[Federal Register Volume 69, Number 10 (Thursday, January 15, 2004)]
[Proposed Rules]
[Pages 2448-2451]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-852]



[[Page 2447]]

-----------------------------------------------------------------------

Part III





Department of Defense





General Services Administration





National Aeronautics and Space Administration





-----------------------------------------------------------------------



48 CFR Parts 2, 3, 12, et al.



 Federal Acquisition Regulation; Commercially Available Off-the-Shelf 
(COTS) Items; Proposed Rule

  Federal Register / Vol. 69, No. 10 / Thursday, January 15, 2004 / 
Proposed Rules  

[[Page 2448]]


-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 3, 12, 22, 23, 25, 27, 44, 47, and 52

[FAR Case 2000-305]
RIN 9000-AJ55


Federal Acquisition Regulation; Commercially Available Off-the-
Shelf (COTS) Items

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

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) are soliciting comments 
regarding the implementation of section 4203 of the Clinger-Cohen Act 
of 1996, 41 U.S.C. 431 (the Act) with respect to Commercially Available 
Off-the-Shelf Item acquisitions. The Act requires the Federal 
Acquisition Regulation (FAR) list certain provisions of law that are 
inapplicable to contracts for acquisitions of commercially available 
off-the-shelf items. The Act excludes section 15 of the Small Business 
Act and bid protest procedures from the list. The list of inapplicable 
statutes cannot include a provision of law that provides for criminal 
or civil penalties.

DATES: Interested parties should submit comments in writing on or 
before March 15, 2004 to be considered in the formulation of a final 
rule.

ADDRESSES: Submit written comments to General Services Administration, 
FAR Secretariat (MVA), 1800 F Street, NW., Room 4035, ATTN: Laurie 
Duarte, Washington, DC 20405.
    Submit electronic comments via the Internet to- [email protected]

    Please submit comments only and cite FAR case 2000-305 in all 
correspondence related to this case.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat at (202) 501-4755 
for information pertaining to status or publication schedules. For 
clarification of content, contact Mr. Gerald Zaffos, Procurement 
Analyst, at (202) 208-6091. Please cite FAR case 2000-305.

SUPPLEMENTARY INFORMATION:

A. Background

    Certain laws have already been determined to be inapplicable to all 
commercial items as a result of the implementation of the Federal 
Acquisition Streamlining Act of 1994 (see FAR 12.503). On January 30, 
2003, the FAR Secretariat issued an Advanced Notice of Proposed 
Rulemaking in the Federal Register (68 FR 4874) that lists the 
additional provisions of law that could be determined inapplicable to 
commercially available off-the-shelf (COTS) items. Seven public 
comments were received. The Commercial Products and Practices Committee 
reviewed the public comments; identified potential changes to the FAR; 
and submitted a report, including a draft proposed rule for 
consideration by the Councils.
    The Councils recognize the concerns raised by the U.S. Trade 
Representative, the Department of Labor, and other agencies regarding 
the listing of certain laws. The proposed rule does not represent a 
final decision on any of those laws. Rather, the proposed rule lists 
the universe of laws that could be determined inapplicable to COTS. The 
Council is seeking public comments that the Administrator for Federal 
Procurement Policy will use in making the statutory determination that 
it would be in the best interest of the Government to maintain certain 
of those proposed laws.
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule is 
not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    The changes may have a significant, but beneficial, 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 rule 
exempts the application of a number of laws to businesses, large and 
small, offering commercially available off-the-shelf items to the 
Federal Government. An Initial Regulatory Flexibility Act Analysis 
(IRFA) has been prepared and is summarized as follows:

    The objective and legal basis of this rule is to implement the 
requirements of section 4203 of the Clinger-Cohen Act (Public Law 
104-106). Available data indicates that many commercial sales to the 
Government will come from small businesses. The rule does not impose 
new reporting or record keeping requirements and does not duplicate, 
overlap, or conflict with any other Federal rules. The rule is 
expected to have a beneficial impact on industry because it proposes 
to exempt purchases of commercially available off-the-shelf items 
from many Government-unique requirements. Although the rule does not 
specifically propose different procedures for small versus large 
entities, existing preferences for small businesses, contained in 
FAR Part 19, remain unchanged. We believe that the relief from 
administrative burdens proposed by this rule may serve to motivate 
more small entities to do business with the Government.

    The FAR Secretariat has submitted a copy of the IRFA to the Chief 
Counsel for Advocacy of the Small Business Administration. A copy of 
the IRFA may be obtained from the FAR Secretariat. Comments are 
invited. The Councils will consider comments from small entities 
concerning the affected FAR parts 2, 3, 12, 22, 23, 25, 27, 44, 47, and 
52 in accordance with 5 U.S.C. 610. Comments must be submitted 
separately and should cite 5 U.S.C. 601, et seq. (FAR case 2000-305), 
in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act applies. It is anticipated that the 
rule will reduce annual information collection burdens. An estimate of 
the burden reduction is undetermined at this time. The reduction will 
be dependant on the estimated burden reductions taken for each 
provision of law that will be excluded from the final rule. 
Accordingly, a Paperwork Reduction Act Change to pertinent existing 
burdens will be submitted to the Office of Management and Budget under 
44 U.S.C. 2502, et seq.

List of Subjects in 48 CFR Parts 2, 3, 12, 22, 23, 25, 27, 44, 47, 
and 52

    Government procurement.

    Dated: January 9, 2004.
Ralph De Stefano,
Deputy Director, Acquisition Policy Division.
    Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 2, 3, 
12, 22, 23, 25, 27, 44, 47, and 52 as set forth below:
    1. The authority citation for 48 CFR parts 2, 3, 12, 22, 23, 25, 
27, 44, 47, and 52 is revised to read as follows:

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 2--DEFINITIONS OF WORDS AND TERMS

    2. Amend section 2.101 in paragraph (b) by adding, in alphabetical 
order, the definition ``Commercially available off-the-shelf item 
(COTS)'' to read as follows:


2.101  Definitions.

* * * * *
    (b) * * *
    Commercially available off-the-shelf item (COTS)--(1) Is a subset 
of a

[[Page 2449]]

commercial item and means any item of supply that is--
    (i) A commercial item (as defined in this section);
    (ii) Sold in substantial quantities in the commercial marketplace; 
and
    (iii) Offered to the Government, without modification, in the same 
form in which it is sold in the commercial marketplace.
    (2) Does not include bulk cargo, as defined in section 3 of the 
Shipping Act of 1984 (46 U.S.C. App. 1702), such as agricultural 
products and petroleum products.
* * * * *

PART 3--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF 
INTEREST

    3. Revise section 3.503-2 to read as follows:


3.503-2  Contract clause.

    The contracting officer shall insert the clause at 52.203-6, 
Restrictions on Subcontractor Sales to the Government, in solicitations 
and contracts exceeding the simplified acquisition threshold, except 
when contracts are for the acquisition of commercially available off-
the-shelf items. For the acquisition of commercial items, other than 
COTS, the contracting officer shall use the clause with its Alternate 
I.

PART 12--ACQUISITION OF COMMERCIAL ITEMS

    4. Amend section 12.102 by adding a sentence to the end of 
paragraph (a) to read as follows:


12.102  Applicability.

    (a) * * * Unless indicated otherwise, all of the policies that 
apply to commercial items also apply to COTS items defined in 2.101.
* * * * *
    5. Amend section 12.301 by--
    a. Revising the section heading;
    b. Adding a sentence to the end of paragraph (b)(3);
    c. Revising the paragraph heading and the first sentence of 
paragraph (b)(4); and
    d. Adding paragraph (b)(5) to read as follows:


12.301  Solicitation provisions and contract clauses.

* * * * *
    (b) * * *
    (3) * * * When acquiring a COTS item, contracting officers may 
include Alternate I of the clause when it is in the best interests of 
the Government.
    (4) The clause at 52.212-5, Contract Terms and Conditions Required 
to Implement Statutes or Executive Orders--Commercial Items (Other than 
COTS). This clause incorporates by reference only those clauses 
required to implement provisions of law or executive orders applicable 
to the acquisition of commercial items, other than COTS items. * * *
    (5) The clause at 52.212-XX, Contract Terms and Conditions Required 
to Implement Statutes or Executive Orders--Commercially Available Off-
the-Shelf (COTS) Items. This clause incorporates by reference only 
those clauses required to implement provisions of law or Executive 
orders applicable to the acquisition of COTS items. The contracting 
officer shall attach this clause to the solicitation and contract and, 
using the appropriate clause prescriptions, indicate which, if any, of 
the additional clauses cited in 52.212-XX (b) or (c) are applicable to 
the specific acquisition. This clause may not be tailored.
* * * * *

Subpart 12.5--Applicability of Certain Laws to the Acquisition of 
Commercial Items and Commercially Available Off-the-Shelf Items

    6. Revise the heading of Subpart 12.5 to read as set forth above.
    7. Revise section 12.500 to read as follows:


12.500  Scope of subpart.

    (a) As required by sections 34 and 35 of the Office of Federal 
Procurement Policy Act (41 U.S.C. 401, et seq.), this subpart lists 
provisions of law that are not applicable to--
    (1) Contracts for commercial items;
    (2) Subcontracts, at any tier, for the acquisition of commercial 
items; and
    (3) Contracts and subcontracts, at any tier, for the acquisition of 
COTS items.
    (b) This subpart also lists provisions of law that have been 
amended to eliminate or modify their applicability to either contracts 
or subcontracts for the acquisition of commercial items.
    8. Amend section 12.502 by adding paragraph (c) to read as follows:


12.502  Procedures.

* * * * *
    (c) The FAR prescription for the provision or clause for each of 
the laws listed in 12.505 has been revised in the appropriate part to 
reflect its proper application to prime contracts for the acquisition 
of COTS items. For subcontracts for the acquisition of COTS items or 
COTS components, the clauses at 52.212-XX, Contract Terms and 
Conditions Required to Implement Statutes or Executive Orders--
Commercially Available Off-the-Shelf (COTS) Items, and 52.244-6, 
Subcontracts for Commercial Items and Commercial Components, reflect 
the applicability of the laws listed in 12.505 by identifying the only 
provisions and clauses that are required to be included in a 
subcontract at any tier for the acquisition of COTS items or COTS 
components.


12.504  [Amended]

    9. Amend section 12.504 in paragraph (a) by removing paragraph 
(a)(2) and redesignating paragraphs (a)(3) through (a)(12) as (a)(2) 
through (a)(11), respectively.
    10. Add section 12.505 to read as follows:


12.505  Applicability of certain laws to contracts and subcontracts for 
the acquisition of COTS items.

    (a) The following laws are not applicable to contracts or 
subcontracts, at any tier, for the acquisition of COTS items:
    (1) 10 U.S.C. 2631, Transportation of Supplies by Sea (see 52.247-
64).
    (2) 19 U.S.C. 2501, et seq., Trade Agreements Act (see 52.225-5).
    (3) 19 U.S.C. 2512, et seq., Trade Agreements Act (see 52.225-5).
    (4) 29 U.S.C. 793, Affirmative Action for Handicapped Workers (see 
52.222-36).
    (5) 31 U.S.C. 3324, Restrictions on Advance Payments (see Alternate 
I to 52.212-4 which permits payment upon notice of shipping).
    (6) 31 U.S.C. 1352, Limitation on Payments to Influence Certain 
Federal Transactions (see Subpart 3.8).
    (7) 31 U.S.C. 1354(a), Limitation on use of appropriated funds for 
contracts with entities not meeting veteran's employment reporting 
requirements (see 22.1302).
    (8) 38 U.S.C. 4212, Equal Opportunity for Special Disabled 
Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (see 
52.222-35).
    (9) 38 U.S.C. 4212(d)(1), Employment Reports on Special Disabled 
Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (see 
52.222-37).
    (10) 41 U.S.C. 10a, et seq., Buy American Act--Supplies (see 
52.225-1 and 52.225-3).
    (11) 41 U.S.C. 43, Walsh-Healey Act (see Subpart 22.6).
    (12) 41 U.S.C. 416(a)(6), Minimum Response Time for Offers under 
Office of Federal Procurement Policy Act (see Subpart 5.2).
    (13) 41 U.S.C. 418a, Rights in Technical Data (see sections 12.211 
and 27.409).

[[Page 2450]]

    (14) 41 U.S.C. 253d, Validation of Proprietary Data Restrictions 
(see sections 12.211 and 27.409).
    (15) 41 U.S.C. 253g and 10 U.S.C. 2402, Prohibition of Limiting 
Subcontractor Direct Sales to the United States (see 52.203-6).
    (16) 41 U.S.C. 254(a) and 10 U.S.C. 2306(b), Contingent Fees (see 
Subpart 3.4).
    (17) 41 U.S.C. 254d(c) and 10 U.S.C. 2513(c), Examination of 
Records of Contractor (see 52.215-2).
    (18) 41 U.S.C. 701, et seq., Drug-Free Workplace Act of 1988 (see 
Subpart 23.5).
    (19) 46 U.S.C. Appx 1241(b), Transportation in American Vessels of 
Government Personnel and Certain Cargo (see 52.247-64).
    (20) 49 U.S.C. 40118, Fly American provisions (see Subpart 47.4).
    (b) The requirement for a clause and certain other requirements 
related to 40 U.S.C. 327, et seq., Requirements for a Certificate and 
Clause under the Contract Work Hours and Safety Standards Act (see 
Subpart 22.3), 41 U.S.C. 57(a) and (b), and 41 U.S.C. 58, the Anti-
Kickback Act of 1986, and 42 U.S.C. 6962(c)(3)(A), Estimate of 
Percentage of Recovered Material EPA-Designated Product (limited to the 
certification and estimate requirements) (see 52.223-9) have been 
eliminated for contracts and subcontracts at any tier for the 
acquisition of COTS items (see 3.502).
    (c) The applicability of 41 U.S.C. 254(d) and 10 U.S.C. 2306a, 
Truth in Negotiations Act (see Subpart 15.4) and 41 U.S.C. 422, Cost 
Accounting Standards (see section 12.214) have been modified in regards 
to contracts or subcontracts at any tier for the acquisition of COTS 
items.

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS


22.1310  [Amended]

    11. Amend section 22.1310 by removing the word ``Insert'' from the 
introductory text of paragraph (a)(1) and adding ``Except for the 
acquisition of commercially available off-the-shelf items, insert'' in 
its place.


22.1408  [Amended]

    12. Amend section 22.1408 in the introductory text of paragraph (a) 
by removing the comma after ``$10,000'' and adding ``and are not for 
the acquisition of commercially available off-the-shelf items,'' in its 
place.

PART 23--ENVIRONMENT, CONSERVATION, OCCUPATIONAL SAFETY, AND DRUG-
FREE WORKPLACE


23.406  [Amended]

    13. Amend section 23.406 by removing the word ``Insert'' from 
paragraphs (a) and (b) and adding ``Except for the acquisition of 
commercially available off-the-shelf items, insert'' in its place.

PART 25--FOREIGN ACQUISITION

    14. Amend section 25.401 by--
    a. Removing the word ``and'' from the end of paragraph (a)(4);
    b. Removing the period at the end of paragraph (a)(5) and adding 
``; and'' in its place; and
    c. Adding paragraph (a)(6) to read as follows:


25.401  Exceptions.

    (a) * * *
    (6) Acquisitions for commercially available off-the-shelf items.
* * * * *
    15. Amend section 25.1101 by--
    a. Removing from the introductory text of paragraph (a)(1) ``or 
$15,000 for acquisitions as described in 13.201(g)(1)(ii)'';
    b. Removing the word ``or'' from the end of paragraph (a)(1)(ii);
    c. Removing the period from the end of paragraph (a)(1)(iii) and 
adding ``; or'' in its place;
    d. Adding paragraph (a)(1)(iv); and
    e. Removing the word ``Insert'' from the introductory text of 
paragraph (b)(1)(i) and adding ``Except for the acquisition of 
commercially available off-the-shelf items, insert'' in its place. The 
added text reads as follows:


25.1101  Acquisition of supplies.

* * * * *
    (a)(1) * * *
    (iv) The acquisition is for commercially available off-the-shelf 
items.
* * * * *

PART 27--PATENTS, DATA, AND COPYRIGHTS

    16. Amend section 27.409 by--
    a. Removing the word ``or'' from the end of paragraph(a)(1)(vi);
    b. Removing ``. (See 27.408.)'' from the end of paragraph 
(a)(1)(vii) and adding ``(see 27.408); or'' in its place; and
    c. Adding paragraph (a)(1)(viii) to read as follows:


27.409  Solicitation provisions and contract clauses.

    (a)(1) * * *
    (viii) An acquisition for commercially available off-the-shelf 
items.
* * * * *

PART 44--SUBCONTRACTING POLICIES AND PROCEDURES


44.400  [Amended]

    17. Amend section 44.400 by removing the period at the end of the 
sentence and adding ``and section 4203 (Pub. L. 104-106).'' in its 
place.

PART 47--TRANSPORTATION


47.507  [Amended]

    18. Amend section 47.507 in paragraph (a)(1) by removing ``Insert'' 
and adding ``Except for the acquisition of commercially available off-
the-shelf items, insert'' in its place.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


52.212-3  [Amended]

    19. Amend section 52.212-3 by revising the date of the provision to 
read ``(Date)''; and in paragraph (e) of the clause by removing the 
period after ``$100,000'' and adding ``, except for the acquisition of 
commercially available off-the-shelf items.'' in its place.
    20. Amend section 52.212-4 by adding Alternate I to read as 
follows:


52.212-4  Contract Terms and Conditions--Commercial Items.

* * * * *
    (Alternate I (XX/XX)). As prescribed in 12.301(b)(3), substitute 
the following paragraph (i)(1) for paragraph(i)(1) in the basic 
clause:
    (i)(1) Items accepted. Payment shall be made based upon the 
Contractor's submission of an invoice that is supported by evidence 
the Contractor has delivered the supplies to a post office, common 
carrier, or point of first receipt by the Government. Payment prior 
to acceptance shall not abrogate the Contractor's responsibilities 
to replace, repair, or correct--
    (i) Supplies not received at destination;
    (ii) Supplies damaged in transit; or
    (iii) Supplies that do not conform to the contract.

    21. Add section 52.212-XX to read as follows:


52.212-XX  Contract Terms and Conditions Required to Implement Statutes 
or Executive Orders--Commercially Available Off-the-Shelf (COTS) Items.

    As prescribed in 12.301(b)(5), insert the following clause:

Contract Terms and Conditions Required To Implement Statutes or 
Executive Orders--Commercially Available Off-the-Shelf (COTS) Items 
(Date)

    (a) The Contractor shall comply with the following Federal 
Acquisition Regulation (FAR) clause, which is incorporated in this

[[Page 2451]]

contract by reference, to implement provisions of law or Executive 
orders applicable to acquisitions of COTS items: 52.233-3, Protest 
After Award (Aug 1996) (31 U.S.C. 3553).
    (b) The Contractor shall comply with the FAR clauses in this 
paragraph (b) that the Contracting Officer has indicated as being 
incorporated in this contract by reference to implement provisions 
of law or Executive orders applicable to acquisitions of COTS items: 
[Contracting Officer check as appropriate.]
    ---- (1) 52.219-3, Notice of Total HUBZone Set-Aside (Jan 1999) 
(15 U.S.C. 657a).
    ---- (2) 52.219-4, Notice of Price Evaluation Preference for 
HUBZone Small Business Concerns (Jan 1999) (if the offeror elects to 
waive the preference, it shall so indicate in its offer) (15 U.S.C. 
657a).
    ---- (3)(i) 52.219-5, Very Small Business Set-Aside (June 2003) 
(Pub. L. 103-403, section 304, Small Business Reauthorization and 
Amendments Act of 1994).
    ---- (ii) Alternate I (Mar 1999) of 52.219-5.
    ---- (iii) Alternate II (June 2003) of 52.219-5.
    ---- (4)(i) 52.219-6, Notice of Total Small Business Set-Aside 
(June 2003) (15 U.S.C. 644).
    ---- (ii) Alternate I (Oct 1995) of 52.219-6.
    ---- (5)(i) 52.219-7, Notice of Partial Small Business Set-Aside 
(June 2003) (15 U.S.C. 644).
    ---- (ii) Alternate I (Oct 1995) of 52.219-7.
    ---- (6) 52.219-8, Utilization of Small Business Concerns (Oct 
2000) (15 U.S.C. 637(d)(2) and (3)).
    ---- (7)(i) 52.219-9, Small Business Subcontracting Plan (Jan 
2002) (15 U.S.C. 637(d)(4)).
    ---- (ii) Alternate I (Oct 2001) of 52.219-9.
    ---- (iii) Alternate II (Oct 2001) of 52.219-9.
    ---- (8) 52.219-14, Limitations on Subcontracting (Dec 1996) (15 
U.S.C. 637(a)(14)).
    ---- (9)(i) 52.219-23, Notice of Price Evaluation Adjustment for 
Small Disadvantaged Business Concerns (June 2003) (Pub. L. 103-355, 
section 7102, and 10 U.S.C. 2323). (if the offeror elects to waive 
the adjustment, it shall so indicate in its offer).
    ---- (ii) Alternate I (June 2003) of 52.219-23.
    ---- (10) 52.219-25, Small Disadvantaged Business Participation 
Program--Disadvantaged Status and Reporting (Oct 1999) (Pub. L. 103-
355, section 7102, and 10 U.S.C. 2323).
    ---- (11) 52.219-26, Small Disadvantaged Business Participation 
Program--Incentive Subcontracting (Oct 2000) (Pub. L. 103-355, 
section 7102, and 10 U.S.C. 2323).
    ---- (12) 52.222-3, Convict Labor (June 2003) (E.O. 11755).
    ---- (13) 52.222-19, Child Labor--Cooperation with Authorities 
and Remedies (Sep 2002) (E.O. 13126).
    ---- (14) 52.222-21, Prohibition of Segregated Facilities (Feb 
1999).
    ---- (15) 52.222-26, Equal Opportunity (Apr 2002) (E.O. 11246).
    ---- (16) 52.225-13, Restrictions on Certain Foreign Purchases 
(Dec 2003) (E.O.'s proclamations, and statutes administered by the 
Office of Foreign Assets Control of the Department of the Treasury).
    ---- (17) 52.225-15, Sanctioned European Union Country End 
Products (Feb 2000) (E.O. 12849).
    ---- (18) 52.232-29, Terms for Financing of Purchases of 
Commercial Items (Feb 2002) (41 U.S.C. 255(f), 10 U.S.C. 2307(f)).
    ---- (19) 52.232-30, Installment Payments for Commercial Items 
(Oct 1995) (41 U.S.C. 255(f), 10 U.S.C. 2307(f)).
    ---- (20) 52.232-33, Payment by Electronic Funds Transfer--
Central Contractor Registration (Oct 2003) (31 U.S.C. 3332).
    ---- (21) 52.232-34, Payment by Electronic Funds Transfer--Other 
than Central Contractor Registration (May 1999) (31 U.S.C. 3332).
    ---- (22) 52.232-36, Payment by Third Party (May 1999) (31 
U.S.C. 3332).
    (c)(1) Notwithstanding the requirements of the clauses in 
paragraphs (a) and (b) of this clause, the Contractor is not 
required to flow down any FAR clause, other than those in paragraphs 
(i) through (ii) of this paragraph in a subcontract for COTS items. 
Unless other-wise indicated below, the extent of the flow down shall 
be as required by the clause--
    (i) 52.219-8, Utilization of Small Business Concerns (Oct 2000) 
(15 U.S.C. 637(d)(2) and (3)), in all subcontracts that offer 
further subcontracting opportunities. If the subcontract (except 
subcontracts to small business concerns) exceeds $500,000 
($1,000,000 for construction of any public facility), the 
subcontractor must include 52.219-8 in lower tier subcontracts that 
offer subcontracting opportunities.
    (ii) 52.222-26, Equal Opportunity (Apr 2002) (E.O. 11246).
    (2) While not required, the Contractor may include in its 
subcontracts for COTS items a minimal number of additional clauses 
necessary to satisfy its contractual obligations.
    (End of clause)

    22. Amend section 52.244-6 by--
    a. Revising the date of the clause to read ``(Date)'';
    b. In paragraph (a) of the clause by adding, in alphabetical order, 
the definition ``Commercially available off-the-shelf item'';
    c. In paragraph (c)(1)(iii) of the clause by removing the semicolon 
at the end of the paragraph and adding ``. (This clause does not apply 
to subcontracts for commercially available off-the-shelf items.)'' in 
its place; and
    d. Adding ``(This clause does not apply to subcontracts for 
commercially available off-the-shelf items.)'' to the end of paragraphs 
(c)(1)(iv) and (c)(1)(v) of the clause. The added definition reads as 
follows:


52.244-6  Subcontracts for Commercial Items.

* * * * *

Subcontracts for Commercial Items (Date)

    (a) * * *
    Commercially available off-the-shelf item has the meaning 
contained in the clause at 52.202-1, Definitions.
* * * * *

[FR Doc. 04-852 Filed 1-14-04; 8:45 am]
BILLING CODE 6820-EP-P