[Federal Register Volume 69, Number 243 (Monday, December 20, 2004)]
[Rules and Regulations]
[Pages 76350-76352]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-27635]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 12, 13, and 15

[FAC 2001-26; FAR Case 2003-022; Item III]
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: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed to convert the 
interim rule published in the Federal Register at 69 FR 8312, February 
23, 2004, to a final rule with changes. The rule amends the Federal 
Acquisition Regulation (FAR) to implement the special emergency 
procurement authorities of Section 1443 of the Services Acquisition 
Reform Act of 2003 (Pub. L. 108-136, Title XIV, codified at 41 U.S.C. 
428a), and section 822 of the Ronald W. Reagan National Defense 
Authorization Act for Fiscal Year 2005.
    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 822 of 
the Fiscal Year 2005 Defense Authorization Act further increased the 
threshold amounts for any contract to be awarded and performed, or 
purchases to be made, outside the United States.
    Also, under section 1443, 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:January 19, 2005.

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 2001-26, FAR case 2003-022.

SUPPLEMENTARY INFORMATION:

A. Background

    This final rule implements Section 1443 of the Services Acquisition 
Reform Act of 2003 (SARA) (41 U.S.C. 428a) and section 822 of the 
Ronald W. Reagan National Defense Authorization Act for Fiscal Year 
2005. 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. Section 822 authorized a higher micro-purchase and 
simplified acquisition threshold for any contract to be awarded and 
performed, or purchases to be made, outside the United States, for the 
same purposes as authorized under section 1443 of SARA.
    DoD, GSA, and NASA published an interim rule in the Federal 
Register at 69 FR 8312, February 23, 2004. The 60-day comment period 
for the interim rule ended April 23, 2004. Three comments were 
received; they are addressed below. Section 822 of the Fiscal Year 2005 
Defense Authorization Act was enacted after publication of the interim 
rule. As a result, this final rule incorporates the increased 
thresholds provided by section 822.
    One commenter recommended that the Councils seek a Governmentwide 
waiver from the Secretary of Labor from application of FAR clauses 
52.222-26, Equal Opportunity, and 52.222-36, Affirmative Action for 
Workers With Disabilities, so that the purchase card could be used 
without having to also issue a purchase order with these clauses. The 
final rule does not adopt this suggestion because the FAR already 
authorizes the agency head to waive the inclusion of these clauses when 
deemed to be in the interest of national security (FAR 22.807(a)(1) and 
22.1403(b), respectively).
    The same commenter suggested that the final rule address the fact 
that the Service Contract Act requires clauses in all service contracts 
above $2,500. The final rule does not adopt this suggestion because 
neither SARA nor the Fiscal Year 2005 Defense Authorization Act 
suggested that these acquisitions are exempt from statutory 
requirements.
    Another commenter questioned why the interim rule did not include 
contingency operations in the increased limitation on use of simplified 
acquisition procedures, as authorized by Section 1443. The final rule 
has been amended to include the procurement of commercial supplies and 
services in support of contingency operations in the increased 
limitation on use of simplified acquisition procedures. However, 
services and supplies procured in support of a contingency operation 
must meet the definition of a commercial item in FAR 2.101 for the 
increased limitation to apply.
    This is not a significant regulatory action and, therefore, is 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

    This final rule 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 limitations are limited to procurements that are entered into 
in support of 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.
    This final rule does not impose any data collection requirements on 
small business concerns. The rule does not duplicate, overlap, or 
conflict with other relevant Federal rules. There is no significant 
alternative to the final rule that would accomplish the stated 
beneficial objective.
    The Councils prepared a Final Regulatory Flexibility Analysis 
(FRFA) as follows:
    1. Description of the reasons why action by the agency is being 
considered. This final rule revises the Federal Acquisition 
Regulation (FAR) in order to implement

[[Page 76351]]

Section 1443 of the Services Acquisition Reform Act of 2003 (41 
U.S.C. 428a) and section 822 of the Ronald W. Reagan National 
Defense Authorization Act for Fiscal Year 2005. 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. Section 822 increases the micro-purchase 
threshold and simplified acquisition threshold for any contract to 
be awarded and performed, or purchases to be made, outside the 
United States.
    2. Succinct statement of the objectives of, and legal basis for, 
the final rule. This final rule implements Section 1443 of the 
Services Acquisition Reform Act of 2003 (41 U.S.C. 428a) and section 
822 of the Ronald W. Reagan National Defense Authorization Act for 
Fiscal Year 2005.
    3. Description of, and, where feasible, estimate of the number 
of small entities to which the final 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 final 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 (41 U.S.C. 428a). 
Section 822 of the Ronald W. Reagan National Defense Authorization 
Act for Fiscal Year 2005 is unlikely to affect small businesses in 
the United States as it applies outside the United States.
    4. Description of projected reporting, record keeping, and other 
compliance requirements of the final 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 final rule.
    5. Identification, to the extent practicable, of all relevant 
Federal rules which may duplicate, overlap, or conflict with the 
final rule. This rule does not duplicate, overlap, or conflict with 
other relevant Federal rules.
    6. Description of any significant alternatives to the final 
rule, which accomplish the stated objectives of applicable statutes 
and which minimize any significant economic impact of the final rule 
on small entities. There are no significant alternatives to the 
final 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 Final Regulatory 
Flexibility Analysis 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 subparts in accordance with 5 
U.S.C. 610. Interested parties must submit such comments separately and 
should cite 5 U.S.C. 601, et seq. (FAC 2001-26, 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.

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

    Government procurement.

    Dated: December 9, 2004.
Laura Auletta,
Director, Contract Policy Division.

Interim Rule Adopted as Final With Changes

0
Accordingly, DoD, GSA, and NASA adopt the interim rule amending 48 CFR 
parts 2, 10, 12, 13, 15, 19, and 25 which was published in the Federal 
Register at 69 FR 8312, February 23, 2004, as a final rule with the 
following changes:
0
1. The authority citation for 48 CFR parts 2, 12, 13, and 15 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)(2) by revising the definitions 
``Micro-purchase threshold'' and ``Simplified acquisition threshold'' 
to read as follows:


2.101  Definitions.

* * * * *
    (b) * * *
    (2) * * *
    Micro-purchase threshold means $2,500, except it means--
    (1) For construction subject to the Davis-Bacon Act, $2,000; and
    (2) 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 
(41 U.S.C. 428a)--
    (i) $15,000 in the case of any contract to be awarded and 
performed, or purchase to be made, inside the United States; and
    (ii) $25,000 in the case of any contract to be awarded and 
performed, or purchase to be made, outside the United States.
* * * * *
    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 (41 U.S.C. 428a), 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) $1 million for any contract to be awarded and performed, or 
purchase to be made, outside the United States.
* * * * *

PART 12--ACQUISITION OF COMMERCIAL ITEMS

0
3. 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 million ($10 million for 
acquisitions as described in 13.500(e)), 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
4. 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 million ($10 million for acquisitions as described in 
13.500(e)), including options. * * *
0
5. Amend section 13.003 by revising paragraphs (c)(1)(ii) and (g)(2) to 
read as follows:


13.003  Policy.

* * * * *
    (c)(1) * * *
    (ii) $5 million ($10 million for acquisitions as described in 
13.500(e)), including options, for acquisitions of commercial items 
using Subpart 13.5.
* * * * *
    (g) * * *
    (2) $5 million ($10 million for acquisitions as described in 
13.500(e)),

[[Page 76352]]

for commercial items, use any appropriate combination of the procedures 
in Parts 12, 13, 14, and 15 (see paragraph (d) of this section).
* * * * *
0
6. Amend section 13.201 by removing ``$15,000.'' from the end of 
paragraph (g)(1) and adding ``--'' in its place; and adding paragraphs 
(g)(1)(i) and (g)(1)(ii) to read as follows:


13.201  General.

* * * * *
    (g)(1) * * *
    (i) $15,000 in the case of any contract to be awarded and 
performed, or purchase to be made, inside the United States; and
    (ii) $25,000 in the case of any contract to be awarded and 
performed, or purchase to be made, outside the United States.
* * * * *
0
7. Amend section 13.303-5 by revising paragraph (b)(2) to read as 
follows:


13.303-5  Purchases under BPAs.

* * * * *
    (b) * * *
    (2) The limitation for individual purchases for commercial item 
acquisitions conducted under Subpart 13.5 is $5 million ($10 million 
for acquisitions as described in 13.500(e)).
* * * * *
0
8. Amend section 13.500 by revising the first sentence of paragraph 
(a); and adding paragraph (e) to read 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 
million ($10 million for acquisitions as described in 13.500(e)), 
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. * * *
* * * * *
    (e) Under 41 U.S.C. 428a, the simplified acquisition procedures 
authorized by this test program may be used for acquisitions that do 
not exceed $10 million when--
    (1) The acquisition is for commercial items 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 recovery from 
nuclear, biological, chemical, or radiological attack; or
    (2) The acquisition will be treated as an acquisition of commercial 
items in accordance with 12.102(f)(1).
0
9. Amend section 13.501 by revising paragraph (a)(1)(ii) to read as 
follows:


13.501  Special documentation requirements.

    (a) * * *
    (1) * * *
    (ii) Prepare sole source justifications using the format at 6.303-
2, modified to reflect an acquisition under the authority of the test 
program for commercial items (section 4202 of the Clinger-Cohen Act of 
1996) or the authority of the Services Acquisition Reform Act of 2003 
(41 U.S.C. 428a).
* * * * *

PART 15--CONTRACTING BY NEGOTIATION


15.403-1  [Amended]

0
10. Amend section 15.403-1 in paragraph (c)(3)(ii) by removing ``(Pub. 
L. 108-136, Sec. 1443)'' and adding ``(41 U.S.C. 428a)'' in its place.
[FR Doc. 04-27635 Filed 12-17-04; 8:45 am]
BILLING CODE 6820-EP-S