[Federal Register Volume 68, Number 99 (Thursday, May 22, 2003)]
[Rules and Regulations]
[Pages 28077-28079]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-12300]

[[Page 28077]]


Part III

Department of Defense

General Services Administration

National Aeronautics and Space Administration


48 CFR Chapter I, et al.

Federal Acquistion Circular 2001-14; Final Rules

Federal Register / Vol. 68, No. 99 / Thursday, May 22, 2003 / Rules 
and Regulations

[[Page 28078]]





48 CFR Chapter 1

Federal Acquisition Circular 2001-14; Introduction

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

ACTION: Summary presentation of final rules and technical amendments.


SUMMARY: This document summarizes the Federal Acquisition Regulation 
(FAR) rules agreed to by the Civilian Agency Acquisition Council and 
the Defense Acquisition Regulations Council in this Federal Acquisition 
Circular (FAC) 2001-14. 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 
which follow.

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 2001-14 and 
specific FAR case number(s). Interested parties may also visit our Web 
site at http://www.arnet.gov/far.

       Item                Subject            FAR case       Analyst
I................  Geographic Use of the       1999-400  Davis.
                    Term ``United States''.
II...............  Miscellaneous Cost          2001-029  Loeb.
III..............  Prompt Payment Under        2000-308  Loeb.
                    Contracts for Services.
IV...............  Electronic Signatures..     2000-304  Smith.
V................  Increased Federal           2003-001  Nelson.
                    Prison Industries,
                    Inc. Waiver Threshold
VI...............  Past Performance            2001-035  Smith.
                    Evaluation of Federal
                    Prison Industries
VII..............  Contract Terms and          2000-009  Moss.
                    Conditions Required to
                    Implement Statute or
                    Executive Orders--
                    Commercial Items.
VIII.............  Technical Amendments.

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.
    FAC 2001-14 amends the FAR as specified below:

Item I--Geographic Use of the Term ``United States'' (FAR Case 1999-

    This final rule amends the FAR to clarify the use of the term 
``United States,'' when used in a geographic sense. The term ``United 
States'' is defined in FAR 2.101 to include the 50 States and the 
District of Columbia. Where a wider area of applicability is intended, 
the term is redefined in the appropriate part or subpart of the FAR, or 
supplemented by listing the additional areas of applicability each time 
the term is used. This rule corrects and updates references to the 
United States throughout the FAR, including a new definition of 
``outlying areas'' of the United States, a term that encompasses the 
named outlying commonwealths, territories, and minor outlying islands.

Item II--Miscellaneous Cost Principles (FAR Case 2001-029)

    This final rule amends the FAR by deleting the cost principle at 
FAR 31.205-45, Transportation costs, and streamlining the cost 
principles at FAR 31.205-10, Cost of money; FAR 31.205-28, Other 
business expenses; and FAR 31.205-48, Deferred research and development 
costs. The rule will only affect contracting officers that are required 
by a contract clause to use cost principles for the determination, 
negotiation, or allowance of contract costs.

Item III--Prompt Payment Under Cost-Reimbursement Contracts for 
Services (FAR Case 2000-308)

    The interim rule published in the Federal Register at 66 FR 53485, 
October 22, 2001, is converted to a final rule, without change, to 
implement statutory and regulatory changes related to late payment of 
an interim payment under a cost-reimbursement contract for services. 
The rule is of special interest to contracting officers that award or 
administer these type of contracts.
    The Federal Register notice published in conjunction with the FAR 
interim rule stated that ``The policy and clause apply to all covered 
contracts awarded on or after December 15, 2000 * * * agencies may 
apply the FAR changes made by this rule to contracts awarded prior to 
December 15, 2000, at their discretion * * *.'' This was consistent 
with OMB regulations. Subsequently, as a result of enactment of the 
National Defense Authorization Act for Fiscal Year 2002 (Pub. L. 107-
107) on December 28, 2001, agencies no longer have this discretion. 
Section 1007 of Public Law 107-107 states that this policy applies to 
cost-reimbursement contracts for services awarded before, on, or after 
December 15, 2000. Section 1007 retains the prohibition against payment 
of late payment interest penalty for any period prior to December 15, 

Item IV--Electronic Signatures (FAR Case 2000-304)

    Recent laws eliminate legal barriers to using electronic technology 
in business transactions, such as the formation and signing of 
contracts. This final rule furthers Government participation in 
electronic commerce when conducting Government procurements by adding a 
statement at FAR Subpart 4.5, Electronic Commerce in Contracting, 
clarifying that agencies are permitted to accept electronic signatures 
and records in connection with Government contracts.

Item V--Increased Federal Prison Industries, Inc. Waiver Threshold (FAR 
Case 2003-001)

    This interim rule revises the Federal Acquisition Regulation to 
increase the Federal Prison Industries, Inc.'s (FPI) clearance 
exception threshold at 8.606(e) from $25 to $2,500 and eliminates the 
criterion that delivery is required within 10 days. Federal agencies 
will not be required to make purchases from FPI of products on FPI's 
Schedule that are at or below this threshold.

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Item VI--Past Performance Evaluation of Federal Prison Industries 
Contracts (FAR Case 2001-035)

    This final rule requires agencies to evaluate Federal Prison 
Industries (FPI) contract performance. This change will permit Federal 
customers to rate FPI performance, compare FPI to private sector 
providers, and give FPI important feedback on previously awarded 
contracts. It is expected that this change will give FPI the same 
opportunity that we give private sector providers, to improve their 
customer satisfaction, in general, and their performance on delivery, 
price, and quality, specifically.

Item VII--Contract Terms and Conditions Required to Implement Statute 
or Executive Orders--Commercial Items (FAR Case 2000-009)

    This final rule amends the clause at 52.212-5, Contract Terms and 
Conditions Required to Implement Statute or Executive Orders--
Commercial Items, to ensure that required statutes enacted subsequent 
to FASA that contain civil or criminal penalties or specifically cite 
their applicability to commercial items are included on the list, and 
to ensure that any post-FASA items that did not meet this criteria are 
deleted from the list. In addition, the pre-FASA clauses and alternates 
that were inadvertently left off the list are added. The date of each 
clause is added to the list to identify what revision of the listed 
clause applies when this clause is added to a contract.

Item VIII--Technical Amendments

    These amendments update references and make editorial changes at 
FAR 52.213-4(a)(2)(vi), 52.244-6 section and clause headings, and 

    Dated: May 13, 2003.
Laura G. Smith,
Director, Acquisition Policy Division.

Federal Acquisition Circular

    Federal Acquisition Circular (FAC) 2001-14 is issued under the 
authority of the Secretary of Defense, the Administrator of General 
Services, and the Administrator for the National Aeronautics and Space 
    Unless otherwise specified, all Federal Acquisition Regulation 
(FAR) and other directive material contained in FAC 2001-14 are 
effective June 23, 2003, except for Items III, V and VIII which are 
effective May 22, 2003.

Dated: May 9, 2003.

Deidre A. Lee,
Director, Defense Procurement and Acquisition Policy.

Dated: May 5, 2003.
David A. Drabkin,
Deputy of Acquisition Policy, General Services Administration.

Dated: May 5, 2003.

Tom Luedtke,
Assistant Administrator for Procurement, National Aeronautics and 
Space Administration.

[FR Doc. 03-12300 Filed 5-21-03; 8:45 am]