[Federal Register Volume 69, Number 117 (Friday, June 18, 2004)]
[Rules and Regulations]
[Pages 34223-34226]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-13617]



[[Page 34223]]

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Part II





Department of Defense

General Services Administration

National Aeronautics and Space Administration





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48 CFR Chapter 1



Federal Acquisition Regulations; Final Rules

Federal Register / Vol. 69, No. 117 / Friday, June 18, 2004 / Rules 
and Regulations

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1


Federal Acquisition Circular 2001-24; Introduction

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

ACTION: Summary presentation of final and interim rules.

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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) 2001-24. 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.acqnet.gov/far.

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

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, at (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 2001-24 and specific FAR case number(s). Interested parties 
may also visit our Web site at http://www.acqnet.gov/far.

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                  Item                                Subject                FAR case            Analyst
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I.......................................  Incentives for Use of               2004-004  Wise.
                                           Performance-Based Contracting
                                           for Services (Interim).
II......................................  Definitions Clause.............     2002-013  Parnell.
III.....................................  Procurement Lists..............     2003-013  Nelson.
IV......................................  Determining Official for            2004-009  Goral.
                                           Employment Provision
                                           Compliance--Immigration and
                                           Nationality Act (INA).
V.......................................  Federal Supply Schedules            1999-603  Nelson.
                                           Services and Blanket Purchase
                                           Agreements (BPAs).
VI......................................  Designated Countries--New           2004-008  Davis.
                                           European Communities Member
                                           States.
VII.....................................  Buy American Act--Nonavailable      2003-007  Davis.
                                           Articles.
VIII....................................  Application of Cost Principles      2002-006  Loeb.
                                           and Procedures and Accounting
                                           for Unallowable Costs.
IX......................................  Gains and Losses, Maintenance       2002-008  Loeb.
                                           and Repair Costs, and Material
                                           Costs.
X.......................................  Technical Amendments...........
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SUPPLEMENTARY INFORMATION: Summaries for each FAR rule follow. For the 
actual revisions and/or amendments to these FAR cases, refer to the 
specific item number and subject set forth in the documents following 
these item summaries.
    FAC 2001-24 amends the FAR as specified below:

Item I--Incentives for Use of Performance-Based Contracting for 
Services (Interim) (FAR Case 2004-004)

    This interim rule amends the FAR to implement Sections 1431 and 
1433 of the National Defense Authorization Act for Fiscal Year 2004 
(Pub. L. 108-136). Section 1431 enacts Governmentwide authority to 
treat performance-based contracts or task orders for services as 
commercial items if certain conditions are met, and requires agencies 
to report on performance-based contracts or task orders awarded using 
this authority. Section 1433 amends the definition of commercial item 
to add specific performance-based terminology and to conform to the 
language added by Section 1431. Contracting officers will be able to 
use FAR Part 12, Acquisition of Commercial Items, and Subpart 37.6, 
Performance-Based Contracting, for non-commercial services and treat 
these services as commercial services when specific conditions are met. 
Agencies will be required to report on performance-based contracts or 
task orders awarded using this authority.

Item II--Definitions Clause (FAR Case 2002-013)

    This final rule revises FAR 2.201 and the clause at 52.202-1 to 
clarify the applicability of FAR definitions to solicitation provisions 
and contract clauses. The list of definitions in 52.202-1 is removed 
and replaced with policy stating that when a solicitation provision or 
contract clause uses a word or term that is defined in the FAR, the 
word or term has the meaning given in FAR 2.101 at the time the 
solicitation was issued. Certain exceptions to this policy are listed 
in FAR 52.202-1.

Item III--Procurement Lists (FAR Case 2003-013)

    This final rule amends the FAR to clarify that the Javits-Wagner 
O'Day (JWOD) program becomes a mandatory source of supplies and 
services when the supplies or services have been added to the 
Procurement List maintained by the Committee for Purchase from People 
Who Are Blind or Severely Disabled.

Item IV--Determining Official for Employment Provision Compliance--
Immigration and Nationality Act (INA) (FAR Case 2004-009)

    This final rule amends FAR 9.406-2(b)(2) by revising the 
responsibility for determining when a contractor is not in compliance 
with the Immigration and Nationality Act (INA) to include both the 
Attorney General of the United States and the Secretary of Homeland 
Security.
    This rule implements Executive Order 13286 published March 5, 2003, 
which amended Section 4 of Executive Order 12989 published February 15, 
1996.
    Debarring officials may now debar a contractor based on a 
determination by the Secretary of Homeland Security or the Attorney 
General of the United States.

Item V--Federal Supply Schedules Services and Blanket Purchase 
Agreements (BPAs) (FAR Case 1999-603)

    This final rule amends the FAR in order to incorporate policies and 
procedures for services under Federal Supply Schedules. The rule--
     Adds a definitions section;
     Adds information regarding the Department of Veterans 
Affairs delegated authority to establish medical supply schedules;

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     Adds language to clarify the differences between an 
Authorized Federal Supply Schedules (FSS) Pricelist and a FSS 
publication;
     Adds additional information regarding e-buy, GSA's 
electronic quote system for the schedules program;
     Clarifies that competition shall not be sought outside the 
Federal Supply Schedules;
     Adds language to make it clear that the contracting 
officer placing an order on another agency's behalf is responsible for 
applying that agency's regulatory and statutory requirements; and that 
the requiring activity is required to provide information on the 
applicable regulatory and statutory requirements to the contracting 
officer;
     Adds new coverage on use of statements of work when 
acquiring services from the schedules;
     Requires that when an agency awards a task order requiring 
a statement of work, that if the award is based on other than price 
(best value), the contracting officer shall provide a brief explanation 
of the basis for the award decision to any unsuccessful contractor that 
requests such information.
     Adds language stating that the performance period of 
Blanket Purchase Agreement (BPA) established under the schedules 
program may cross option periods on the base contracts;
     Refines guidance regarding the use of Governmentwide BPAs;
     Adds language to require the ordering activity to document 
the results of its BPA review;
     Adds language that encourages or reminds agencies that 
they can seek a price reduction at any time, not just when an order 
exceeds the maximum order threshold;
     Adds additional language to allow for consideration of 
socio-economic status when identifying the potential competitors for an 
order;
     Reinforces documentation requirements generally and adds 
new guidance addressing the documentation of orders for services and 
sole source orders;
     Adds new coverage to allow agencies to make payment for 
oral or written orders by any authorized means, including the 
Governmentwide commercial purchase card;
     Reserves the ordering procedures for Mandatory Use 
Schedules section;
     Clarifies the procedures for termination for cause and 
convenience; and
     Reorganizes and revises the subpart text for ease of use.

Item VI--Designated Countries--New European Communities Member States 
(FAR Case 2004-008)

    This final rule amends the FAR to implement a determination by the 
United States Trade Representative (USTR) under the Trade Agreements 
Act that suppliers from the 10 new member states of the European 
Communities (EC) (i.e., the European Union) are eligible to participate 
in U.S. Government procurement under the terms and conditions of the 
World Trade Organization Government Procurement Agreement (WTO GPA). 
This means that in acquisitions subject to the WTO GPA, the contracting 
officer can accept offers of eligible products from Cyprus, the Czech 
Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the 
Slovak Republic, and Slovenia without application of the Buy American 
Act evaluation factor.

Item VII--Buy American Act--Nonavailable Articles (FAR Case 2003-007)

    This final rule amends FAR 25.104(a) to add certain food and 
textile items to the list of articles not available from domestic 
sources in sufficient and reasonably available commercial quantities of 
a satisfactory quality. This case is based on extensive market research 
by the Defense Logistics Agency. Unless the contracting officer learns 
before the time designated for receipt of bids in sealed bidding or 
final offers in negotiation that an article on the list is available 
domestically in sufficient and reasonably available quantities of a 
satisfactory quality, the Buy American Act does not apply to 
acquisition of these items as end products, and the contracting officer 
may treat foreign components of the same class or kind as domestic 
components.

Item VIII--Application of Cost Principles and Procedures and Accounting 
for Unallowable Costs (FAR Case 2002-006)

    This final rule amends the FAR by revising FAR 31.204, Application 
of principles and procedures, to improve clarity and structure. The 
case was initiated as a result of comments and recommendations received 
from industry and Government representatives during a series of public 
meetings. This rule is of particular interest to contractors and 
contracting officers who use cost analysis to price contracts and 
modifications, and who determine or negotiate reasonable costs in 
accordance with a clause of a contract, e.g., price revision of fixed-
price incentive contracts, terminated contracts, or indirect cost 
rates.

Item IX--Gains and Losses, Maintenance and Repair Costs, and Material 
Costs (FAR Case 2002-008)

    This final rule amends the FAR by deleting the cost principle at 
FAR 31.205-24, Maintenance and repair costs, because either Cost 
Accounting Standards (CAS) or Generally Accepted Accounting Practices 
(GAAP) adequately address these costs. The rule also revises the cost 
principles at FAR 31.205-7, Contingencies; FAR 31.205-26, Material 
costs; and FAR 31.205-44, Training and education costs, by improving 
clarity and structure, and removing unnecessary and duplicative 
language.
    The case was initiated as a result of comments and recommendations 
received from industry and Government representatives during a series 
of public meetings. This rule is of particular interest to contractors 
and contracting officers who use cost analysis to price contracts and 
modifications, and who determine or negotiate reasonable costs in 
accordance with a clause of a contract, e.g., price revision of fixed-
price incentive contracts, terminated contracts, or indirect cost 
rates.

Item X--Technical Amendments

    This amendment makes editorial changes at 8.003(d), 11.102, and 
11.202(b), and removes sections 53.301-254 and 53.301-255.

    Dated: June 10, 2004.
Ralph J. De Stefano,
Acting Director, Acquisition Policy Division.

Federal Acquisition Circular

Number 2001-224

    Federal Acquisition Circular (FAC) 2001-24 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 2001-24 are 
effective July 19, 2004, except for Items I, IV, VI, and X, which 
are effective June 18, 2004.

    Dated: June 9, 2004.

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

Dated: June 10, 2004.

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

Dated: June 8, 2004.

Tom Luedtke,

[[Page 34226]]

Assistant Administrator for Procurement, National Aeronautics and 
Space Administration.
[FR Doc. 04-13617 Filed 6-17-04; 8:45 am]
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