[Federal Register Volume 75, Number 115 (Wednesday, June 16, 2010)]
[Rules and Regulations]
[Pages 34256-34258]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-14184]



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Part IV





Department of Defense





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General Services Administration





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National Aeronautics and Space Administration





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48 CFR Chapter 1, et al.



Federal Acquisition Regulation; Final Rules

  Federal Register / Vol. 75, No. 115 / Wednesday, June 16, 2010 / 
Rules and Regulations  

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1

[Docket FAR 2010-0076, Sequence 4]


Federal Acquisition Regulation; Federal Acquisition Circular 
2005-42; Introduction

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

ACTION: Summary presentation of 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 (Councils) in this Federal 
Acquisition Circular (FAC) 2005-42. 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.regulations.gov.

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

FOR FURTHER INFORMATION CONTACT: The analyst whose name appears in the 
table below in relation to each FAR Case. Please cite FAC 2005-42 and 
the specific FAR Case numbers. For information pertaining to status or 
publication schedules, contact the FAR Secretariat at (202) 501-4755.

                                          List of Rules in FAC 2005-42
----------------------------------------------------------------------------------------------------------------
    Item                      Subject                        FAR case             Analyst
----------------------------------------------------------------------------------------------
I..........  American Recovery and Reinvestment Act     2009-012            Parnell.
              (the RecoveryAct) of 2009--Whistleblower
              Protections.
II.........  Electronic Subcontracting Reporting        2005-040            Cundiff.
              System (eSRS).
III........  American Recovery and Reinvestment Act of  2009-010            Jackson.
              2009 (the Recovery Act)--Publicizing
              Contract Actions.
IV.........  Public Disclosure of Justification and     2008-003            Woodson.
              Approval Documents for Noncompetitive
              Contracts--Section 844 of the National
              Defense Authorization Act for Fiscal
              Year 2008.
V..........  Additional Requirements for Market         2008-007            Blankenship.
              Research (Interim).
VI.........  American Recovery and Reinvestment Act of  2009-011            Chambers.
              2009 (Recovery Act)--GAO/IG Access.
VII........  New Designated Country--Taiwan...........  2009-014            Sakalos.
VIII.......  Nonavailable Articles....................  2009-013            Davis.
IX.........  Disclosure and Consistency of Cost         2009-025            Chambers.
              Accounting Practices for Contracts
              Awarded to Foreign Concerns (Interim).
X..........  Compensation for Personal Services         2009-026            Chambers.
              (Interim).
XI.........  Payrolls and Basic Records (Interim).....  2009-018            Woodson.
XII........  Technical Amendments.....................
----------------------------------------------------------------------------------------------------------------


SUPPLEMENTARY INFORMATION: Summaries for each FAR rule follow. For the 
actual revisions and/or amendments made by these FAR cases, refer to 
the specific item number and subject set forth in the documents 
following these item summaries.
    FAC 2005-42 amends the FAR as specified below:

Item I--American Recovery and Reinvestment Act (the Recovery Act) of 
2009--Whistleblower Protections (FAR Case 2009-012)

    This rule adopts as final, with changes, an interim rule published 
in the Federal Register at 74 FR 14633 on March 31, 2009, amending the 
FAR to implement the American Recovery and Reinvestment Act of 2009 
(the Recovery Act) with respect to section 1553 of Division A, 
Protecting State and Local Government and Contractor Whistleblowers. 
This rule prohibits non-Federal employers from discharging, demoting, 
or discriminating against an employee as a reprisal for disclosing 
information.

Item II--Electronic Subcontracting Reporting System (eSRS)(FAR Case 
2005-040)

    This rule amends the Federal Acquisition Regulation (FAR) to adopt 
as final, with changes, an interim FAR rule published in the Federal 
Register at 73 FR 21779 on April 22, 2008, amending the FAR to 
implement the use of the Electronic Subcontracting Reporting System 
(eSRS) to fulfill small business subcontracting reporting requirements. 
The eSRS, a web-based system, replaces the Standard Forms 294 and 295 
as the mechanism for submitting reports required by the small business 
subcontracting program. In addition, this rule adds a new Alternate III 
to FAR clause 52.219-9 to recognize that there is a circumstance under 
which contractors will need to use SF 294, rather than eSRS, to submit 
an Individual Subcontract Report. The contractor will use SF 294 if a 
contract is not reported in the Federal Procurement Data System because 
reporting it in that system may disclose information that would 
compromise national security.

Item III--American Recovery and Reinvestment Act of 2009 (the Recovery 
Act)--Publicizing Contract Actions (FAR Case 2009-010)

    This rule adopts as final, with minor changes, the interim rule 
published in the Federal Register at 74 FR 14636 on March 31, 2009. The 
interim rule amended the FAR to implement section 6.2 of the Office of 
Management and Budget (OMB) Memorandum M-09-10, dated February 18, 
2009, entitled ``Initial Implementing Guidance for the American 
Recovery and Reinvestment Act of 2009'' (the Recovery Act). Section 6.2 
of the OMB guidance mandates accountability and transparency relative 
to publicizing contract actions. The OMB guidance requires that the FAR 
be amended to reflect--
    1. Unique requirements for posting of pre-solicitation notices;
    2. Unique requirements for announcing contract awards;
    3. Unique requirements for entering awards into the Federal 
Procurement Data System (FPDS); and
    4. Unique requirements for actions that are not fixed-price or 
competitive.
    OMB Memorandum M-09-15, dated April 3, 2009, entitled ``Updated

[[Page 34257]]

Implementing Guidance for the American Recovery and Reinvestment Act of 
2009,'' supplements, amends, and clarifies the initial guidance in OMB 
Memorandum M-09-10. The final rule makes the following amendments:
     FAR 5.704(a)(2) to clarify that modifications of orders 
are not required to be publicized at the preaward stage.
     FAR 5.704(b) to require contracting officers to identify 
proposed contract actions, funded in whole or in part by the Recovery 
Act, by using the instructions that are at FAR 5.704(b) and available 
in the Recovery FAQs at the GPE https://www.fedbizopps.gov.
     FAR 5.704(c) and 5.705(a) to ensure that the description 
required by FAR 5.207(a)(16) clearly defines the elements of the 
requirement to the general public.
    FAR 5.705(b) to require contracting officers to include in 
the description of the contract action a statement specifically noting 
if the action was not awarded competitively, or was not fixed-price, or 
was neither competitive nor fixed-price.

Item IV--Public Disclosure of Justification and Approval Documents for 
Noncompetitive Contracts--Section 844 of the National Defense 
Authorization Act for Fiscal Year 2008 (FAR Case 2008-003)

    This final rule adopts, with changes, an interim rule published in 
the Federal Register at 74 FR 2731 on January 15, 2009. The rule amends 
the FAR to implement the requirements of Section 844 of the National 
Defense Authorization Act for Fiscal Year 2008. The interim rule 
required the head of an executive agency to make certain justification 
and approval documents relating to the use of noncompetitive procedures 
in Federal contracting be posted on the website of an agency and 
through FedBizOpps. The final rule requires that if the justification 
is a brand name justification under FAR 6.302-1(c) then it must be 
posted with the solicitation. Justifications must remain posted for a 
minimum of 30 days. The final rule clarifies that posting the 
justification does not apply if it would disclose the executive 
agency's needs and disclosure of such needs would compromise national 
security or create other security risks. The final rule also 
establishes procedures at FAR 13.501 similar to procedures at FAR 
6.305. The rule is intended to enhance competition in Federal 
contracting and provide greater transparency to the taxpayer.

Item V--Additional Requirements for Market Research (FAR Case 2008-007) 
(Interim)

    This interim rule amends the FAR at parts 10, 44, and 52 by adding 
market research requirements. This change implements Section 826 of 
Pub. L. 110-181, the National Defense Authorization Act for Fiscal Year 
2008 (FY08 NDAA). As a matter of policy, this provision of law is 
applied to contracts awarded by all executive agencies. This rule 
requires that market research must be accomplished before an agency 
places an indefinite-delivery/indefinite-quantity (ID/IQ) task or 
delivery order in excess of the simplified acquisition threshold. In 
addition, a prime contractor with a contract in excess of $5 million 
for the procurement of items other than commercial items is required to 
conduct market research before making purchases that exceed the 
simplified acquisition threshold when the contractor is acting as a 
purchasing agent for the Government. This interim rule is applicable to 
any solicitations issued and contracts (to include any subcontracts 
issued under such contracts) awarded on or after the effective date of 
the rule.

Item VI--American Recovery and Reinvestment Act of 2009 (Recovery 
Act)--GAO/IG Access (FAR Case 2009-011)

    This final rule adopts, with changes, the interim rule published in 
the Federal Register at 74 FR 14646 on March 31, 2009. This final rule 
amends the FAR to implement sections 902, 1514, and 1515 of the 
American Recovery and Reinvestment Act of 2009 (Recovery Act). 
Collectively, these sections provide for the audit and review of both 
contracts and subcontracts, and the ability to interview such 
contractor and subcontractor personnel under contracts containing 
Recovery Act funds.
    These Recovery Act provisions are implemented in new alternate 
clauses to FAR 52.212-5 ``Contract Terms and Conditions Required to 
Implement Statutes or Executive Orders--Commercial Items'' and FAR 
52.214-26 ``Audit and Records--Sealed Bidding,'' and by amending FAR 
52.215-2 ``Audit and Records--Negotiation.'' For the Comptroller 
General, these alternate clauses provide specific authority to audit 
contracts and subcontracts and to interview contractor and 
subcontractor employees under contracts using Recovery Act funds. 
Agency Inspector Generals receive the same authorities, with the 
exception of interviewing subcontractor employees.
    The changes to the interim rule clarify its application to 
supplemental agreements, and orders under task- or delivery-order 
contracts, involving Recovery Act funds.

Item VII--New Designated Country--Taiwan (FAR Case 2009-014)

    This final rule adopts as final, without change, an interim rule 
implementing the designation of Taiwan under the World Trade 
Organization Agreement on Government Procurement, which took effect on 
July 15, 2009. This FAR change allows contracting officers to purchase 
goods and services made in Taiwan without application of the Buy 
American Act if the acquisition is covered by the World Trade 
Organization Agreement on Government Procurement.

Item VIII--Nonavailable Articles (FAR Case 2009-013)

    This final rule amends FAR 25.104(a) to add certain 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 IX--Disclosure and Consistency of Cost Accounting Practices for 
Contracts Awarded to Foreign Concerns (FAR Case 2009-025) (Interim)

    This interim rule amends the FAR to align the existing FAR clause 
52.230-4 with the changes made in Cost Accounting Standards (CAS) Board 
clause, Disclosure and Consistency of Cost Accounting Practices--
Foreign Concerns.
    On March 26, 2008, the CAS Board published, without change from the 
proposed rule (72 FR 32829, June 14, 2007), a final rule in the Federal 
Register at 73 FR 15939 to utilize the clause, Disclosure and 
Consistency of Cost Accounting Practices--Foreign Concerns, in CAS-
covered contracts and subcontracts awarded to foreign concerns. This 
rule is necessary in order to maintain consistency between CAS and FAR 
in matters relating to the administration of CAS.

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Item X--Compensation for Personal Services (FAR Case 2009-026) 
(Interim)

    This interim rule amends the FAR to align the existing FAR 
31.205(q)(2)(i) and (ii) with the changes made in Cost Accounting 
Standards (CAS) Board Standards 412, ``Cost Accounting Standard for 
composition and measurement of pension cost,'' and 415, ``Accounting 
for the cost of deferred compensation.'' Formerly, the applicable CAS 
standard for measuring, assigning, and allocating the costs of Employee 
Stock Ownership Plans (ESOPs) depended on whether the ESOP met the 
definition of a pension plan at FAR 31.001. Costs for ESOPs meeting the 
definition of a pension plan at FAR 31.001 were covered by CAS 412, 
while the costs for ESOPs not meeting the definition of a pension plan 
at FAR 31.001 were covered by CAS 415. Now, regardless of whether an 
ESOP meets the definitions of a pension plan at FAR 31.001, all costs 
of ESOPs are covered by CAS 415.

Item XI--Payrolls and Basic Records (FAR Case 2009-018) (Interim)

    This interim rule implements changes that the Department of Labor 
(DOL) instituted regarding the submission of payroll data in their 
final rule, Protecting the Privacy of Workers: Labor Standards 
Provisions Applicable to Contracts Covering Federally Financed and 
Assisted Construction, published in the Federal Register at 73 FR 77504 
on December 19, 2008. The rule revises FAR 52.222-8, Payrolls and Basic 
Records, to delete the requirement for submission of full social 
security numbers and home addresses of individual workers, prime 
contractor, on weekly payroll transmittals as required on covered 
construction contracts. The rule requires contractors and 
subcontractors to maintain the full social security number and current 
address of each covered worker, and shall provide them upon request to 
the contracting officer, the contractor, or the Wage and Hour Division 
of the DOL for purposes of an investigation or audit of compliance with 
prevailing wage requirements. The rule recognizes DOL's finding that 
complete social security numbers and home addresses for individual 
workers is personal information to the worker and that any unnecessary 
disclosure and submittal of such information creates an exposure to 
identity theft and the invasion of privacy for workers.

Item XII--Technical Amendments

    Editorial changes have been made at FAR 31.205-6, 31.205-16, 
49.505, and 52.222-34.

    Dated: June 2, 2010.
Edward Loeb,
Acting Director, Acquisition Policy Division.

Federal Acquisition Circular

    Federal Acquisition Circular (FAC) 2005-42 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 2005-42 is 
effective June 16, 2010, except for Items II, III, IV, VI, and VIII 
which are effective July 16, 2010.

    Dated: June 8, 2010.
Shay D. Assad,
Director, Defense Procurement and Acquisition Policy.

    Dated: June 2, 2010.
Edward Loeb,
Acting Senior Procurement Executive, Office of Acquisition Policy, U.S. 
General Services Administration.

    Dated: June 3, 2010.
William P. McNally,
Assistant Administrator for Procurement, National Aeronautics and Space 
Administration.
[FR Doc. 2010-14184 Filed 6-15-10; 8:45 am]
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