[Federal Register Volume 69, Number 35 (Monday, February 23, 2004)]
[Rules and Regulations]
[Pages 8312-8315]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-3690]



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Part III





Department of Defense

General Services Administration

National Aeronautics and Space Administration





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48 CFR Parts 2, 10, et al.



Federal Acquisition Regulation; Special Emergency Procurement 
Authority; Small Entity Compliance Guide; Interim Rules

  Federal Register / Vol. 69, No. 35 / Monday, February 23, 2004 / 
Rules and Regulations  

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 10, 12, 13, 15, 19, and 25

[FAC 2001-20; FAR Case 2003-022]
RIN 9000-AJ88


Federal Acquisition Regulation; Special Emergency Procurement 
Authority

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

ACTION: Interim rule with request for comments.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on an interim 
rule amending the Federal Acquisition Regulation (FAR) to implement the 
special emergency procurement authorities of section 1443 of the 
Services Acquisition Reform Act of 2003 (Title XIV of Pub. L. 108-136). 
The Councils will publish a final rule upon receipt and evaluation of 
comments received in response to this interim rule.
    Section 1443 increases the amount of the micro-purchase threshold 
and the simplified acquisition threshold for procurements of supplies 
or services by or for an executive agency that, as determined by the 
head of the agency, are to be used in support of a contingency 
operation or to facilitate the defense against or the recovery from 
nuclear, biological, chemical, or radiological attack. Also, the head 
of the contracting activity carrying out a procurement of supplies or 
services to facilitate defense against or recovery from nuclear, 
biological, chemical, or radiological attack may treat such supplies or 
services as a commercial item.

DATES: Effective Date: February 23, 2004.
    Comment Date: Interested parties should submit comments to the FAR 
Secretariat at the address shown below on or before April 23, 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: Ms. Laurie 
Duarte, Washington, DC 20405.
    Submit electronic comments via the Internet to--farcase.2003-
[email protected]. Please submit comments only and cite FAC 2001-20, FAR case 
2003-022, 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 FAC 2001-20, FAR case 2003-022.

SUPPLEMENTARY INFORMATION: 

A. Background

    This interim rule implements Section 1443 of the Services 
Acquisition Reform Act of 2003 (Title XIV of Pub. L. 108-136). Section 
1443 increases the amount of the micro-purchase threshold and the 
simplified acquisition threshold for procurements of supplies or 
services by or for an executive agency that, as determined by the head 
of the agency, are to be used in support of a contingency operation or 
to facilitate the defense against or the recovery from nuclear, 
biological, chemical, or radiological attack. Section 1443 also 
authorizes the expanded use of Simplified Acquisition and Commercial 
Items procedures.
    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 economic impact on a substantial 
number of small entities within the meaning of the Regulatory 
Flexibility Act, 5 U.S.C. 601 et seq. However, the increased thresholds 
are limited to procurements that support a contingency operation or to 
facilitate the defense against or the recovery from nuclear, 
biological, chemical, or radiological attack. There are no data 
available on the number of procurements that will be eligible. We 
expect the increased thresholds to this limited class of procurements 
will apply to a very small number of small entities.
    An Initial Regulatory Flexibility Act Analysis has been prepared 
and is as follows:

Initial Regulatory Flexibility Act Analysis--FAR Case 2003-022

    This Initial Regulatory Flexibility Analysis has been prepared 
in accordance with Section 603, Title 5, of the United States Code.
    1. Description of the reasons why action by the agency is being 
considered. This interim rule amends the Federal Acquisition 
Regulation (FAR) in order to implement Section 1443 of the Services 
Acquisition Reform Act of 2003 (Title XIV of Pub. L. 108-136). 
Section 1443 increases the amount of the micro-purchase threshold 
and the simplified acquisition threshold for procurements of 
supplies and services to support a contingency operation or to 
facilitate defense against or recovery from nuclear, biological, 
chemical, or radiological attack.
    2. Succinct statement of the objectives of, and legal basis for, 
the interim rule. This interim rule implements Section 1443 of the 
Services Acquisition Reform Act of 2003 (Title XIV of Pub. L. 108-
136).
    3. Description of, and, where feasible, estimate of the number 
of small entities to which the interim rule will apply. The 
increased thresholds are limited to procurements that are to support 
a contingency operation or to facilitate defense against or recovery 
from nuclear, biological, chemical, or radiological attack. There 
are no data available on the number of procurements that will be 
eligible. However, we expect the number of small entities that will 
be impacted by the increased thresholds to this limited class of 
procurements to be very small. In addition, although not required by 
the statute, the interim rule raises the small business set-aside 
ceilings for purchases made under the authority of Section 1443 of 
the Services Acquisition Reform Act of 2003 (Title XIV of Pub. L. 
108-136).
    4. Description of projected reporting, record keeping, and other 
compliance requirements of the interim rule, including an estimate 
of the classes of small entities which will be subject to the 
requirement and the type of professional skills necessary for 
preparation of the report or record. There are no reporting, record 
keeping, or other compliance requirements for this interim rule.
    5. Identification, to the extent practicable, of all relevant 
Federal rules which may duplicate, overlap, or conflict with the 
interim rule. This rule does not duplicate, overlap, or conflict 
with other relevant Federal rules.
    6. Description of any significant alternatives to the interim 
rule, which accomplish the stated objectives of applicable statutes 
and which minimize any significant economic impact of the interim 
rule on small entities. There are no significant alternatives to the 
interim rule that would accomplish the stated objectives yet further 
reduce impact on small entities. The rule includes only FAR text 
revisions required to implement the statute.

    The FAR Secretariat has submitted a copy of the Initial Regulatory 
Flexibility Analysis (IRFA) to the Chief Counsel for Advocacy of the 
Small Business Administration. Interested parties may obtain a copy 
from the FAR Secretariat. The Councils will consider comments from 
small entities concerning the affected FAR parts 2, 10, 12, 13, 15, 19, 
and 25 in accordance with 5 U.S.C. 610. Interested parties must submit 
such

[[Page 8313]]

comments separately and should cite 5 U.S.C. 601, et seq. (FAC 2001-20, 
FAR case 2003-022), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose information collection requirements that require 
the approval of the Office of Management and Budget under 44 U.S.C. 
3501, et seq.

D. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DoD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that urgent and compelling reasons exist to promulgate this 
interim rule without prior opportunity for public comment. This action 
is necessary because the FAR coverage implements Section 1443 of the 
Services Acquisition Reform Act of 2003, signed on November 24, 2003, 
which provides urgently needed emergency authorities. However, pursuant 
to Public Law 98-577 and FAR 1.501, the Councils will consider public 
comments received in response to this interim rule in the formation of 
the final rule.

List of Subjects in 48 CFR Parts 2, 10, 12, 13, 15, 19, and 25

    Government procurement.

    Dated: February 13, 2004.
Laura Auletta,
Director, Acquisition Policy Division.

Federal Acquisition Circular

    Federal Acquisition Circular (FAC) 2001-20 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 2001-20 are 
effective February 23, 2004.

    Dated: February 12, 2004.

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

    Dated: February 13, 2004.

David A. Drabkin,
Deputy Associate Administrator, Office of Acquisition Policy, 
General Services Administration.

    Dated: February 12, 2004.

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


0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 10, 12, 13, 15, 19, 
and 25 as set forth below:
0
1. The authority citation for 48 CFR parts 2, 10, 12, 13, 15, 19, and 
25 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

0
2. Amend section 2.101 in paragraph (b) by revising the definitions 
``Micro-purchase threshold'' and ``Simplified acquisition threshold'' 
to read as follows:


2.101  Definitions.

* * * * *
    (b) * * *
    Micro-purchase threshold means $2,500, except it means--
    (1) $2,000 for construction subject to the Davis Bacon Act; and
    (2) $15,000 for acquisitions of supplies or services that, as 
determined by the head of the agency, are to be used to support a 
contingency operation or to facilitate defense against or recovery from 
nuclear, biological, chemical, or radiological attack, as described in 
13.201(g)(1), except for construction subject to the Davis Bacon Act 
(Pub. L. 108-136, Title XIV, Sec. 1443).
* * * * *
    Simplified acquisition threshold means $100,000, except for 
acquisitions of supplies or services that, as determined by the head of 
the agency, are to be used to support a contingency operation or to 
facilitate defense against or recovery from nuclear, biological, 
chemical, or radiological attack (Pub. L. 108-136, Title XIV, Sec. 
1443), the term means--
    (1) $250,000 for any contract to be awarded and performed, or 
purchase to be made, inside the United States; and
    (2) $500,000 for any contract to be awarded and performed, or 
purchase to be made, outside the United States.
* * * * *

PART 10--MARKET RESEARCH

0
3. Amend section 10.001 by revising paragraph (a)(2)(v) to read as 
follows:


10.001  Policy.

    (a) * * *
    (2) * * *
    (v) Agencies shall conduct market research on an ongoing basis, and 
take advantage to the maximum extent practicable of commercially 
available market research methods, to identify effectively the 
capabilities, including the capabilities of small businesses and new 
entrants into Federal contracting, that are available in the 
marketplace for meeting the requirements of the agency in furtherance 
of a contingency operation or defense against or recovery from nuclear, 
biological, chemical, or radiological attack; and
* * * * *

PART 12--ACQUISITION OF COMMERCIAL ITEMS

0
4. Amend section 12.102 by revising paragraph (f) to read as follows:


12.102  Applicability.

* * * * *
    (f)(1) Contracting officers may treat any acquisition of supplies 
or services that, as determined by the head of the agency, are to be 
used to facilitate defense against or recovery from nuclear, 
biological, chemical, or radiological attack, as an acquisition of 
commercial items.
    (2) A contract in an amount greater than $15,000,000 that is 
awarded on a sole source basis for an item or service treated as a 
commercial item under paragraph (f)(1) of this section but does not 
meet the definition of a commercial item as defined at FAR 2.101 shall 
not be exempt from--
    (i) Cost accounting standards (see Subpart 30.2); or
    (ii) Cost or pricing data requirements (see 15.403).

0
5. Amend section 12.203 by revising the last sentence to read as 
follows:


12.203  Procedures for solicitation, evaluation, and award.

     * * * For acquisitions of commercial items exceeding the 
simplified acquisition threshold but not exceeding $5,000,000 
($10,000,000 for acquisitions entered into under the authority of 
12.102(f)(1)), including options, contracting activities shall employ 
the simplified procedures authorized by Subpart 13.5 to the maximum 
extent practicable.

PART 13--SIMPLIFIED ACQUISITION PROCEDURES

0
6. Amend section 13.000 by revising the second sentence to read as 
follows:


13.000  Scope of part.

     * * * Subpart 13.5 provides special authority for acquisitions of 
commercial items exceeding the simplified acquisition threshold but not 
exceeding $5,000,000 ($10,000,000 for acquisitions entered into under 
the authority of 12.102(f)(1)), including options. * * *

0
7. Amend section 13.003 by revising paragraphs (b)(1), (c), and (g)(2) 
to read as follows:

[[Page 8314]]

13.003  Policy.

* * * * *
    (b)(1) Each acquisition of supplies or services that has an 
anticipated dollar value exceeding $2,500 ($15,000 for acquisitions as 
described in 13.201(g)(1)) and not exceeding $100,000 ($250,000 for 
acquisitions described in paragraph (1) of the Simplified Acquisition 
Threshold definition at 2.101) is reserved exclusively for small 
business concerns and shall be set aside (see 19.000 and Subpart 19.5). 
See 19.502-2 for exceptions.
* * * * *
    (c)(1) The contracting officer shall not use simplified acquisition 
procedures to acquire supplies and services if the anticipated award 
will exceed--
    (i) The simplified acquisition threshold; or
    (ii) $5,000,000 ($10,000,000 for acquisitions entered into under 
the authority of 12.102(f)(1)), including options, for acquisitions of 
commercial items using Subpart 13.5.
    (2) Do not break down requirements aggregating more than the 
simplified acquisition threshold (or for commercial items, the 
threshold in Subpart 13.5) or the micro-purchase threshold into several 
purchases that are less than the applicable threshold merely to--
    (i) Permit use of simplified acquisition procedures; or
    (ii) Avoid any requirement that applies to purchases exceeding the 
micro-purchase threshold.
* * * * *
    (g) * * *
    (2) $5,000,000 ($10,000,000 for acquisitions entered into under the 
authority of 12.102(f)(1)) for commercial items, use any appropriate 
combination of the procedures in Parts 12, 13, 14, and 15 (see 
paragraph (d) of this section).
* * * * *


13.105  [Amended]

0
8. Amend section 13.105 in the first sentence of paragraph (b) by 
removing ``and (f)(2)''.

0
9. Amend section 13.201 by revising paragraph (g) to read as follows:


13.201  General.

* * * * *
    (g)(1) For acquisitions of supplies or services that, as determined 
by the head of the agency, are to be used to support a contingency 
operation or to facilitate defense against or recovery from nuclear, 
biological, chemical, or radiological attack, the micro-purchase 
threshold is $15,000.
    (2) Purchases using this authority must have a clear and direct 
relationship to the support of a contingency operation or the defense 
against or recovery from nuclear, biological, chemical, or radiological 
attack.

0
10. Amend section 13.303-5 by revising paragraphs (b)(1) and (b)(2) to 
read as follows:


13.303-5  Purchases under BPAs.

* * * * *
    (b) * * *
    (1) The simplified acquisition threshold and the $5,000,000 
limitation for individual purchases ($10,000,000 for purchases entered 
into under the authority of 12.102(f)(1)) do not apply to BPAs 
established in accordance with 13.303-2(c)(3).
    (2) The limitation for individual purchases for commercial item 
acquisitions conducted under Subpart 13.5 is $5,000,000 ($10,000,000 
for purchases entered into under the authority of 12.102(f)(1)).
* * * * *

0
11. Amend section 13.500 by revising the first sentence of paragraph 
(a); and removing paragraph (e). The revised text reads as follows:


13.500  General.

    (a) This subpart authorizes, as a test program, use of simplified 
procedures for the acquisition of supplies and services in amounts 
greater than the simplified acquisition threshold but not exceeding 
$5,000,000 ($10,000,000 for acquisitions entered into under the 
authority of 12.102(f)(1)), including options, if the contracting 
officer reasonably expects, based on the nature of the supplies or 
services sought, and on market research, that offers will include only 
commercial items. * * *
* * * * *


13.501  [Amended]

0
12. Amend section 13.501 by removing from paragraph (a)(1)(ii) 
``Homeland Security Act (Pub. L. 107-296, section 856)'' and adding 
``Services Acquisition Reform Act of 2003 (Title XIV of Pub. L. 108-
136)'' in its place.

PART 15--CONTRACTING BY NEGOTIATION

0
13. Amend section 15.403-1 in paragraph (c)(3) by adding the paragraph 
designation ``(i)'' before the first sentence, and adding paragraph 
(c)(3)(ii) to read as follows:


15.403-1  Prohibition on obtaining cost or pricing data (10 U.S.C. 
2306a and 41 U.S.C. 254b).

* * * * *
    (c) * * *
    (3) Commercial items. (i) * * *
    (ii) Any acquisition for noncommercial supplies or services treated 
as commercial items at 12.102(f)(1), except sole source contracts 
greater than $15,000,000, is exempt from the requirements for cost or 
pricing data (Pub. L. 108-136, Sec. 1443).
* * * * *

PART 19--SMALL BUSINESS PROGRAMS

0
14. Amend section 19.502-1 by revising paragraph (b) to read as 
follows:


19.502-1  Requirements for setting aside acquisitions.

* * * * *
    (b) This requirement does not apply to purchases of $2,500 or less 
($15,000 or less for acquisitions as described in 13.201(g)(1)), or 
purchases from required sources of supply under Part 8 (e.g., Federal 
Prison Industries, Committee for Purchase From People Who are Blind or 
Severely Disabled, and Federal Supply Schedule contracts).

0
15. Amend section 19.502-2 by revising the first sentence of paragraph 
(a) to read as follows:


19.502-2  Total small business set-asides.

    (a) Except for those acquisitions set aside for very small business 
concerns (see Subpart 19.9), each acquisition of supplies or services 
that has an anticipated dollar value exceeding $2,500 ($15,000 for 
acquisitions as described in 13.201(g)(1)), but not over $100,000 
($250,000 for acquisitions described in paragraph (1) of the Simplified 
Acquisition Threshold definition at 2.101), is automatically reserved 
exclusively for small business concerns and shall be set aside for 
small business unless the contracting officer determines there is not a 
reasonable expectation of obtaining offers from two or more responsible 
small business concerns that are competitive in terms of market prices, 
quality, and delivery. * * *
* * * * *


19.805-1  [Amended]

0
16. Amend section 19.805-1 by--
0
a. Adding ``or'' to the end of paragraph (b)(1);
0
b. Removing ``; or'' from the end of paragraph (b)(2) and adding a 
period in its place; and
0
c. Removing paragraph (b)(3).

0
17. Amend section 19.903 by adding the word ``or'' to the end of 
paragraph (b)(2); revising paragraph (b)(3); and removing paragraph 
(b)(4). The revised text reads as follows:

[[Page 8315]]

19.903  Applicability.

* * * * *
    (b) * * *
    (3) Acquisitions of $15,000 or less for acquisitions of supplies or 
services that, as determined by the head of the agency, are to be used 
to support a contingency operation or to facilitate defense against or 
recovery from nuclear, biological, chemical, or radiological attack as 
described in 13.201(g)(1).


19.1306  [Amended]

0
18. Amend section 19.1306 by removing paragraph (c).

PART 25--FOREIGN ACQUISITION

0
19. Amend section 25.1101 by revising the introductory text of 
paragraph (a)(1) to read as follows:


25.1101  Acquisition of supplies.

* * * * *
    (a)(1) Insert the clause at 52.225-1, Buy American Act--Supplies, 
in solicitations and contracts with a value exceeding $2,500 ($15,000 
for acquisitions as described in 13.201(g)(1)) but not exceeding 
$25,000; and in solicitations and contracts with a value exceeding 
$25,000, if none of the clauses prescribed in paragraphs (b) and (c) of 
this section apply, except if--
* * * * *

0
20. Amend section 25.1103 by revising paragraph (a) to read as follows:


25.1103  Other provisions and clauses.

    (a) Restrictions on certain foreign purchases. Insert the clause at 
52.225-13, Restrictions on Certain Foreign Purchases, in solicitations 
and contracts with a value exceeding $2,500, $15,000 for acquisitions 
as described in 13.201(g)(1), unless an exception applies.
* * * * *
[FR Doc. 04-3690 Filed 2-20-04; 8:45 am]
BILLING CODE 6820-EP-P