[Federal Register Volume 71, Number 1 (Tuesday, January 3, 2006)]
[Rules and Regulations]
[Pages 198-200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-24545]



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Part III

Department of Defense

General Services Administration

National Aeronautics and Space Administration
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48 CFR Chapter 1 et al.



Federal Acquisition Regulations; Final Rules and Interm Rules

  Federal Register / Vol. 71, No. 1 / Tuesday, January 3, 2006 / 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 2005-07; 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, and technical 
amendments.

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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) 2005-07. 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: 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 2005-07 and specific FAR case 
number(s). Interested parties may also visit our Web site at http://www.acqnet.gov/far. For information pertaining to status or publication 
schedules, contact the FAR Secretariat at (202) 501-4755.

 
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    Item                      Subject                        FAR case           FAR Analyst
----------------------------------------------------------------------------------------------
I..........  Transportation: Standard Industry          2002-005            Parnell.
              Practices.
II.........  Common Identification Standard for         2005-015            Jackson.
              Contractors(Interim).
III........  Change to Performance-based Acquisition..  2003-018            Jackson.
IV.........  Free Trade Agreements-Australia and        2004-027            Marshall.
              Morocco.
V..........  Deletion of the Very Small Business Pilot  2005-013            Cundiff.
              Program.
VI.........  Purchases From Federal Prison Industries-  2003-023            Nelson.
              Requirement for MarketResearch.
VII........  Exception from Buy American Act for        2005-022            Marshall.
              CommercialInformation Technology
              (Interim).
VIII.......  Removal of Sanctions Against Libya.......  2005-026            Marshall.
IX.........  Elimination of Certain Subcontract         2003-024            Cundiff.
              NotificationRequirements.
X..........  Annual Representations and Certifications- 2005-006            Zaffos.
              NAICSCode/Size.
XI.........  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 2005-07 amends the FAR as specified below:

Item I--Transportation: Standard Industry Practices (FAR Case 2002-005)

    This final rule amends FAR Parts 1, 42, 46, 47, 52, and 53 to 
clarify and update the FAR coverage to reflect the latest changes to 
the Federal Management Regulation and statutes that require use of 
commercial bills of lading for domestic shipments. This final rule 
amends the FAR to--
     Move FAR Subpart 42.14, Traffic and Transportation 
Management, to FAR Part 47, Transportation;
     Delete the clauses at FAR 52.242-10 and FAR 52.242-11 and 
revise and relocate FAR clause 52.242-12 to FAR 52.247-68;
     Add definitions of ``bill of lading,'' ``commercial bill 
of lading,'' and ``Government bill of lading'' and clarify the usage of 
each term throughout FAR Part 47;
     Add definitions of ``Government rate tenders,'' 
``household goods,'' ``noncontiguous domestic trade,'' and ``released 
or declared value'';
     Require the use of commercial bills of lading for domestic 
shipments;
     Revise the references to ``49 U.S.C. 10721'' to read ``49 
U.S.C. 10721 and 13712'' throughout FAR Part 47 to make it clear that 
Government rate tenders can be used in certain situations for the 
transportation of household goods by rail carrier (authorized by 49 
U.S.C. 10721), as well as by motor carrier, water carrier, and freight 
forwarder (authorized by 49 U.S.C. 13712 and the definition of 
``carrier'' at 49 U.S.C. 13102); and
     Update the fact that the Federal Motor Carrier Safety 
Administration prescribes commercial zones at 49 CFR 372 Subpart B.

Item II--Common Identification Standard for Contractors (FAR Case 2005-
015)

    This interim rule amends the FAR by addressing the contractor 
personal identification requirements in Homeland Security Presidential 
Directive (HSPD-12), ``Policy for a Common Identification Standard for 
Federal Employees and Contractors,'' and Federal Information Processing 
Standards Publication (FIPS PUB) Number 201, ``Personal Identity 
Verification (PIV) of Federal Employees and Contractors.'' The primary 
objectives of HSPD-12 are to establish a process to enhance security, 
increase Government efficiency, reduce identity fraud, and protect 
personal privacy by establishing a mandatory, Governmentwide standard 
for secure and reliable forms of identification issued by the Federal 
Government to its employees and contractors.

Item III--Change to Performance-based Acquisition (FAR Case 2003-018)

    This final rule amends the FAR by changing the terms ``performance-
based contracting (PBC)'' and ``performance-based service contracting 
(PBSC)'' to ``performance-based acquisition (PBA)'' throughout the FAR; 
adding applicable PBA definitions of ``Performance Work Statement 
(PWS)'' and ``Statement of Objectives (SOO)'', and describing their 
uses; clarifying the order of precedence for requirements; eliminating 
redundancy where found; modifying the regulation to broaden the scope 
of PBA and give agencies more flexibility in applying PBA methods to 
contracts and orders of varying complexity; and reducing the burden of 
force-fitting contracts and orders into PBA, when it is not 
appropriate.

Item IV--Free Trade Agreements--Australia and Morocco (FAR Case 2004-
027)

    This final rule converts the interim rule published at 69 FR 77870,

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December 28, 2004, to a final rule with changes. It allows contracting 
officers to purchase the products of Australia without application of 
the Buy American Act if the acquisition is subject to the Free Trade 
Agreements. The U.S. Trade Representative negotiated Free Trade 
Agreements with Australia and Morocco, which were scheduled to go into 
effect on or after January 1, 2005, according to Public Laws 108-286 
and 108-302. However, the Morocco Free Trade Agreement has not yet 
entered into force and, therefore, the implementation of the Morocco 
Free Trade Agreement has been removed from the final rule. The 
Australian Free Trade Agreement joins the North American Free Trade 
Agreement (NAFTA) and the Chile and Singapore Free Trade Agreements 
which are already in the FAR. The threshold for applicability of the 
Australian Free Trade Agreement is $58,550 (the same as other Free 
Trade Agreements to date).

Item V--Deletion of the Very Small Business Pilot Program (FAR Case 
2005-013)

    This final rule amends the FAR to delete the Very Small Business 
Pilot Program. Under the pilot program, contracting officers were 
required to set-aside for very small business concerns certain 
acquisitions with an anticipated dollar value between $2,500 and 
$50,000. The Councils are removing the FAR coverage because the 
legislative authority for the program terminated on September 30, 2003. 
Acquisitions previously set aside for pilot program vendors will now be 
open to other small businesses.

Item VI--Purchases From Federal Prison Industries-Requirement for 
Market Research (FAR Case 2003-023)

    This final rule converts the interim rule published in FAC 2001-21 
at 69 FR 16148, March 26, 2004, and the interim rule published as Item 
I of FAC 2005-03 at 70 FR 18954, April 11, 2005, to a final rule with 
amendments at FAR 8.602 to clarify the applicability of the rule. The 
rule implements Section 637 of Division H of the Consolidated 
Appropriations Act, 2005. Section 637 provides that no funds made 
available under the Consolidated Appropriations Act for fiscal year 
2005, or under any other Act for fiscal year 2005 and each fiscal year 
thereafter, shall be expended for purchase of a product or service 
offered by Federal Prison Industries, Inc., unless the agency making 
the purchase determines that the offered product or service provides 
the best value to the buying agency, pursuant to Governmentwide 
procurement regulations issued pursuant to 41 U.S.C. 421(c)(1) that 
impose procedures, standards, and limitations of 10 U.S.C. 2410n.

Item VII--Exception from Buy American Act for Commercial Information 
Technology (FAR Case 2005-022)

    This interim rule amends FAR 25.103 and FAR Subpart 25.11 to 
implement Section 517 of Division H, Title V of the Consolidated 
Appropriations Act, 2005 (Pub. L. 108-447). Section 517 authorizes 
exemption from the Buy American Act for acquisitions of information 
technology that are commercial items. This applies only to the use of 
FY 2005 funds. This same exemption appeared last year in section 535(a) 
of Division F, Title V, Consolidated Appropriations Act, 2004 (Pub. L. 
108-199). The FY 04 exemption was implemented through deviations by the 
individual agencies.
    The interim rule is based on the estimation that the exemption of 
commercial information technology is likely to continue. If the 
exception does not appear in a future appropriations act, a prompt 
change to the FAR will be made to limit applicability of the exemption 
to the fiscal years to which it applies. The effect of this exemption 
is that the following clauses are no longer applicable in acquisition 
of commercial information technology:
     FAR 52.225-1, Buy American Act--Supplies.
     FAR 52.225-2, Buy American Act Certificate.
     FAR 52.225-3, Buy American Act--Free Trade Agreements--
Israeli Trade Act.
     FAR 52.225-4, Buy American Act--Free Trade Agreements--
Israeli Trade Act Certificate.
    This is because the Buy American Act no longer applies; and the 
Free Trade Agreement non-discriminatory provisions are no longer 
necessary, since all products now are treated without the restrictions 
of the Buy American Act.

Item VIII--Removal of Sanctions Against Libya (FAR Case 2005-026)

    This final rule removes Libya from the list of prohibited sources 
at FAR Subpart 25.7 and the associated clause at 52.225-13, Restriction 
on Certain Foreign Purchases. Acquisitions of products from Libya may 
still be subject to restrictions of the Buy American Act, trade 
agreements, or other domestic source restrictions. The Department of 
State has not yet removed Libya from the list of state sponsors of 
terrorism.

Item IX--Elimination of Certain Subcontract Notification Requirements 
(FAR Case 2003-024)

    This final rule converts, with minor changes, the Federal 
Acquisition Regulation (FAR) interim rule published in the Federal 
Register at 70 FR 11761, March 9, 2005. The rule impacts contractors 
with Department of Defense (DoD), National Aeronautics and Space 
Administration (NASA), or Coast Guard cost-reimbursement contracts and 
Government personnel who award and administer those contracts. The 
interim rule amended FAR 44.201-2, Advance Notification Requirements, 
and 52.244-2, Subcontracts, to implement Section 842 of the National 
Defense Authorization Act for Fiscal Year 2004, in Public Law 108-136. 
Section 842 removed the requirement under cost-reimbursement contracts 
with DoD, Coast Guard, and NASA for contractors to notify the agency 
before the award of any cost-plus-fixed-fee subcontract or any fixed-
price subcontract that exceeds the greater of the simplified 
acquisition threshold or 5 percent of the total estimated cost of the 
contract if the contractor maintains a purchasing system approved by 
the contracting officer for the contract. The final rule makes two 
changes that resulted from one of the public comments. The final rule 
deletes Alternate I from FAR 44.204, Contract clauses for the 
Department of Defense, the Coast Guard, and the National Aeronautics 
and Space Administration, and deletes the current Alternate I from 
52.244-2, Subcontracts.

Item X--Annual Representations and Certifications--NAICS Code/Size (FAR 
Case 2005-006)

    This final rule amends the FAR provision at 52.204-8 to provide a 
place for contracting officers to inform prospective offerors of the 
NAICS code and small business size standard applicable to the 
procurement.

Item XI--Technical Amendments

    Editorial changes are made at FAR 9.203(b)(2), 11.102, 11.201(a), 
11.201(b), 11.201(d)(2), 11.201(d)(3), 11.201(d)(4), 11.204(b), 
25.1101(e)(2), and the provisions at 52.211-2 and 52.212-1 in order to 
update references.
    The authority citation for FAR parts 27, 34, 38, 39, 43, 46, 48, 
and 50 is revised.

    Dated: December 22, 2005.
Gerald Zaffos,
Director, Contract Policy Division.

Federal Acquisition Circular

    Federal Acquisition Circular (FAC) 2005-07 is issued under the 
authority of

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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 2005-07 is 
effective February 2, 2006 except for Items II, IV, V, VI, VII, IX, X 
and XI which are effective January 3, 2006

    Dated: December 21, 2005.
Domenic C. Cipicchio,
Acting Director, Defense Procurement and Acquisition Policy.

    Dated: December 16, 2005.
Roger D. Waldron,
Acting Senior Procurement Executive, Office of the Chief Acquisition 
Officer, General Services Administration.

    Dated: December 14, 2005.
Tom Luedtke,
Assistant Administrator for Procurement, National Aeronautics and Space 
Administration.
[FR Doc. 05-24545 Filed 12-30-05; 8:45 am]
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