interest of 
the Government, insert the clause in solicitations and contracts for 
construction when the contract amount is expected to be at or below the 
simplified acquisition threshold.


836.574  Subcontractors and work coordination.

    The contracting officer shall insert the clause at 852.236-80, 
Subcontracts and work coordination, in solicitations and contracts for 
construction expected to exceed the micro-purchase threshold. When the 
solicitations or contracts are for new construction work with complex 
mechanical-electrical work, the contracting officer may use the clause 
with its Alternate I.


836.575  Schedule of work progress.

    The contracting officer shall insert the clause at 852.236-84, 
Schedule of work progress, in solicitations and contracts for 
construction that are expected to exceed the micro-purchase threshold 
and that do not contain a section entitled ``Network Analysis System 
(NAS).''


836.576  Supplementary labor standards provisions.

    The contracting officer shall insert the clause at 852.236-85, 
Supplementary labor standards provisions, in solicitations and 
contracts for construction that are expected to exceed the micro-
purchase threshold.


836.577  Worker's compensation.

    The contracting officer shall insert the clause at 852.236-86, 
Worker's compensation, in solicitations and contracts for construction 
that are expected to exceed the micro-purchase threshold.


836.578  Contract changes--supplement.

    (a) The contracting officer shall insert the clause at 852.236-88, 
Contract changes--supplement, in solicitations and contracts for 
construction that are expected to exceed the micro-purchase threshold.
    (b) When negotiated changes exceed $500,000, paragraph (a) of the 
clause at 852.236-88 will apply. Because paragraph (a) does not provide 
ceiling rates for indirect expenses, the contractor must supply cost 
breakdowns and other supporting data on its rates for indirect expenses 
as part of its price proposal. The contracting officer must negotiate 
the rates for indirect expenses with the contractor and may request an 
audit in accordance with FAR 15.404-2. When the negotiated change will 
be $500,000 or less, paragraph (b) of the clause at 852.236-88 will 
apply.
    (c) As provided in FAR 15.403-4, proposals exceeding the cost or 
pricing data threshold shall be accompanied by certificates of current 
cost or pricing data. The contracting officer, if authorized by the 
head of the contracting activity, may require the submission of cost or 
pricing data for proposals valued at less than the cost or pricing data 
threshold specified in FAR 15.403-4(a)(1) and may require that the data 
be certified in accordance with FAR 15.403-4(a)(2).
    (d) It is emphasized that the indirect cost rates in paragraph (b) 
of the clause at 852.236-88, for changes costing $500,000 or less, are 
ceiling rates only and the contracting officer must negotiate the 
indirect expense rates within the ceiling limitations. The clause is a 
result of an approved FAR deviation pursuant to subpart 801.4.


836.579  Special notes.

    The contracting officer shall insert the clause at 852.236-91, 
Special notes, in solicitations and contracts for construction that are 
expected to exceed the micro-purchase threshold.


836.602-1  [Amended]

    21. Section 836.602-1, paragraph (c) is amended by removing 
``project, and'' and adding, in its place, ``project and their''.

    22. Section 836.602-2 is amended by:
    A. In paragraph (a), removing ``board will be chaired by the 
Director of the Architect-Engineer Evaluation Staff, or the Area 
Project Manager (or Deputy Area Project Manager) will be designated to 
act when'' and adding, in its place, ``board for the Office of 
Facilities Management will be chaired by the Director, A/E Evaluation 
and Program Support Service. The Project Director or Project Manager 
will be

[[Page 49260]]

designated to act as Chair when'' removing ``appropriate Area'' and 
adding, in its place, ``appropriate'' and by adding a comma immediately 
after ``board's members.''
    B. In paragraph (b), removing ``activity and'' and adding, in its 
place, ``activity (HCA) (or the senior contracting officer at the 
facility if there is no HCA on site) and''.
    C. Paragraph (c) is added.
    The addition reads as follows:


836.602-2  Evaluation boards.

* * * * *
    (c) The evaluation board for National Cemetery Administration (NCA) 
contracts will be appointed by the Director, Office of Construction 
Management, and will consist of no less than three members, one of whom 
will serve as the board's Chair, and one of whom will be an NCA senior 
level contracting officer.


836.602-4  [Amended]

    23. Section 836.602-4 is amended by removing ``Central Office 
contracts) and'' and adding, in its place, ``Central Office contracts), 
the Director, Office of Construction Management (for National Cemetery 
Administration contracts), and''.

    24. Section 836.602-5 is revised to read as follows:


836.602-5  Short selection process for contracts not to exceed the 
simplified acquisition threshold.

    Either of the procedures provided in FAR 36.602-5 may be used to 
select firms for architect-engineer contracts not expected to exceed 
the simplified acquisition threshold.

    25. Section 836.603 is added to read as follows:


836.603  Collecting data on and appraising firms' qualifications.

    The Chief Facilities Management Officer, Office of Facilities 
Management, for Central Office; the Director, Office of Construction 
Management, for National Cemetery Administration acquisitions; and the 
Chief, Engineering Service, for field facilities, are responsible for 
collecting Standard Forms 254 and 255 and for maintaining a data file 
on architect-engineer qualifications.

    26. Section 836.606 heading is added immediately preceding 836.606-
70, to read as follows:


836.606  Negotiations.


836.606-73  [Amended]

    27. Section 836.606-73, paragraph (a)(3)(iii) is amended by adding 
a ``comma'' immediately after ``samples''.

PART 846--QUALITY ASSURANCE

    28. The authority citation for part 846 continues to read as 
follows:

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).


846.302-70  [Amended]

    29. Section 846.302-70 is amended by removing ``852.210-72(a)'' and 
adding, in its place, ``852.211-72(a)'', and by removing ``852.210-
72(b)'' and adding, in its place, ``852.211-72(b)''.

    30. Section 846.312 is added to read as follows:


846.312  Construction contacts.

    The contracting officer shall insert the clause at 852.236-74, 
Inspection of construction, in solicitations and contracts for 
construction that contain the FAR clause at 52.246-12, Inspection of 
Construction.

    31. Subpart 846.7, consisting of sections 846.710, 846.710-70, and 
846.710-71, is added to read as follows:

Subpart 846.7--Warranties

Sec.
846.710  Construction contracts.
846.710-70   Special warranties.
846.710-71   Warranty for construction--guarantee period services.

Subpart 846.7--Warranties


846.710  Construction contracts.

    Contracting officers shall insert the FAR clause at 52.246-21, 
Warranty of Construction, in solicitations and contracts for 
construction that are expected to exceed the micro-purchase threshold.


846.710-70  Special warranties.

    The contracting officer shall insert the clause at 852.246-1, 
Special warranties, in solicitations and contracts for construction 
that include the FAR clause at 52.246-21, Warranty for Construction.


846.710-71  Warranty for construction--guarantee period services.

    The contracting office shall insert the clause at 852.246-2, 
Warranty for construction'guarantee period services, in solicitations 
and contracts for construction that include the FAR clause at 52.246-
21, Warranty for Construction, and also include guarantee period 
services.

PART 852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    32. The authority citation for part 852 continues to read as 
follows:

    Authority: 38 U.S.C. 501 and 40 U.S.C. 486(c).


852.236-70  [Redesignated as 836.500]

    33. Section 852.236-70 is amended by:
    A. Redesignating section 852.236-70 as section 836.500 and 
transferring newly designated section 836.500 to subpart 836.5.
    B. In paragraph (a) of new section 836.500, removing ``section'' 
and adding, in its place, ``subpart''.
    C. Revising the new section heading.
    The revision reads as follows:


836.500  Scope of subpart.

    34. Section 852.236-71 is amended by:
    A. Revising the section introductory text.
    B. Revising the date in the undesignated center heading clause.
    C. In paragraph (d) of the clause, removing the comma immediately 
after ``work''.
    D. Adding introductory text to the clause.
    The revisions and addition read as follows:


852.236-71  Specifications and drawings for construction.

    As prescribed in 836.521, insert the following clause:

SPECIFICATIONS AND DRAWINGS FOR CONSTRUCTION (JUL 2002)

    The clause entitled ``Specifications and Drawings for 
Construction'' in FAR 52.236-21 is supplemented as follows:

* * * * *

    35. Section 852.236-72 is amended by:
    A. Revising the section introductory text.
    B. Revising the date in the undesignated center heading clause.
    C. Adding introductory text to the clause.
    D. Revising paragraphs (b) and (d).
    E. Revising the introductory Alternate I paragraph and paragraph 
(c) of Alternate I.
    The revisions and addition read as follows:


852.236-72  Performance of work by the contractor.

    As prescribed in 836.501, insert the following clause:

PERFORMANCE OF WORK BY THE CONTRACTOR (JUL 2002)

    The clause entitled ``Performance of Work by the Contractor'' in 
FAR 52.236-1 is supplemented as follows:
* * * * *
    (b) The contractor shall submit, simultaneously with the 
schedule of costs

[[Page 49261]]

required by the Payments Under Fixed-Price Construction Contracts 
clause of the contract, a statement designating the branch or 
branches of contract work to be performed with his/her forces. The 
approved schedule of costs will be used in determining the value of 
a branch or branches, or portions thereof, of the work for the 
purpose of this article.
* * * * *
    (d) In the event the contractor fails or refuses to meet the 
requirement of the FAR clause at 52.236-1, it is expressly agreed 
that the contract price will be reduced by 15 percent of the value 
of that portion of the percentage requirement that is accomplished 
by others. For the purpose of this clause, it is agreed that 15 
percent is an acceptable estimate of the contractor's overhead and 
profit, or mark-up, on that portion of the work which the contractor 
fails or refuses to perform, with his/her own forces, in accordance 
with the FAR clause at 52.236-1.
* * * * *

(End of clause)

Alternate I (Jul 2002)

    For requirements which include Network Analysis System (NAS), 
substitute the following paragraphs (b) and (c) for paragraphs (b) 
and (c) of the basic clause:
* * * * *
    (c) If, during progress of work hereunder, the contractor 
requests a change in activities of work to be performed by the 
contractor's forces and the contracting officer determines it to be 
in the best interest of the Government, the contracting officer may, 
at his or her discretion, authorize a change in such activities of 
said work.


    36. Section 852.236-74 is amended by:
    A. Revising the section introductory text.
    B. Revising the date in the undesignated center heading clause.
    C. Adding introductory text to the clause.
    The revisions and addition read as follows:


852.236-74  Inspection of construction.

    As prescribed in 846.312, insert the following clause:

INSPECTION OF CONSTRUCTION (JUL 2002)

    The clause entitled ``Inspection of Construction'' in FAR 
52.246-12 is supplemented as follows:
* * * * *


852.236-75  (Redesignated as 852.246-2)

    37. Section 852.236-75 is redesignated as 852.246-2, and is revised 
to read as follows:


852.246-2  Warranty for construction--guarantee period services.

    As prescribed in 846.710-71, insert the following clause:

WARRANTY FOR CONSTRUCTION--GUARANTEE PERIOD SERVICES (JUL 2002)

    The clause entitled ``Warranty of Construction'' in FAR 52.246-
21 is supplemented as follows:
    Should the contractor fail to prosecute the work or fail to 
proceed promptly to provide guarantee period services after 
notification by the contracting officer, the Government may, subject 
to the default clause contained at FAR Section 52.249-10, Default 
(Fixed-Price Construction), and after allowing the contractor 10 
days to correct and comply with the contract, terminate the right to 
proceed with the work (or the separable part of the work) that has 
been delayed or unsatisfactorily performed. In this event, the 
Government may take over the work and complete it by contract or 
otherwise, and may take possession of and use any materials, 
appliance, and plant on the work site necessary for completing the 
work. The contractor and its sureties shall be liable for any 
damages to the Government resulting from the contractor's refusal or 
failure to complete the work within this specified time, whether or 
not the contractor's right to proceed with the work is terminated. 
This liability includes any increased costs incurred by the 
Government in completing the work.

(End of clause)


    38. In section 852.236-76, introductory text is added to read as 
follows:


852.236-76  Correspondence.

    As prescribed in 836.570, insert the following clause:
* * * * *

    39. Section 852.236-77 is amended by:
    A. Adding introductory text.
    B. Revising the undesignated center heading clause and its date.
    The addition and revision read as follows:


852.236-77  Reference to ``standards.''

    As prescribed in 836.571, insert the following clause:

REFERENCE TO ``STANDARDS'' (JUL 2002)

    40. In section 852.236-78, paragraph (c) is amended by removing 
``may by written direction make'' and adding, in its place ``may, by 
written direction, make''; and a section introductory text is added to 
read as follows:


852.236-78  Government supervision.

    As prescribed in 836.572, insert the following clause:
* * * * *

    41. In section 852.236-79, section introductory text is added to 
read as follows:


852.236-79  Daily report of workers and materials.

    As prescribed in 836.573, insert the following clause:
* * * * *

    42. Section 852.236-80 is amended by:
    A. Revising the introductory text.
    B. Adding a new paragraph immediately following the phrase ``(End 
of clause)''.
    The revision and addition read as follows:


852.236-80  Subcontracts and work coordination.

    As prescribed in 836.574, insert the following clause:
* * * * *

(End of clause)

Alternate I (Jul 2002)

    For new construction work with complex mechanical-electrical 
work, the following paragraph relating to work coordination may be 
substituted for paragraph (b) of the basic clause:
* * * * *

    43. Section 852.236-81 is amended by:
    A. Removing the section introductory text.
    B. Removing the undesignated center clause heading.
    C. Adding a paragraph ``(b)'' designation to the undesignated 
clause paragraph.
    D. Removing the phrase ``(End of clause)'' at the end of the newly 
designated paragraph (b).
    E. Transferring the newly designated paragraph (b) to section 
852.236.80 immediately following the ``Alternate I'' paragraph.
    F. Removing section 852.236-81 section heading.

    44. In section 852.236-82, the introductory text and paragraphs 
(b)(2) and (b)(3) are revised; the ``Supplement I (JAN 1988)'' clause 
is removed and an Alternate I clause is inserted in its place to read 
as follows:


852.236.82  Payments under fixed-price construction contracts (without 
NAS).

    As prescribed in 832.111, insert the following clause in contracts 
that do not contain a section entitled ``Network Analysis System 
(NAS)'':
* * * * *
    (b) * * *
    (2) Costs as shown on this schedule must be true costs and, 
should the resident engineer so desire, he/she may require the 
contractor to submit the original estimate sheets or other 
information to substantiate the detailed makeup of the schedule.
    (3) The sum of the subbranches, as applied to each branch, shall 
equal the total cost of

[[Page 49262]]

such branch. The total cost of all branches shall equal the contract 
price.
* * * * *

Alternate I (Jul 2002)

    If the specifications include guarantee period services, the 
contracting officer shall include the following paragraphs as 
additions to paragraph (b) of the basic clause:
    (6)(i) The contractor shall at the time of contract award 
furnish the total cost of the guarantee period services in 
accordance with specification section(s) covering guarantee period 
services. The contractor shall submit, within 15 calendar days of 
receipt of the notice to proceed, a guarantee period performance 
program which shall include an itemized accounting of the number of 
work-hours required to perform the guarantee period service on each 
piece of equipment. The contractor shall also submit the established 
salary costs, including employee fringe benefits, and what the 
contractor reasonably expects to pay over the guarantee period, all 
of which will be subject to the contracting officer's approval.
    (ii) The cost of the guarantee period service shall be prorated 
on an annual basis and paid in equal monthly payments by VA during 
the period of guarantee. In the event the installer does not perform 
satisfactorily during this period, all payments may be withheld, and 
the contracting officer shall inform the contractor of the 
unsatisfactory performance, allowing the contractor 10 days to 
correct deficiencies and comply with the contract. The guarantee 
period service is subject to those provisions as set forth in the 
Payments and Default clauses.


    45. Section 852.236-83 is amended by:
    A. Revising the section introductory text.
    B. Revising the date in the undesignated center heading clause.
    C. Revising the clause introductory text.
    D. Removing the ``Supplement I (JAN 1988)'' introductory text and 
inserting in its place an Alternate I paragraph, and revising 
paragraphs (6)(ii) and (iii).
    The revisions read as follows:


852.236.83  Payments under fixed-price construction contracts 
(including NAS).

    As prescribed in 832.111, insert the following clause in contracts 
that contain a section entitled ``Network Analysis System (NAS)'':
* * * * *

PAYMENTS UNDER FIXED-PRICE CONSTRUCTION CONTRACTS (JUL 2002)

    The clause entitled ``Payments Under Fixed-Price Construction 
Contracts'' in FAR 52.232-5 is implemented as follows:
* * * * *

(End of clause)

Alternate I (Jul 2002)

    If the specifications include guarantee period services, the 
contracting officer shall include the following paragraphs as 
additions to paragraph (b) of the basic clause:
    (6)(i) * * *
    (ii) The contractor shall submit with the CPM a guarantee period 
performance program which shall include an itemized accounting of 
the number of work-hours required to perform the guarantee period 
service on each piece of equipment. The contractor shall also submit 
the established salary costs, including employee fringe benefits, 
and what the contractor reasonably expects to pay over the guarantee 
period, all of which will be subject to the contracting officer's 
approval.
    (iii) The cost of the guarantee period service shall be prorated 
on an annual basis and paid in equal monthly payments by VA during 
the period of guarantee. In the event the installer does not perform 
satisfactorily during this period, all payments may be withheld and 
the contracting officer shall inform the contractor of the 
unsatisfactory performance, allowing the contractor 10 days to 
correct and comply with the contract. The guarantee period service 
is subject to those provisions as set forth in the Payments and 
Default clauses.

852.236-84  [Amended]

    46. In section 852.236-84, the introductory text is revised to read 
as follows:


852.236-84  Schedule of work progress.

    As prescribed in 836.575, insert the following clause:
* * * * *

    47. In section 852.236-85, introductory text is added to read as 
follows:


852.236.85  Supplementary labor standards provisions.

    As prescribed in 836.576, insert the following clause:
* * * * *

    48. Section 852.236-86 is revised to read as follows:


852.236-86  Worker's compensation.

    As prescribed in 836.577, insert the following clause:

WORKER'S COMPENSATION (JUL 2002)

    The Act of June 25, 1936, 49 Stat. 1938 (40 U.S.C. 290) 
authorizes the constituted authority of States to apply their 
worker's compensation laws to all lands and premises owned or held 
by the United States.

(End of clause)

    49. Section 852.236-88 is amended by:
    A. Revising the section heading and introductory text.
    B. Removing paragraph (a) of the section.
    C. Revising the first clause undesignated center heading.
    D. Redesignating paragraphs (a) through (d) of the first clause as 
paragraphs (a)(1) through (a)(4), respectively.
    E. Adding a new paragraph (a) introductory text to the first 
clause.
    F. Removing from newly designated paragraph (a)(1) ``to be 
submitted'' and adding, in its place, ``to be submitted as 
expeditiously as possible but''.
    G. Removing from newly designated paragraph (a)(2) ``submit a 
proposal'' and adding, in its place, ``submit a proposal, which 
includes the information required by paragraph (a)(1),''.
    H. Removing from newly designated paragraph (a)(3) the comma 
immediately following the phrase ``the contract'', and the comma 
immediately following the phrase ``calendar days''.
    I. Removing at end of the first clause the parenthetical ``(End of 
clause)''.
    J. Removing paragraph (b) of the section.
    K. Removing the second clause introductory text immediately 
following the second undesignated center clause heading.
    L. Redesignating paragraphs (a) through (k) of the second clause as 
paragraphs (b)(1) through (b)(11), respectively.
    M. Adding a new clause paragraph (b) introductory text.
    N. Removing from newly designated paragraph (b)(1) ``to be 
submitted'' and adding, in its place, ``to be submitted as 
expeditiously as possible but''; and removing ``data are required under 
FAR 15.403 for proposals over $100,000, the cost of pricing'' and 
adding, in its place, ``data or information other than cost or pricing 
data are required under FAR 15.403, the''.
    O. Removing from newly designated paragraph (b)(2) ``submit a 
proposal for cost of changes in work within 30 calendar days.'' and 
adding, in its place, ``submit with 30 calendar days a proposal, which 
includes the information required by paragraph (b)(1), for the cost of 
the changes in work.''
    P. Removing from newly designated paragraph (b)(3) the comma 
immediately following the phrase ``the contract'', and the comma 
immediately following the phrase ``calendar days'.
    Q. Removing from newly designated paragraph (b)(9) ``Workmen's'' 
and adding, in its place, ``Worker's''.
    R. Removing the second clause undesignated center heading.
    The revisions and additions read as follows:


852.236-88  Contract changes--supplement.

    As prescribed in 836.578, insert the following clause:

[[Page 49263]]

CONTRACT CHANGES--SUPPLEMENT (JUL 2002)

* * * * *
    (a) Paragraphs (a)(1) through (a)(4) apply to proposed contract 
changes costing over $500,000:
* * * * *
    (b) Paragraphs (b)(1) through (b)(11) apply to proposed contract 
changes costing $500,000 or less:

* * * * *


852.236-89  [Amended]

    50. Section 852.236-89 is revised to read as follows:


852.236-89  Buy American Act.

    As prescribed in 825.1102, insert the following clause:

BUY AMERICAN ACT (JUL 2002)

    (a) Reference is made to the clause entitled ``Buy American 
Act--Balance of Payments Program--Construction Materials,'' FAR 
52.225-9.
    (b) Notwithstanding a bidder's right to offer identifiable 
foreign construction material in its bid pursuant to FAR 52.225-9, 
VA does not anticipate accepting an offer that includes foreign 
construction material.
    (c) If a bidder chooses to submit a bid that includes foreign 
construction material, that bidder must provide a listing of the 
specific foreign construction material he/she intends to use and a 
price for said material. Bidders must include bid prices for 
comparable domestic construction material. If VA determines not to 
accept foreign construction material and no comparable domestic 
construction material is provided, the entire bid will be rejected.
    (d) Any foreign construction material proposed after award will 
be rejected unless the bidder proves to VA's satisfaction: (1) It 
was impossible to request the exemption prior to award, and (2) said 
domestic construction material is no longer available, or (3) where 
the price has escalated so dramatically after the contract has been 
awarded that it would be unconscionable to require performance at 
that price. The determinations required by (1), (2), and (3) of this 
paragraph shall be made in accordance with subpart 825.2 and FAR 
25.2.
    (e) By signing this bid, the bidder declares that all articles, 
materials and supplies for use on the project shall be domestic 
unless specifically set forth on the Bid Form or addendum thereto.

(End of Cause)

Alternate I (JUL 2002)

    As prescribed in 825.1102(b), substitute the following 
paragraphs for paragraphs (a) and (b) of the basic clause:
    (a) Reference is made to the clause entitled ``Buy American 
Act--Balance of Payment Program--Construction Materials Under Trade 
Agreements,'' FAR 52.225-11.
    (b) The restrictions contained in this clause 852.236-89 are 
waived for Trade Agreements Act (TAA) designated country 
construction material, as defined in FAR 52.225-11. Notwithstanding 
a bidder's right to offer identifiable foreign construction material 
in its bid pursuant to FAR 52.225-11, VA does not anticipate 
accepting an offer that includes foreign construction material, 
other than TAA designated country construction material.

Alternate II (JUL 2002)

    As prescribed in 825.1102(c), substitute the following 
paragraphs for paragraphs (a) and (b) of the basic clause:
    (a) Reference is made to the clause entitled ``Buy American 
Act--Balance of Payment Program--Construction Materials Under Trade 
Agreements,'' FAR 52.225-11.
    (b) The restrictions contained in this clause 852.236-89 are 
waived for Trade Agreements Act (TAA) designated country 
construction material and North American Free Trade Agreement 
(NAFTA) country construction material, as defined in FAR 52.225-11. 
Notwithstanding a bidder's right to offer identifiable foreign 
construction material in its bid pursuant to FAR 52.225-11, VA does 
not anticipate accepting an offer that includes foreign construction 
material, other than TAA designated country construction material or 
NAFTA country construction material.


    51. Section 852.236-91 is amended by:
    A. Adding an introductory text to the section.
    B. Revising the undesignated center clause heading and its date.
    C. Revising paragraph (a) introductory text.
    D. In paragraph (b), adding a comma immediately following the 
phrase ``is permitted''.
    The additions and revisions read as follows:


852.236-91  Special notes.

    As prescribed in 836.579, insert the following clause:

SPECIAL NOTES (JUL 2002)

    (a) Signing of the bid shall be deemed to be a representation by 
the bidder that:
* * * * *


    52. Section 852.246-1 is added to read as follows:


852.246-1  Special warranties.

    As prescribed in 846.710-70, insert the following clause:

SPECIAL WARRANTIES (JUL 2002)

    The clause entitled ``Warranty of Construction'' in FAR 52.246-
21 is supplemented as follows:
    Any special warranties that may be required under the contract 
shall be subject to the elections set forth in the FAR clause at 
52.246-21, Warranty of Construction, unless otherwise provided for 
in such special warranties.


[FR Doc. 02-18966 Filed 7-29-02; 8:45 am]
BILLING CODE 8320-01-P