[Federal Register Volume 81, Number 135 (Thursday, July 14, 2016)]
[Rules and Regulations]
[Pages 45831-45833]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-16244]

[[Page 45831]]

Vol. 81


No. 135

July 14, 2016

Part IV

Department of Defense


General Services Administration


National Aeronautics and Space Administration


48 CFR Chapter 1

Federal Acquisition Regulation; Federal Acquisition Circular 2005-89; 
Introduction, Small Business Improvements, OMB Circular Citation 
Update, FPI Blanket Waiver, Revision to Standard Forms for Bonds, 
Technical Amendments, and Federal Acquisition Circular 2005-89; Small 
Entity Compliance Guide; Final Rules

Federal Register / Vol. 81 , No. 135 / Thursday, July 14, 2016 / 
Rules and Regulations

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48 CFR Chapter 1

[Docket No. FAR 2016-0051, Sequence No. 3]

Federal Acquisition Regulation; Federal Acquisition Circular 
2005-89; Introduction

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

ACTION: Summary presentation of final rules.


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) 2005-89. 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 see the separate documents, which follow.

FOR FURTHER INFORMATION CONTACT: The analyst whose name appears in the 
table below in relation to the FAR case. Please cite FAC 2005-89 and 
the specific FAR case number. For information pertaining to status or 
publication schedules, contact the Regulatory Secretariat Division at 

                                           Rules Listed in FAC 2005-89
              Item                            Subject                 FAR Case                Analyst
I...............................  Small Business Subcontracting          2014-003  Uddowla.
II..............................   OMB Circular Citation Update..        2014-023  Hopkins.
III.............................   FPI Blanket Waiver Threshold..        2016-008  Uddowla.
IV..............................   Revision to Standard Forms for        2015-025  Hopkins.
V...............................  Technical Amendments...........

SUPPLEMENTARY INFORMATION: Summaries for each FAR rule follow. For the 
actual revisions and/or amendments made by these rules, refer to the 
specific item numbers and subjects set forth in the documents following 
these item summaries. FAC 2005-89 amends the FAR as follows:

Item I--Small Business Subcontracting Improvements (FAR Case 2014-003)

    This final rule amends the FAR to implement SBA's final rule 
published at 78 FR 42391 on July 16, 2013. The rule will implement the 
statutory requirements set forth in section 1321 and 1322 of the Small 
Business Jobs Act of 2010, (Pub. L. 111-240), as well as other 
requirements aimed at improving subcontracting regulations to increase 
small business opportunities. This rule accomplishes the following:
    (1) Requires prime contractors to make good faith efforts to 
utilize their proposed small business subcontractors during performance 
of a contract to the same degree the prime contractor relied on the 
small business in preparing and submitting its bid or proposal. To the 
extent a prime contractor is unable to make a good faith effort to 
utilize its small business subcontractors as described above, the prime 
contractor is required to explain, in writing, within 30 days of 
contract completion, to the contracting officer the reasons why it was 
unable to do so.
    (2) Authorizes contracting officers to calculate subcontracting 
goals in terms of total contract dollars in addition to the required 
goals in terms of total subcontracted dollars.
    (3) Provides contracting officers with the discretion to require a 
subcontracting plan in instances where a small business rerepresents 
its size as an other than small business.
    (4) Requires subcontracting plans even for modifications under the 
subcontracting plan threshold if said modifications would cause the 
contract to exceed the plan threshold.
    (5) Requires prime contractors to assign (North American Industry 
Classification System (NAICS)) codes to subcontracts.
    (6) Restricts prime contractors from prohibiting a subcontractor 
from discussing payment or utilization matters with the contracting 
    (7) Requires prime contractors to resubmit a corrected 
subcontracting report within 30 days of receiving the contracting 
officer's notice of report rejection.
    (8) Requires prime contractors to provide the socioeconomic status 
of the subcontractor in the notification to unsuccessful offerors for 
    (9) Requires prime contracts with subcontracting plans on task and 
delivery order contracts to report order level subcontracting 
information after November 2017.
    (10) Facilitates funding agencies receiving small business 
subcontracting credit.
    (11) On indefinite-delivery, indefinite-quantity contracts, allows 
the contracting officer to establish subcontracting goals at the order 
level (but not a new subcontracting plan).
    This rule may have a positive economic impact on any small business 
entity that wishes to participate in the Federal procurement arena as a 

Item II--OMB Circular Citation Update (FAR Case 2014-023)

    This final rule amends the FAR to update outdated OMB Circular 
citation references. On December 26, 2013, the Office of Management and 
Budget (OMB) published new guidance at 2 CFR part 200 entitled Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements 
for Federal Awards, adopted by Federal agencies as a set of binding 
regulations that became effective December 26, 2014. This new guidance 
supersedes and streamlines requirements from OMB Circulars A-21, A-87, 
A-89, A-102, A-110, A-122, and A-133, as well as the guidance in 
Circular A-50 on Audit Followup. As such, this final rule replaces OMB 
citations in the FAR to the circulars cited above that have been 
superseded. The replacement of these outdated OMB citations in the FAR 
will have no impact on small businesses since the intent of the OMB 
guidance remains unchanged.

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Item III--FPI Blanket Waiver Threshold (FAR Case 2016-008)

    This final rule amends the FAR to increase the blanket waiver 
threshold for small dollar-value purchases from Federal Prison 
Industries (FPI) by Federal agencies from $3,000 to $3,500. No waiver 
is required to buy from an alternative source below $3,500. Customers 
may, however, still purchase from FPI at, or below, this threshold, if 
they so choose.

Item IV--Revision to Standard Forms for Bonds (FAR Case 2015-025)

    This rule amends the FAR to revise five Standard Forms prescribed 
for contracts involving bonds and other financial protections. The 
revisions, aimed at clarifying liability limitations and expanding the 
options for organization types, are made to Standard Forms 24, 25, 25A, 
34, and 35. These changes will minimize questions from industry to the 
contracting officer.
    This final rule does not place any new requirements on small 

Item V--Technical Amendments

    Editorial changes are made at FAR 4.1801, 4.1803, 52.204-16, 
52.204-17, 52.204-18, 52.204-20, and 52.212-3.

    Dated: June 30, 2016.
William Clark,
Director, Office of Government-wide Acquisition Policy, Office of 
Acquisition Policy, Office of Government-wide Policy.
    Federal Acquisition Circular (FAC) 2005-89 is issued under the 
authority of the Secretary of Defense, the Administrator of General 
Services, and the Administrator for the National Aeronautics and Space 
    Unless otherwise specified, all Federal Acquisition Regulation 
(FAR) and other directive material contained in FAC 2005-89 is 
effective July 14, 2016 except for item I which is effective November 
1, 2016, and items II, III, and IV, which are effective August 15, 

    Dated: July 1, 2016.
Claire M. Grady,
Director, Defense Procurement and Acquisition Policy
    Dated: July 1, 2016.
Jeffrey A. Koses,
Senior Procurement Executive/Deputy CAO, Office of Acquisition Policy, 
U.S. General Services Administration.
    Dated: June 29, 2016.
William G. Roets,
Acting Assistant Administrator, Office of Procurement National 
Aeronautics and Space Administration.
[FR Doc. 2016-16244 Filed 7-13-16; 8:45 am]