[Federal Register Volume 83, Number 190 (Monday, October 1, 2018)]
[Rules and Regulations]
[Pages 49302-49311]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-18984]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF VETERANS AFFAIRS

48 CFR Parts 801, 811, 832, 852, and 870

RIN 2900-AP81


VA Acquisition Regulation: Describing Agency Needs; Contract 
Financing

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Veterans Affairs (VA) is amending and 
updating its VA Acquisition Regulation (VAAR) in phased increments to 
revise or remove any policy superseded by changes in the Federal 
Acquisition Regulation (FAR), to remove procedural guidance internal to 
VA into the VA

[[Page 49303]]

Acquisition Manual (VAAM), and to incorporate any new agency specific 
regulations or policies. These changes seek to streamline and align the 
VAAR with the FAR and remove outdated and duplicative requirements and 
reduce burden on contractors. The VAAM incorporates portions of the 
removed VAAR as well as other internal agency acquisition policy. VA 
will rewrite certain parts of the VAAR and VAAM, and as VAAR parts are 
rewritten, we will publish them in the Federal Register. In particular, 
this rulemaking revises VAAR concerning Describing Agency Needs and 
Contract Financing, as well as affected parts covering the Department 
of Veterans Affairs Acquisition Regulation System, Solicitation 
Provisions and Contract Clauses, and Special Procurement Controls.

DATES: This rule is effective on October 31, 2018.

FOR FURTHER INFORMATION CONTACT: Mr. Rafael N. Taylor, Senior 
Procurement Analyst, Procurement Policy and Warrant Management 
Services, 003A2A, 425 I Street NW, Washington, DC 20001, (202) 382-
2787. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: On March 26, 2018, VA published a proposed 
rule in the Federal Register (83 FR 12922) which announced VA's intent 
to amend regulations for VAAR Case RIN 2900-AP81 (parts 811 and 832). 
In particular, this final rule revises part 811 to remove coverage of 
what brand name or equal purchase descriptions must include as the FAR 
provides sufficient coverage; removes coverage pertaining to brand 
names based on current FAR coverage; removes purchase description 
clauses; removes VAAR coverage of bid samples; removes the section 
providing coverage on procedures for negotiated procurements; removes 
VAAR coverage on ``items peculiar to one manufacturer.'' It revises 
part 832 to add policy to implement an OMB memorandum entitled 
``Accelerating Payments to Small Businesses for Goods and Services,'' 
to encourage making payments to small business contractors within 15 
days of receipt of invoice; delegates authority within VA to approve 
contract terms concerning advance payments; and removes subparts 832.5, 
Progress Payments Based on Costs and 832.8, Assignment of Claims, as 
both contain internal procedural guidance not having a significant 
effect beyond the internal operating procedures of VA.
    VA provided a 60-day comment period for the public to respond to 
the proposed rule. The comment period for the proposed rule ended on 
May 25, 2018 and VA received no comments. This document adopts as a 
final rule, the proposed rule published in the Federal Register on 
March 26, 2018, with minor stylistic and grammatical edits. This final 
rule has Federal Register administrative format changes in the 
amendatory text which make no substantive text changes at the affected 
sections.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal Governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. This final rule will have no such effect on 
State, local, and tribal Governments or on the private sector.

Paperwork Reduction Act

    This final rule imposes the following amended information 
collection requirements to two of the six existing information 
collection approval numbers associated with this rule. Although this 
action contains provisions constituting collections of information at 
48 CFR 852.236-82 and 852.236-83, under the provisions of the Paperwork 
Reduction Act (44 U.S.C. 3501-3521), no new proposed collections of 
information are associated with these clauses. The information 
collection requirements for 48 CFR 852.236-82 and 852.236-83 are 
currently approved by the Office of Management and Budget (OMB) and 
have been assigned OMB control number 2900-0422. However, this 
information collection was submitted to OMB to revise the title and to 
redesignate and renumber the two clauses currently numbered as sections 
852.236-82, Payments Under Fixed-Price Construction Contracts (Without 
NAS), and 852.236-83, Payments Under Fixed-Price Construction Contracts 
(Including NAS). Accordingly, they will reflect the new designation and 
revised titles as set forth in the amendatory language of the rule to 
read: 852.232-70, Payments Under Fixed-Price Construction Contracts 
(Without NAS-CPM), and 852.232-71, Payments Under Fixed-Price 
Construction Contracts (Including NAS-CPM), respectively, under the 
associated OMB control number 2900-0422. The references to the old 
numbers--852.236-82 and 852.236-83, are accordingly removed. There is 
no change in the information collection burden that is associated with 
this action. As required by the Paperwork Reduction Act of 1995 (at 44 
U.S.C. 3507(d)), VA has submitted these information collection 
amendments to OMB for its review. Notice of OMB approval for this 
information collection was published on Reginfo.gov on May 15, 2018.
    This final rule imposes the following amended information 
collection requirements to one of the six existing information 
collection approval numbers associated with this rule. Although this 
action contains provisions constituting collections of information at 
48 CFR 852.211-70, Service Data Manuals, under the provisions of the 
Paperwork Reduction Act (44 U.S.C. 3501-3521), no new proposed 
information collection is associated with this clause. The information 
collection requirement for 48 CFR 852.211-70 is currently approved by 
OMB and has been assigned OMB control number 2900-0587. However, this 
information collection has been submitted to OMB to revise the title 
from ``Service Data Manuals,'' to read, ``Equipment Operation and 
Maintenance Manuals.'' The information collection request reflects the 
revised title for this clause to read: 852.211-70, Equipment Operation 
and Maintenance Manuals, under the associated OMB control number 2900-
0587. By revising the clause and removing the requirement to develop 
Government-specified service manuals, VA has eliminated an unnecessary 
burden on the public by making use of commercial operation and 
maintenance manuals consistent with the general public and established 
commercial practices, thereby reducing by half the estimated annual 
hourly burden which is now estimated at 311 hours, a reduction of 310 
annual hours. Notice of OMB approval for this information collection 
will be published in a future Federal Register document.
    This final rule removes two of the six existing information 
collection requirements associated with this action at 48 CFR 852.211-
71, Special Notice, and 48 CFR 852.211-73, Brand Name or Equal. Under 
the provisions of the Paperwork Reduction Act (44 U.S.C. 3501-3521), it 
discontinues the associated corresponding approved OMB control numbers, 
2900-0588 and 2900-0585, respectively. For 48 CFR 852.211-71, Special 
Notice, and its corresponding OMB control number 2900-0588, this 
results in a removal of 875 estimated annual burden hours. For 48 CFR 
852.211-73, Brand Name or Equal, and its corresponding OMB control 
number 2900-0585, this results in a removal of 1,125 estimated annual

[[Page 49304]]

burden hours. Notice of OMB approval for the information collection 
requests will be published in a future Federal Register document.
    This final rule also contains two other provisions constituting a 
collection of information at 48 CFR 852.211-72, Technical Industry 
Standards, and 48 CFR 832.202-4, Security for Government financing, 
which remain unchanged. Under the provisions of the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501-3521), no new or proposed revised 
collection of information is associated with these provisions as a part 
of this rule. The information collection requests for 48 CFR 852.211-72 
and 48 CFR 832.202-4 are currently approved by OMB and have been 
assigned OMB control numbers 2900-0586 and 2900-0688, respectively. The 
burden of these information collections remains unchanged. In 
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521), OMB has approved the reporting or recordkeeping provisions that 
are included in the clause and the text under section 832.202-4 cited 
above and has given the VA the following approval numbers: OMB 2900-
0586 and OMB 2900-0688, respectively.

Regulatory Flexibility Act

    This final rule will not have a significant economic impact on a 
substantial number of small entities as they are defined in the 
Regulatory Flexibility Act, 5 U.S.C. 601-612. This final rule will 
generally be small business neutral. The rule text does not change VA's 
policy regarding small businesses. Therefore, the rule does not have a 
significant economic impact on substantial number of small entities. 
There are no increased and/or decreased costs to small entities. The 
overall impact of this final rule will be of benefit to small 
businesses owned by Veterans or service-disabled Veterans as the VAAR 
is being updated to remove extraneous procedural information that 
applies only to VA's internal operating procedures. VA is merely adding 
existing and current regulatory requirements to the VAAR and removing 
any guidance that is applicable only to VA's internal operation 
processes or procedures. VA estimates no cost impact to individual 
business resulting from these rule updates. This rulemaking does not 
change VA's policy regarding small businesses, does not have an 
economic impact to individual businesses, and there are no increased or 
decreased costs to small business entities. On this basis, this final 
rule will not have a significant economic impact on a substantial 
number of small entities as they are defined in the Regulatory 
Flexibility Act, 5 U.S.C. 601-612. Therefore, under 5 U.S.C. 605(b), 
this final rule is exempt from the initial and final regulatory 
flexibility analysis requirements of sections 603 and 604.

Executive Orders 12866, 13563 and 13771

    Executive Orders (E.O.) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
E.O. 12866, Regulatory Planning and Review defines ``significant 
regulatory action'' to mean any regulatory action that is likely to 
result in a rule that may: ``(1) Have an annual effect on the economy 
of $100 million or more or adversely affect in a material way the 
economy, a sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
governments or communities; (2) Create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency; 
(3) Materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
this Executive order.''
    VA has examined the economic, interagency, budgetary, legal, and 
policy implications of this regulatory action, and it has been 
determined not to be a significant regulatory action under E.O. 12866 
because it does not raise novel legal or policy issues arising out of 
legal mandates, the President's priorities, or the principles set forth 
in this Executive Order.
    VA's impact analysis can be found as a supporting document at 
http://www.regulations.gov, usually within 48 hours after the 
rulemaking document is published. Additionally, a copy of the 
rulemaking and its impact analysis are available on VA's website at 
http://www.va.gov/orpm by following the link for VA Regulations 
Published from FY 2004 Through Fiscal Year to Date. This final rule is 
considered an E.O. 13771 deregulatory action. Details on the estimated 
cost savings of this final rule can be found in the rule's economic 
analysis.

List of Subjects

48 CFR Part 801

    Administrative practice and procedure, Government procurement, 
Reporting and recordkeeping requirements.

48 CFR Parts 811 and 832

    Government procurement.

48 CFR Part 852

    Government procurement, Reporting and recordkeeping requirements.

48 CFR Part 870

    Asbestos, Frozen foods, Government procurement, Telecommunications.

Signing Authority

    The Secretary of Veterans Affairs approved this document and 
authorized the undersigned to sign and submit the document to the 
Office of the Federal Register for publication electronically as an 
official document of the Department of Veterans Affairs. Robert L. 
Wilkie, Secretary, Department of Veterans Affairs, approved this 
document on August 24, 2018, for publication.

    Dated: August 28, 2018.
Consuela Benjamin,
Regulations Development Coordinator, Office of Regulation Policy & 
Management, Office of the Secretary, Department of Veterans Affairs.

    For the reasons set out in the preamble, VA amends 48 CFR parts 
801, 811, 832, 852, and 870 as follows:

PART 801--DEPARTMENT OF VETERANS AFFAIRS ACQUISITION REGULATION 
SYSTEM

0
1. The authority citation for part 801 is revised to read as follows:

    Authority:  40 U.S.C. 121(c); 41 U.S.C. 1121; 41 U.S.C. 1303; 41 
U.S.C. 1702; and 48 CFR 1.301-1.304.


0
2. In section 801.106, table columns titled ``48 CFR part or section 
where identified and described'' and ``Current OMB control number'' are 
amended by--
0
a. Removing the reference to section 832.006-4 and OMB Control Number 
2900-0668.
0
b. Removing the reference to section 852.211-71 and OMB Control Number 
2900-0588.
0
c. Removing the reference to section 852.211-73 and OMB Control Number 
2900-0585.
0
d. Removing ``852.236-82 through.''
0
e. Adding an entry for sections 852.232-70 and 852.232-71 in numerical 
order.

[[Page 49305]]

    The addition reads as follows:


801.106  OMB approval under the Paperwork Reduction Act.

* * * * *

------------------------------------------------------------------------
                                                            Current OMB
  48 CFR part or section where identified and described     control No.
------------------------------------------------------------------------
 
                                * * * * *
852.232-70 and 852.232-71...............................       2900-0422
 
                                * * * * *
------------------------------------------------------------------------


0
3. Under the authority of 48 CFR 1.301 through 1.304, the heading of 
subchapter B is revised to read as follows:

SUBCHAPTER B--ACQUISITION PLANNING

PART 811--DESCRIBING AGENCY NEEDS

0
4. The authority citation for part 811 is revised to read as follows:

    Authority:  40 U.S.C. 121(c); 41 U.S.C. 1303; 41 U.S.C. 1702; 
and 48 CFR 1.301-1.304.


811.001  [Removed]

0
5. Section 811.001 is removed.

0
6. Revise subpart 811.1 to read as follows:

Subpart 811.1--Selecting and Developing Requirements Documents


811.107-70  Contract clause.

    The contracting officer shall insert the clause at 852.211-70, 
Equipment Operation and Maintenance Manuals, in solicitations and 
contracts for technical medical equipment, and other technical and 
mechanical equipment and devices where the requiring activity 
determines manuals are a necessary requirement for operation and 
maintenance of the equipment.

0
7. Revise subpart 811.2 to read as follows:

Subpart 811.2--Using and Maintaining Requirements Documents


811.204-70  Contract clause.

    The contracting officer shall insert the clause at 852.211-72, 
Technical Industry Standards, in solicitations and contracts requiring 
conformance to technical industry standards, federal specifications, 
standards and commercial item descriptions unless comparable coverage 
is included in the item specification.

Subpart 811.4--[Removed and Reserved]

0
8. Subpart 811.4 is removed and reserved.

Subpart 811.5--[Removed and Reserved]

0
9. Subpart 811.5 is removed and reserved.

Subpart 811.6--[Removed and Reserved]

0
10. Subpart 811.6 is removed and reserved.

PART 832--CONTRACT FINANCING

0
11. The authority citation for part 832 is revised to read as follows:

    Authority:  40 U.S.C. 121(c); 41 U.S.C. 1303; 41 U.S.C. 1702; 
and 48 CFR 1.301-1.304.


0
12. Section 832.001 is added to read as follows:


832.001  Definitions.

    As used in this part:
    (a) Designated agency office means the office designated by the 
purchase order, agreement, or contract to first receive and review 
invoices. This office can be contractually designated as the receiving 
entity. This office may be different from the office issuing the 
payment.
    (b) Electronic form means an automated system transmitting 
information electronically according to the accepted electronic data 
transmission methods identified in 832.7002-1. Facsimile, email, and 
scanned documents are not acceptable electronic forms for submission of 
payment requests.
    (c) Payment request means any request for contract financing 
payment or invoice payment submitted by a contractor under a contract.

0
13. Revise section 832.006-1 to read as follows:


832.006-1  General.

    (b) The Senior Procurement Executive (SPE) is authorized to make 
determinations that there is substantial evidence that contractors' 
requests for advance, partial, or progress payments are based on fraud 
and may direct that further payments to the contractors be reduced or 
suspended, as provided in FAR 32.006.


832.006-2 and 832.006-3  [Removed]

0
14. Remove sections 832.006-2 and 832.006-3.

0
15. Section 832.006-4 is revised to read as follows:


832.006-4  Procedures.

    (b) The Remedy Coordination Official (RCO) for VA is the Deputy 
Senior Procurement Executive (DSPE) who shall carry out the 
responsibilities of the Secretary or designee in FAR 32.006-4(b).
    (e) The RCO shall carry out the responsibilities of the agency head 
in FAR 32.006-4(e) to notify the contractor of the reasons for the 
recommended action and of its right to submit information within a 
reasonable period of time in response to the proposed action under FAR 
32.006.
    (1) The notice of proposed action will be sent to the last known 
address of the contractor, the contractor's counsel, or agent for 
service of process, by certified mail, return receipt requested, or any 
other method that provides signed evidence of receipt. In the case of a 
business, the notice of proposed action may be sent to any partner, 
principal, officer, director, owner or co-owner, or joint venture. The 
contractor will be afforded an opportunity to appear before the RCO to 
present information or argument in person or through a representative 
and may supplement the oral presentation with written information and 
argument.
    (2) The contractor may supplement the oral presentation with 
written information and argument. The proceedings will be conducted in 
an informal manner and without the requirement for a transcript. If the 
RCO does not receive a reply from the contractor within 30 calendar 
days, the RCO will base his or her recommendations on the information 
available. Any recommendation of the RCO under FAR 31.006-4(a) and 
paragraph (b) of this section, must address the results of this 
notification and the information, if any, provided by the contractor. 
After reviewing all the information, the RCO shall make a 
recommendation to the SPE whether or not substantial evidence of fraud 
exists.
    (g) In addition to following the procedures in FAR 32.006-4, the 
SPE shall provide a copy of each final determination and the supporting 
documentation to the contractor, the RCO, the contracting officer, and 
the Office of the Inspector General (OIG). The contracting officer will 
place a copy of the determination and the supporting documentation in 
the contract file.

Subpart 832.1--Non-Commercial Item Purchase Financing

0
16. Section 832.111 is revised to read as follows:

[[Page 49306]]

832.111  Contract clauses for non-commercial purchases.

0
17. Section 832.111-70 is added to read as follows:


832.111-70  VA contract clauses for non-commercial purchases.

    (a)(1) Insert the clause at 852.232-70, Payments Under Fixed-Price 
Construction Contracts (Without NAS-CPM) in solicitations and contracts 
that contain the FAR clause at 52.232-5, Payments Under Fixed-Price 
Construction Contracts, and if the solicitation or contract does not 
require use of the ``Network Analysis System--Critical Path Method 
(NAS-CPM).''
    (2) If the solicitation or contract includes guarantee period 
services, the contracting officer shall use the clause with its 
Alternate I.
    (b)(1) Insert the clause at 852.232-71, Payments Under Fixed-Price 
Construction Contracts (Including NAS-CPM), in solicitations and 
contracts that contain the FAR clause at 52.232-5, Payments Under 
Fixed-Price Construction Contracts, and if the solicitation or contract 
requires use of the ``Network Analysis System--Critical Path Method 
(NAS-CPM).''
    (2) If the solicitation or contract includes guarantee period 
services, the contracting officer shall use the clause with its 
Alternate I.

Subpart 832.2--Commercial Item Purchase Financing


832.201  [Removed]

0
18. Section 832.201 is removed.

0
19. Section 832.202-1 is revised to read as follows:


832.202-1  Policy.

    (d) HCAs shall report, no later than December 31st of each calendar 
year, to the Senior Procurement Executive (SPE) and the DSPE, on the 
number of contracts for commercial items with unusual contract 
financing or with commercial interim or advance payments approved for 
the previous fiscal year. The report shall include the contract number 
and amount, the amount of the unusual contract financing or with 
commercial interim or advance payments approved, and the kind and 
amount of security obtained for the advance.

0
20. Section 832.202-4 is revised to read as follows:


832.202-4  Security for Government financing.

    (a)(2) An offeror's financial condition may be considered adequate 
security to protect the Government's interest when the Government 
provides contract financing. In assessing the offeror's financial 
condition, the contracting officer may obtain, to the extent required, 
the following information--
    (i) A current year interim balance sheet and income statement and 
balance sheets and income statements for the two preceding fiscal 
years. The statements should be prepared in accordance with generally 
accepted accounting principles and must be audited and certified by an 
independent public accountant or an appropriate officer of the firm;
    (ii) A cash flow forecast for the remainder of the contract term 
showing the planned origin and use of cash within the firm or branch 
performing the contract;
    (iii) Information on financing arrangements disclosing the 
availability of cash to finance contract performance, the contractor's 
exposure to financial risk, and credit arrangements;
    (iv) A statement of the status of all State, local, and Federal tax 
accounts, including any special mandatory contributions;
    (v) A description and explanation of the financial effects of any 
leases, deferred purchase arrangements, patent or royalty arrangements, 
insurance, planned capital expenditures, pending claims, contingent 
liabilities, and other financial aspects of the business; and
    (vi) Any other financial information deemed necessary.

Subpart 832.4--Advance Payments for Non-Commercial Items

0
21. Section 832.402 is revised to read as follows:


832.402  General.

    (c)(1)(iii) The authority to make the determination required by FAR 
32.402(c)(1)(iii) and to approve contract terms is delegated to the 
head of the contracting activity (HCA). The request for approval shall 
include the information required by FAR 32.409-1 and shall address the 
standards for advance payment in FAR 32.402(c)(2). HCAs shall report, 
no later than December 31st of each calendar year, to the Senior 
Procurement Executive (SPE) and the DSPE, on number of contracts for 
non-commercial items with advance payments approved in the previous 
fiscal year. The report shall include the contract number and amount, 
the amount of the advance payment, and the kind and amount of security 
obtained for the advance.

0
22. Section 832.404 is revised to read as follows:


832.404  Exclusions.

    (b)(1) As permitted by 31 U.S.C. 3324(d)(2), VA allows advance 
payment for subscriptions or other charges for newspapers, magazines, 
periodicals, and other publications for official use, notwithstanding 
the provisions of 31 U.S.C. 3324(a). The term ``other publications'' 
includes any publication printed, microfilmed, photocopied or 
magnetically or otherwise recorded for auditory or visual use.
    (2) As permitted by 31 U.S.C. 1535, VA allows advance payment for 
services and supplies obtained from another Government agency.
    (3) As permitted by 5 U.S.C. 4109, VA allows advance payment for 
all or any part of the necessary expenses for training Government 
employees, including obtaining professional credentials under 5 U.S.C. 
5757, in Government or non-Government facilities, including the 
purchase or rental of books, materials, and supplies or services 
directly related to the training of a Government employee.

Subpart 832.5 [Removed and Reserved]

0
23. Subpart 832.5 is removed and reserved.

Subpart 832.8 [Removed and Reserved]

0
24. Subpart 832.8 is removed and reserved.

Subpart 832.9--Prompt Payment


832.904   [Redesignated as 832.904-70 and Amended]

0
25. Redesignate section 832.904 as 832.904-70 and revise newly 
redesignated section 832.904-70 to read as follows:


832.904-70  Determining payment due dates for small businesses.

    Pursuant to Office of Management and Budget Memorandum M-11-32, 
Accelerating Payments to Small Businesses for Goods and Services, 
contracting officers shall, to the full extent permitted by law, make 
payments to small business contractors as soon as practicable, with the 
goal of making payments within 15 days of receipt of a proper invoice 
and confirmation that the goods and services have been received and 
accepted by the Federal Government.

Subpart 832.11 [Removed and Reserved]

0
26. Subpart 832.11 is removed and reserved.

[[Page 49307]]


0
27. Revise subpart 832.70 to read as follows:

Subpart 832.70--Electronic Invoicing Requirements

Sec.
832.7000 General.
832.7001 Electronic payment requests.
832.7001-1 Data transmission.
832.7001-2 Contract clause.


832.7000  General.

    This subpart prescribes policy requirements for submitting and 
processing payment requests in electronic form.


832.7001  Electronic payment requests.

    (a) The contractor shall submit payment requests in electronic form 
unless directed by the contracting officer to submit payment requests 
by mail. Purchases paid with a Government-wide commercial purchase card 
are considered to be an electronic transaction for purposes of this 
rule, and therefore no additional electronic invoice submission is 
required.
    (b) The contracting officer may direct the contractor to submit 
payment requests by mail, through the United States Postal Service, to 
the designated agency office for--
    (1) Awards made to foreign vendors for work performed outside the 
United States;
    (2) Classified contracts or purchases when electronic submission 
and processing of payment requests could compromise the safeguarding of 
classified or privacy information;
    (3) Contracts awarded by contracting officers in the conduct of 
emergency operations, such as responses to national emergencies;
    (4) Solicitations or contracts in which the designated agency 
office is a VA entity other than the VA Financial Services Center in 
Austin, Texas; or
    (5) Solicitations or contracts in which the VA designated agency 
office does not have electronic invoicing capability as described 
above.


832.7001-1  Data transmission.

    The contractor shall submit electronic payment requests through--
    (a) VA's Electronic Invoice Presentment and Payment System at the 
current website address provided in the contract; or
    (b) A system that conforms to the X12 electronic data interchange 
(EDI) formats established by the Accredited Standards Center (ASC) 
chartered by the American National Standards Institute (ANSI).


832.7001-2  Contract clause.

    The contracting officer shall insert the clause at 852.232-72, 
Electronic Submission of Payment Requests, in solicitations and 
contracts exceeding the micro-purchase threshold, except those for 
which the contracting officer has directed otherwise under 832.7001, 
and those paid with a Governmentwide commercial purchase card.

PART 852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
28. The authority citation for part 852 is revised to read as follows:

    Authority:  38 U.S.C. 8127-8128, and 8151-8153; 40 U.S.C. 
121(c); 41 U.S.C. 1121(c)(3); 41 U.S.C. 1303; 41 U.S.C. 1702; and 48 
CFR 1.301-1.304.

Subpart 852.2--Text of Provisions and Clauses

0
29. Section 852.211-70 is revised to read as follows:


852.211-70  Equipment Operation and Maintenance Manuals.

    As prescribed in 811.107-70, insert the following clause:

Equipment Operation and Maintenance Manuals (Nov 2018)

    The Contractor shall follow standard commercial practices to 
furnish manual(s), handbook(s) or brochure(s) containing operation, 
installation, and maintenance instructions, including pictures or 
illustrations, schematics, and complete repair/test guides, as 
necessary, for technical medical equipment and devices, and/or other 
technical and mechanical equipment provided per CLIN(s) #___ 
[Contracting Officer insert CLIN information]. The manuals, handbooks 
or brochures shall be provided in hard copy, soft copy or with 
electronic access instructions, consistent with standard industry 
practices for the equipment or device. Where applicable, the manuals, 
handbooks or brochures will include electrical data and connection 
diagrams for all utilities. The documentation shall also contain a 
complete list of all replaceable parts showing part number, name, and 
quantity required.


(End of clause)


852.211-71  [Removed and Reserved]

0
30. Section 852.211-71 is removed and reserved.

0
31. Section 852.211-72 is revised to read as follows:


852.211-72  Technical Industry Standards.

    As prescribed in 811.204-70, insert the following clause:

Technical Industry Standards (Nov 2018)

    (a) The Contractor shall conform to the standards established 
by:___ [Contracting Officer: Insert name of organization establishing 
the requirement, reference title, cite and date, e.g., United States 
Department of Agriculture (USDA), Institutional Meat Purchase 
Specifications (IMPS), Series 100, Beef products, Jan 2010] as to 
[Contracting Officer: Insert item and CLIN, e.g., CLIN 0005 Ground 
Beef].
    (b) The Contractor shall submit proof of conformance to the 
standard. This proof may be a label or seal affixed to the equipment or 
supplies, warranting that the item(s) have been tested in accordance 
with the standards and meet the contract requirement. Proof may also be 
furnished by the organization listed above certifying that the item(s) 
furnished have been tested in accordance with and conform to the 
specified standards.
    (c) Offerors may obtain the standards cited in this provision by 
submitting a request, including the solicitation number, title and 
number of the publication to: [Organization]_____ [Mail or email 
address] _____.
    (d) The offeror shall contact the Contracting Officer if response 
is not received within two weeks of the request.


(End of clause)


852.211-73, 852.211-74, and 852.211-75  [Removed and Reserved]

0
32. Remove and reserve sections 852.211-73 through 852.211-75.

0
33. Add section 852.232-70 to read as follows:


852.232-70  Payments Under Fixed-Price Construction Contracts (Without 
NAS-CPM).

    As prescribed in 832.111-70, insert the following clause in 
contracts that do not contain a section entitled ``Network Analysis 
System--Critical Path''

Payments Under Fixed-Price Construction Contracts (Without NAS-CPM) 
(Nov 2018)

    The clause FAR 52.232-5, Payments Under Fixed-Price Construction 
Contracts, is implemented as follows:
    (a) Retainage. (1) The Contracting Officer may retain funds--
    (i) Where performance under the contract has been determined to be 
deficient or the Contractor has performed in an unsatisfactory manner 
in the past; or
    (ii) As the contract nears completion, to ensure that deficiencies 
will be corrected and that completion is timely.

[[Page 49308]]

    (2) Examples of deficient performance justifying a retention of 
funds include, but are not restricted to, the following--
    (i) Unsatisfactory progress as determined by the Contracting 
Officer;
    (ii) Failure to meet schedule in Schedule of Work Progress;
    (iii) Failure to present submittals in a timely manner; or
    (iv) Failure to comply in good faith with approved subcontracting 
plans, certifications, or contract requirements.
    (3) Any level of retention shall not exceed 10 percent either where 
there is determined to be unsatisfactory performance, or when the 
retainage is to ensure satisfactory completion. Retained amounts shall 
be paid promptly upon completion of all contract requirements, but 
nothing contained in this paragraph (a)(3) shall be construed as 
limiting the Contracting Officer's right to withhold funds under other 
provisions of the contract or in accordance with the general law and 
regulations regarding the administration of Government contracts.
    (b) The Contractor shall submit a schedule of cost to the 
Contracting Officer for approval within 30 calendar days after date of 
receipt of notice to proceed. Such schedule will be signed and 
submitted in triplicate. The approved cost schedule will be one of the 
bases for determining progress payments to the Contractor for work 
completed. This schedule shall show cost by the work activity/event for 
each building or unit of the contract, as instructed by the resident 
engineer.
    (1) The work activities/events shall be subdivided into as many 
sub-activities/events as are necessary to cover all component parts of 
the contract work.
    (2) Costs as shown on this schedule must be true costs and the 
resident engineer may require the Contractor to submit the original 
estimate sheets or other information to substantiate the detailed 
makeup of the schedule.
    (3) The sums of the sub-activities/events, as applied to each work 
activity/event, shall equal the total cost of such work activity/event. 
The total cost of all work activities/events shall equal the contract 
price.
    (4) Insurance and similar items shall be prorated and included in 
the cost of each branch of the work.
    (5) The cost schedule shall include separate cost information for 
the systems listed in the table in this paragraph (b)(5). The 
percentages listed in the following table are proportions of the cost 
listed in the Contractor's cost schedule and identify, for payment 
purposes, the value of the work to adjust, correct and test systems 
after the material has been installed. Payment of the listed 
percentages will be made only after the Contractor has demonstrated 
that each of the systems is substantially complete and operates as 
required by the contract.

           Value of Adjusting, Correcting, and Testing System
------------------------------------------------------------------------
                         System                               Percent
------------------------------------------------------------------------
Pneumatic tube system...................................              10
Incinerators (medical waste and trash)..................               5
Sewage treatment plant equipment........................               5
Water treatment plant equipment.........................               5
Washers (dish, cage, glass, etc.).......................               5
Sterilizing equipment...................................               5
Water distilling equipment..............................               5
Prefab temperature rooms (cold, constant temperature)...               5
Entire air-conditioning system (Specified under 600                    5
 Sections)..............................................
Entire boiler plant system (Specified under 700                        5
 Sections)..............................................
General supply conveyors................................              10
Food service conveyors..................................              10
Pneumatic soiled linen and trash system.................              10
Elevators and dumbwaiters...............................              10
Materials transport system..............................              10
Engine-generator system.................................               5
Primary switchgear......................................               5
Secondary switchgear....................................               5
Fire alarm system.......................................               5
Nurse call system.......................................               5
Intercom system.........................................               5
Radio system............................................               5
TV (entertainment) system...............................               5
------------------------------------------------------------------------

    (c) In addition to this cost schedule, the Contractor shall submit 
such unit costs as may be specifically requested. The unit costs shall 
be those used by the Contractor in preparing its bid and will not be 
binding as pertaining to any contract changes.
    (d) The Contracting Officer will consider for monthly progress 
payments material and/or equipment procured by the Contractor and 
stored on the construction site, as space is available, or at a local 
approved location off the site, under such terms and conditions as the 
Contracting Officer approves, including but not limited to the 
following--
    (1) The materials or equipment are in accordance with the contract 
requirements and/or approved samples and shop drawings;
    (2) The materials and/or equipment are approved by the resident 
engineer;
    (3) The materials and/or equipment are stored separately and are 
readily available for inspection and inventory by the resident 
engineer;
    (4) The materials and/or equipment are protected against weather, 
theft and other hazards and are not subjected to deterioration; and
    (5) The Contractor obtains the concurrence of its surety for off-
site storage.
    (e) The Government reserves the right to withhold payment until 
samples, shop drawings, engineer's certificates, additional bonds, 
payrolls, weekly statements of compliance, proof of title, 
nondiscrimination compliance reports, or any other requirements of this 
contract, have been submitted to the satisfaction of the Contracting 
Officer.
    (f) The Contracting Officer will notify the Contractor in writing 
within 10 calendar-days of exercising retainage against any payment in 
accordance with

[[Page 49309]]

FAR clause 52.232-5(e). The notice shall disclose the amount of the 
retainage in value and percent retained from the payment, and provide 
explanation for the retainage.


(End of clause)

    Alternate I (Nov 2018). If the specifications include guarantee 
period services, the Contracting Officer shall include the following 
paragraphs as additions to paragraph (b) of the basic clause:
    (6)(i) The Contractor shall at the time of contract award furnish 
the total cost of the guarantee period services in accordance with 
specification section(s) covering guarantee period services. The 
Contractor shall submit, within 15 calendar days of receipt of the 
notice to proceed, a guarantee period performance program that shall 
include an itemized accounting of the number of work-hours required to 
perform the guarantee period service on each piece of equipment. The 
Contractor shall also submit the established salary costs, including 
employee fringe benefits, and what the Contractor reasonably expects to 
pay over the guarantee period, all of which will be subject to the 
Contracting Officer's approval.
    (ii) The cost of the guarantee period service shall be prorated on 
an annual basis and paid in equal monthly payments by VA during the 
period of guarantee. In the event the installer does not perform 
satisfactorily during this period, all payments may be withheld and the 
Contracting Officer shall inform the Contractor of the unsatisfactory 
performance, allowing the Contractor 10 days to correct deficiencies 
and comply with the contract. The guarantee period service is subject 
to those provisions as set forth in the Payments and Default clauses.

0
34. Add section 852.232-71 to read as follows:


852.232-71  Payments Under Fixed-Price Construction Contracts 
(Including NAS-CPM).

    As prescribed in 832.111-70, insert the following clause in 
contracts that contain a section entitled ``Network Analysis System--
Critical Path Method (NAS-CPM).''

Payments Under Fixed-Price Construction Contracts (Including NAS-CPM) 
(Nov 2018)

    The clause FAR 52.232-5, Payments Under Fixed-Price Construction 
Contracts, is implemented as follows:
    (a) Retainage. (1) The Contracting Officer may retain funds--
    (i) Where performance under the contract has been determined to be 
deficient or the Contractor has performed in an unsatisfactory manner 
in the past; or
    (ii) As the contract nears completion, to ensure that deficiencies 
will be corrected and that completion is timely.
    (2) Examples of deficient performance justifying a retention of 
funds include, but are not restricted to, the following--
    (i) Unsatisfactory progress as determined by the Contracting 
Officer;
    (ii) Failure to meet schedule in Schedule of Work Progress;
    (iii) Failure to present submittals in a timely manner; or
    (iv) Failure to comply in good faith with approved subcontracting 
plans, certifications, or contract requirements.
    (3) Any level of retention shall not exceed 10 percent either where 
there is determined to be unsatisfactory performance, or when the 
retainage is to ensure satisfactory completion. Retained amounts shall 
be paid promptly upon completion of all contract requirements, but 
nothing contained in this paragraph (a)(3) shall be construed as 
limiting the Contracting Officer's right to withhold funds under other 
provisions of the contract or in accordance with the general law and 
regulations regarding the administration of Government contracts.
    (b) The Contractor shall submit a schedule of costs in accordance 
with the requirements of section ``Network Analysis System--Critical 
Path Method (NAS-CPM)'' to the Contracting Officer for approval within 
90 calendar days after date of receipt of notice to proceed. The 
approved cost schedule will be one of the bases for determining 
progress payments to the Contractor for work completed.
    (1) Costs as shown on this schedule must be true costs and the 
resident engineer may require the Contractor to submit its original 
estimate sheets or other information to substantiate the detailed 
makeup of the cost schedule.
    (2) The total costs of all work activities/events shall equal the 
contract price.
    (3) Insurance and similar items shall be prorated and included in 
each work activity/event cost of the critical path method (CPM).
    (4) The CPM shall include a separate cost loaded activity for 
adjusting and testing of the systems listed in the table in paragraph 
(b)(5) of this clause. The percentages listed in paragraph (b)(5) will 
be used to determine the cost of adjust and test work activities/events 
and identify, for payment purposes, the value of the work to adjust, 
correct and test systems after the material has been installed.
    (5) Payment for adjust and test activities will be made only after 
the Contractor has demonstrated that each of the systems is 
substantially complete and operates as required by the contract.

           Value of Adjusting, Correcting, and Testing System
------------------------------------------------------------------------
                         System                               Percent
------------------------------------------------------------------------
Pneumatic tube system...................................              10
Incinerators (medical waste and trash)..................               5
Sewage treatment plant equipment........................               5
Water treatment plant equipment.........................               5
Washers (dish, cage, glass, etc.).......................               5
Sterilizing equipment...................................               5
Water distilling equipment..............................               5
Prefab temperature rooms (cold, constant temperature)...               5
Entire air-conditioning system (Specified under 600                    5
 Sections)..............................................
Entire boiler plant system (Specified under 700                        5
 Sections)..............................................
General supply conveyors................................              10
Food service conveyors..................................              10
Pneumatic soiled linen and trash system.................              10
Elevators and dumbwaiters...............................              10
Materials transport system..............................              10
Engine-generator system.................................               5
Primary switchgear......................................               5
Secondary switchgear....................................               5

[[Page 49310]]

 
Fire alarm system.......................................               5
Nurse call system.......................................               5
Intercom system.........................................               5
Radio system............................................               5
TV (entertainment) system...............................               5
------------------------------------------------------------------------

    (c) In addition to this cost schedule, the Contractor shall submit 
such unit costs as may be specifically requested. The unit costs shall 
be those used by the Contractor in preparing its bid and will not be 
binding as pertaining to any contract changes.
    (d) The Contracting Officer will consider for monthly progress 
payments material and/or equipment procured by the Contractor and 
stored on the construction site, as space is available, or at a local 
approved location off the site, under such terms and conditions as the 
Contracting Officer approves, including but not limited to the 
following--
    (1) The materials or equipment are in accordance with the contract 
requirements and/or approved samples and shop drawings;
    (2) The materials and/or equipment are approved by the resident 
engineer;
    (3) The materials and/or equipment are stored separately and are 
readily available for inspection and inventory by the resident 
engineer;
    (4) The materials and/or equipment are protected against weather, 
theft and other hazards and are not subjected to deterioration; and
    (5) The Contractor obtains the concurrence of its surety for off-
site storage.
    (e) The Government reserves the right to withhold payment until 
samples, shop drawings, engineer's certificates, additional bonds, 
payrolls, weekly statements of compliance, proof of title, 
nondiscrimination compliance reports, or any other requirements of this 
contract, have been submitted to the satisfaction of the Contracting 
Officer.
    (f) The Contracting Officer will notify the Contractor in writing 
within 10 calendar-days of exercising retainage against any payment in 
accordance with FAR clause 52.232-5(e). The notice shall disclose the 
amount of the retainage in value and percent retained from the payment, 
and provide explanation for the retainage.


(End of clause)

    Alternate I (Nov 2018). If the specifications include guarantee 
period services, the Contracting Officer shall include the following 
paragraphs as additions to paragraph (b) of the basic clause:
    (6)(i) The Contractor shall show on the critical path method (CPM) 
the total cost of the guarantee period services in accordance with the 
guarantee period service section(s) of the specifications. This cost 
shall be priced out when submitting the CPM cost loaded network. The 
cost submitted shall be subject to the approval of the Contracting 
Officer. The activity on the CPM shall have money only and not activity 
time.
    (ii) The Contractor shall submit with the CPM a guarantee period 
performance program which shall include an itemized accounting of the 
number of work-hours required to perform the guarantee period service 
on each piece of equipment. The Contractor shall also submit the 
established salary costs, including employee fringe benefits, and what 
the Contractor reasonably expects to pay over the guarantee period, all 
of which will be subject to the Contracting Officer's approval.
    (iii) The cost of the guarantee period service shall be prorated on 
an annual basis and paid in equal monthly payments by VA during the 
period of guarantee. In the event the installer does not perform 
satisfactorily during this period, all payments may be withheld and the 
Contracting Officer shall inform the Contractor of the unsatisfactory 
performance, allowing the Contractor 10 days to correct and comply with 
the contract. The guarantee period service is subject to those 
provisions as set forth in the Payments and Default clauses.

0
35. Section 852.232-72 is revised to read as follows:


852.232-72  Electronic Submission of Payment Requests.

    As prescribed in 832.7001-2, insert the following clause:

Electronic Submission of Payment Requests (Nov 2018)

    (a) Definitions. As used in this clause--
    (1) Contract financing payment has the meaning given in FAR 32.001;
    (2) Designated agency office means the office designated by the 
purchase order, agreement, or contract to first receive and review 
invoices. This office can be contractually designated as the receiving 
entity. This office may be different from the office issuing the 
payment;
    (3) Electronic form means an automated system transmitting 
information electronically according to the accepted electronic data 
transmission methods and formats identified in paragraph (c) of this 
clause. Facsimile, email, and scanned documents are not acceptable 
electronic forms for submission of payment requests;
    (4) Invoice payment has the meaning given in FAR 32.001; and
    (5) Payment request means any request for contract financing 
payment or invoice payment submitted by the Contractor under this 
contract.
    (b) Electronic payment requests. Except as provided in paragraph 
(e) of this clause, the Contractor shall submit payment requests in 
electronic form. Purchases paid with a Government-wide commercial 
purchase card are considered to be an electronic transaction for 
purposes of this rule, and therefore no additional electronic invoice 
submission is required.
    (c) Data transmission. A Contractor must ensure that the data 
transmission method and format are through one of the following:
    (1) VA's Electronic Invoice Presentment and Payment System at the 
current website address provided in the contract.
    (2) Any system that conforms to the X12 electronic data interchange 
(EDI) formats established by the Accredited Standards Center (ASC) and 
chartered by the American National Standards Institute (ANSI).
    (d) Invoice requirements. Invoices shall comply with FAR 32.905.
    (e) Exceptions. If, based on one of the circumstances in this 
paragraph (e), the Contracting Officer directs that payment requests be 
made by mail, the Contractor shall submit payment requests by mail 
through the United States Postal Service to the designated agency 
office. Submission of payment requests by mail may be required for--

[[Page 49311]]

    (1) Awards made to foreign vendors for work performed outside the 
United States;
    (2) Classified contracts or purchases when electronic submission 
and processing of payment requests could compromise the safeguarding of 
classified or privacy information;
    (3) Contracts awarded by Contracting Officers in the conduct of 
emergency operations, such as responses to national emergencies;
    (4) Solicitations or contracts in which the designated agency 
office is a VA entity other than the VA Financial Services Center in 
Austin, Texas; or
    (5) Solicitations or contracts in which the VA designated agency 
office does not have electronic invoicing capability as described 
above.


(End of clause)


852.236-82 and 852.236-83  [Removed and Reserved]

0
36. Remove and reserve sections 852.236-82 and 852.236-83.

PART 870--SPECIAL PROCUREMENT CONTROLS

0
37. The authority citation for part 870 is revised to read as follows:

    Authority:  40 U.S.C. 121(c); 41 U.S.C. 1702; and 48 CFR 1.301-
1.304.


870.112 and 870.113  [Removed]

0
38. Remove sections 870.112 and 870.113.

[FR Doc. 2018-18984 Filed 9-28-18; 8:45 am]
 BILLING CODE 8320-01-P