[Federal Register Volume 91, Number 119 (Tuesday, June 23, 2026)]
[Proposed Rules]
[Pages 37550-37634]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-12559]
[[Page 37549]]
Vol. 91
Tuesday,
No. 119
June 23, 2026
Part III
Office of Management and Budget
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Office of Federal Procurement Policy
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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 Parts 1, 2, 4, Et al.
Federal Acquisition Regulation: Revolutionary Federal Acquisition
Regulation Overhaul Parts 1, 2, 4, 33, 39, 40, and 53; Proposed Rule
Federal Register / Vol. 91, No. 119 / Tuesday, June 23, 2026 /
Proposed Rules
[[Page 37550]]
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OFFICE OF MANAGEMENT AND BUDGET
Office of Federal Procurement Policy
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1, 2, 4, 33, 39, 40, 52, and 53
[FAR Case 2026-001, Docket No. FAR-2026-0001, Sequence No. 1]
RIN 9000-AO86
Federal Acquisition Regulation: Revolutionary Federal Acquisition
Regulation Overhaul Parts 1, 2, 4, 33, 39, 40, and 53
AGENCY: Office of Federal Procurement Policy (OFPP), Office of
Management and Budget (OMB); Department of Defense (DoD); General
Services Administration (GSA); and National Aeronautics and Space
Administration (NASA).
ACTION: Proposed rule.
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SUMMARY: OFPP, DoD, GSA, and NASA (collectively referred to as the
Federal Acquisition Regulatory Council or FAR Council) are proposing to
amend the Federal Acquisition Regulation (FAR) to implement Executive
Order (E.O.) 14275, Restoring Common Sense to Federal Procurement. The
E.O. directs the elimination of excessive acquisition regulations to
stop the inefficient use of American taxpayer dollars. The FAR Council
is issuing twelve proposed rules that collectively will streamline the
FAR in its entirety. This rule proposes revisions to FAR parts 1, 2, 4,
33, 39, 40, 52, and 53.
DATES: Interested parties should submit written comments to the
Regulatory Secretariat Division at the address shown below on or before
July 23, 2026, to be considered in the formation of the final rule.
ADDRESSES: Submit comments in response to FAR Case 2026-001 to the
Federal eRulemaking portal at https://www.regulations.gov. Follow the
instructions for sending comments.
Instructions: Please submit comments only and cite ``FAR Case 2026-
001'' in all correspondence related to this case. Include your name,
company name (if any), and ``FAR Case 2026-001'' on any attached
document. Comments received generally will be posted without change to
https://www.regulations.gov, including any personal and/or business
confidential information provided. Public comments may be submitted as
an individual, as an organization, or anonymously (see frequently asked
questions at https://www.regulations.gov/faq). To confirm receipt of
your comment(s), please check https://www.regulations.gov,
approximately two to three days after submission to verify posting.
Docket: For access to the docket to read background documents or
comments received, go to https://www.regulations.gov/FAR-2026-001.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
[email protected] or call 202-969-4075 and cite ``FAR Case 2026-001.''
For information pertaining to status, publication schedules, or
alternate instructions for submitting comments if https://www.regulations.gov cannot be used, contact the Regulatory Secretariat
Division at 202-501-4755 or [email protected]. Please cite ``FAR Case
2026-001.''
SUPPLEMENTARY INFORMATION:
I. Background
E.O. 14275, Restoring Common Sense to Federal Procurement (April
15, 2025), resets the foundation for Federal buying by requiring the
FAR Council to produce a streamlined FAR that is simpler, clearer, and
structured for speed. According to the E.O., the FAR has evolved from
its original purpose (i.e., to establish uniform procedures across
executive departments and agencies), into an excessive and
overcomplicated regulatory framework and bureaucracy. While meant to
``deliver, on a timely basis, the best value product or service to the
customer, while maintaining the public's trust and fulfilling public
policy objectives,'' the FAR has become an expensive barrier to
achieving those objectives. As a result, the E.O. directed the FAR
Council and OMB to create an agile, effective, and efficient regulation
that contains only provisions required by statute or essential to sound
procurement.
To implement E.O. 14275, OMB issued Memorandum M-25-26, Overhauling
the Federal Acquisition Regulation, which announced the ``Revolutionary
FAR Overhaul'' (RFO) and created a roadmap for producing simpler
regulations aligned to statute, rewritten in plain language, and
including nonstatutory requirements that are necessary to conducting a
sound procurement. The memorandum described a new streamlined vision
for the FAR, to be maintained alongside nonregulatory governmentwide
guidance to provide a common-sense authoritative foundation for nimble
response and delivery of mission capability.
This new vision represents a paradigm shift where over-engineered
regulations designed for paperwork and compliance are replaced with
streamlined regulations focused on core stewardship principles and
nonregulatory guidance that will be used in concert with the
streamlined FAR focused on proven buying strategies, critical thinking,
market awareness (including to expand awareness of goods, products, and
materials offered in the United States), and risk literacy to enhance
workforce problem-solving. The significant reduction of unnecessary
mandates is intended to clarify and reinforce the contracting officer's
discretion to determine the best way to apply policies and practices.
The newly established, nonregulatory guidance, which has been inspired
by acquisition innovation advocates, category managers, other
experienced practitioners, and many years of feedback from the
contractor community--is expected to facilitate contracting officers'
use of their discretion more efficiently and effectively to make
smarter buying decisions.
OMB Memorandum M-25-26 also directed the FAR Council to complete
the regulatory overhaul in two phases, each with robust public input.
The FAR Council conducted its phase one effort in fiscal year 2025 by
issuing model class deviations to replace each part in the FAR until
such time as formal rulemaking occurred. This proposed rule is one of a
series that constitute the FAR Council's phase two effort to obtain
public comment through formal rulemaking.
II. Discussion and Analysis
A summary of proposed changes to existing parts 1, 2, 4, 33, 39,
40, 52 and 53 are as follows:
A. General
1. General RFO updates. This proposed rule generally reorganizes
the FAR parts into phases of acquisition and simplifies the text into
plain language, where possible. The plain language efforts include
changes to active voice, edits to improve readability, and
reorganization to present information more logically. None of the plain
language edits are intended to change existing FAR requirements. The
rewriting of the entire FAR also required edits to harmonize the
changes being proposed such as updating the cross-
[[Page 37551]]
references. This aligns with the Federal plain language guidelines as
directed by the Plain Writing Act of 2010 (5 U.S.C. 301 note).
2. Standardization of prescriptions. This rule proposes revisions
to standardize prescriptions for provisions and clauses. These changes
are intended to provide better clarity around the applicability of
provisions and clauses such as whether they apply to commercial
products and services.
3. Use of ``must'' instead of ``shall''. Additional revisions are
being proposed throughout the FAR text and FAR provisions and clauses
to replace the use of the term ``shall'' with ``must'' or ``will,'' as
appropriate, to impose requirements.
4. Non-statutory requirements. Section 4 of the E.O. required
amendments to the FAR to ensure it contains only provisions that are
required by statute or that are otherwise necessary to support
simplicity and usability, strengthen the efficacy of the procurement
system, or protect economic or national security. The FAR Council
reviewed all non-statutory requirements to determine if they are still
relevant and essential to sound procurement in today's contracting
environment based on the criteria from section 4 of the E.O. The
proposed rule retains non-statutory requirements that further one or
more of the elements of sound procurements, including those
requirements that serve as guardrails to protecting taxpayer interests
and promote taxpayer confidence in the procurement system. Non-
statutory requirements that were beneficial but not essential were
retained in the non-regulatory guidance documents. Other non-statutory
requirements that did not meet these standards were removed. The
Council considered the extent to which regulation is the most efficient
means for capturing the benefit of the policy. For example, most ``how
to'' requirements were found to be more appropriately suited for non-
regulatory coverage which better enables a contracting officer to use
discretion in determining the application of a strategy to a given
situation and limits the risk of overapplication, which can create
wasteful burden on the contracting parties.
As part of the RFO, the FAR Council has created a number of non-
regulatory resources, including the FAR Companion, which provides
insight from experienced practitioners across the government on using
more streamlined practices and processes. The migration of significant
coverage to non-regulatory guidance is intended to ensure that the
benefits of the policy are not outweighed by the compliance burden of a
more rigidly written regulation that is prone to application in an
overly broad manner. This approach was explained to the public in a set
of ``frequently asked questions'' that were posted on the Revolutionary
FAR Overhaul homepage shortly after the initiative was launched.
B. Summary of Changes to FAR Part 1
1. Guiding principles
Proposed revisions to the guiding principles in FAR 1.102
prioritize a ``mission first'' approach, positioning it as the
paramount principle of the Federal Acquisition Regulations System. This
ensures that all acquisition activities are directly aligned with
achieving the agency's overarching objectives and serving the public
interest.
The proposed changes also elevate the importance of fiscal
responsibility by prioritizing the best use of taxpayer dollars, which
includes price preferences and incentives for domestically sourced
goods and services. This principle underscores a commitment to ``Buy
American'' laws, efficiency, cost-effectiveness, and accountability in
all spending. Concurrently, the proposed changes recognize that timely
acquisition and delivery are often essential for mission success.
The guiding principles retain a strong emphasis on satisfying the
customer, ensuring that the needs and expectations of the end-users are
met with high-quality products and services. It continues to encourage
the maximization of commercial products and commercial services. It
also continues to promote competition, recognizing it as a vital
mechanism for driving innovation, achieving better value, while
prioritizing participation of domestic suppliers to foster a resilient
and competitive American industrial base. Finally, it encourages
innovation, urging agencies to explore and adopt new technologies,
processes, and approaches that can lead to more efficient, effective,
and transformative outcomes in government contracting.
2. Forms
i. Relocation of FAR part 53, Forms. This rule proposes to relocate
all information pertaining to forms from its current placement in FAR
part 53, Forms to FAR part 1, Federal Acquisition Regulations System,
specifically to the new proposed FAR subpart 1.6, Forms. This strategic
move is designed to further enhance the consolidation of related
information, by creating a more deliberate, logical, and user-friendly
framework that fosters greater efficiency.
ii. Summary of changes to forms. This proposed rule directs the
acquisition community to a new centralized website (see https://acquisition.gov/FARforms) as the authoritative repository for all
acquisition related forms. As a result, to update the list of forms,
the FAR no longer needs to be amended through the formal rulemaking
process. This reduces the administrative burden on the FAR Council and
increases the Government's ability to quickly keep the list of forms
up-to-date. The ``Forms List'' referenced in FAR 1.602(b) now performs
the prescriptive function previously handled throughout FAR subparts
53.2 and 53.3, shifting the FAR's role from a static, self-contained
text to a dynamic system that points to live, authoritative resources.
The proposed change simplifies user access to the forms and forms-
related information. The notice and comment process for substantive
changes to forms prescribed by the FAR remains unchanged.
3. Federal Acquisition Regulatory Council (FAR Council)
This rule proposes to update the FAR Council consistent with 41
U.S.C. chapter 13, to add the Administrator for Federal Procurement
Policy.
4. Regulatory Sunset
Consistent with section 6 of E.O. 14275, this rule proposes to add
a new regulatory sunset requirement to the FAR. A regulatory sunset
establishes a process to review sections, provisions and clauses in the
FAR, and identify those policies that are no longer required or are
outdated and can be removed from regulation through rulemaking. This
policy serves as a built-in mechanism to prevent the accumulation of
outdated or unnecessary regulations and to encourage regular review of
the regulatory framework.
To facilitate the implementation of the regulatory sunset, the FAR
Council anticipates standardizing this process by issuing a future
proposed rule at regular timed increments requesting public input on
policies that should be reviewed and considered for sunset. This
process aims to ensure public input helps drive the determination of
what should be sunset.
Sections, provisions and clauses do not expire until removed from
the Code of Federal Regulations through rulemaking unless an expiration
date is otherwise noted inside a clause. The FAR Council may indicate
through rulemaking the Government's intent not
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to enforce a clause after a stated date. (see FAR 1.109(b)).
5. Class Deviations From the FAR
This proposed rule revises the definition of individual deviation
to correct an ambiguity and to make it clear that a solicitation with
multiple awards needs a class deviation and not an individual
deviation. Additional updates are being proposed to streamline the
internal Government process where agencies request and receive approval
for deviations from the FAR.
6. Specific Streamlining Changes
This rule proposes to make several streamlining changes to FAR part
1. While the requirements for OMB approval of information collections
and recordkeeping requirements remain, to enhance efficiency and
accessibility, the table listing OMB approved information collections
by applicable FAR part is now available at https://www.acquisition.gov/FAR-PRA (see FAR 1.105).
Similarly streamlined is the relocation of the table listing the
renaming of public laws as a result of the positive law codification of
Titles 40 and 41 of the United States Code at FAR 1.110, which is now
available at https://www.acquisition.gov/renamingpubliclaws.
This rule proposes to remove internal operating procedures related
to the Civilian Agency Acquisition Council and the Defense Acquisition
Regulations Council and relocate it on www.acquisition.gov, where
similar information is already shared.
This rule proposes to consolidate disparate policies related to the
contracting officer's representative (COR) into FAR 1.404, Contracting
officer's representative. This consolidation helps to more clearly
identify requirements for the designation of the COR, when a COR must
be designated, the qualifications required to be a COR, and COR
responsibilities.
7. The Removal of Acquisition 360 Voluntary Survey Provision
This rule proposes to reduce a substantial amount of nonstatutory
text in FAR part 1 including the removal of FAR provision 52.201-1,
Acquisition 360: Voluntary Survey. The requirement to implement this
survey is based on OFPP Memorandum Acquisition 360--Improving the
Acquisition Process through Timely Feedback from External and Internal
Stakeholders, dated March 18, 2015. The voluntary use of the survey has
been relocated to the FAR companion guide.
8. Relocation of Statutory Text
This rule proposes to relocate FAR 1.102-2(a)(4) to paragraph (c)
of FAR 7.201, Market research requirements, because the requirements
address communications with industry. The text being relocated is based
on requirements from Section 887 of the National Defense Authorization
Act (NDAA) for Fiscal Year (FY) 2016 (Pub. L. 114-92).
9. Retention of Policy and Procedures for Sound Procurement
This rule proposes to maintain some policy that is nonstatutory
because the policy is necessary for maintaining, publishing, or
providing direction for the operation of the FAR system. This includes
policy for the publication and code arrangement proposed to be moved
from FAR 1.105-1 to FAR 1.104, which provides instructions on where the
FAR is published in the CFR, how the FAR is numbered and who is
responsible for publishing the FAR.
Additionally, FAR conventions are proposed to be moved from FAR
1.108 to FAR 1.107. This section consolidates policies from FAR part 1
that address the usage of definitions, the ability to delegate
authority within the FAR, specific dollar thresholds, applying FAR
changes to solicitations and contracts, how statutes, executive orders,
and other policies are cited in the FAR, and clarifies who the FAR is
directing to take action.
This rule also proposes to consolidate and maintain other policies
and procedures for--
(1) Authorizing deviations from the FAR as proposed at FAR subpart
1.3,
(2) Authority and responsibilities of the contracting officer as
proposed at FAR 1.402;
(3) Designating and responsibilities of the COR as proposed at FAR
1.404;
(4) Ratification of unauthorized commitments as proposed at FAR
1.405; and
(5) Determination and findings proposed at FAR subpart 1.5.
C. Summary of Changes to FAR Part 2
1. Deletions, Revisions, Additions and Relocation of Terms and
Definitions
i. Deletion of Terms and Definitions
This rule proposes removing several words and terms from FAR 2.101
that are either no longer expected to be referenced in the FAR or are
now defined elsewhere. The words or terms being proposed for deletion
include:
Energy efficient standby power devices
Environmentally preferable
Federally controlled information system
F.o.b. . ..(for other types of F.o.b., see 47.303)
Projected average loss
Registered in the System for Award Management (SAM)
Shall
Single, Governmentwide point of entry
Sustainable acquisition
Sustainable products and services
Virgin material
Waste reduction
ii. Revisions to Existing Definitions
This rule proposes to revise the meaning of words and terms used in
FAR 2.101. These revisions are a result of changes being made to the
FAR in this revolutionary FAR overhaul (RFO) rule, FAR case 2026-001,
or in another RFO rule FAR case. Discussion related to the changes to
these terms can be found in the applicable RFO rule FAR case. The
proposed rule revises the following words or terms.
Commercial computer software
Commercial product
Commercial service
Commercially available off-the-shelf (COTS) item
Computer software
Governmentwide point of entry (GPE)
Major system
Micro-purchase
Must
Offer
Offeror
Reverse auction
Service-disabled veteran-owned small business (SDVOSB) concern
eligible under the SDVOSB Program
Simplified acquisition procedures
System for Award Management (SAM)
Technical data
iii. Incorporation of New Terms and Definitions
This rule proposes certain new words or terms along with their
meaning to be added to FAR 2.101. These changes are a result of changes
being made to the FAR in this RFO rule FAR case 2026-001, or in another
RFO rule FAR case. The words or terms and their meanings are being
added to FAR 2.101 because they will be used in more than one FAR part.
The following words or terms are being added in FAR part 2.101:
Controlled unclassified information (CUI)
Federal information system (FIS)
Information system
SAM Contract Awards Management
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iv. Relocation of Terms and Definitions
This rule proposes certain words or terms along with their meaning
to be moved from one FAR part to another FAR part. This change aligns
with FAR drafting convention which provides that if a term is used in
more than one FAR part it should be defined in FAR subpart 2.101, see
also FAR 1.107(a). If a word or term is used only once then it resides
in the applicable FAR part, subpart or section where it is used. The
following is a list of words and terms that are being proposed to be
moved to a new location within the FAR.
------------------------------------------------------------------------
Proposed new FAR
Term FAR Part location part location
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Activity Address Code........... FAR 2.101......... FAR 4.001.
Design-to-cost.................. FAR 2.101......... FAR 7.101.
Designated operational area..... FAR 2.101......... FAR 25.601-2.
Determination and findings...... FAR 1.701......... FAR 2.101.
Disaster Response Registry...... FAR 2.101......... FAR 26.101.
Energy-efficient product........ FAR 2.101......... FAR 23.101.
Energy savings performance FAR 2.101......... FAR 23.2.
contract.
Governmentwide commercial FAR 13.001........ FAR 2.101.
purchase card.
Historically black college or FAR 2.101......... FAR 26.401.
university.
Make-or-buy program............. FAR 2.101......... FAR 15.104.
Minority Institution............ FAR 2.101......... FAR 26.401.
Overtime premium................ FAR 2.101......... FAR 22.101.
Pollution prevention............ FAR 2.101......... FAR 23.401.
Qualification requirement....... FAR 2.101......... FAR 9.201.
Qualified products list (QPL)... FAR 2.101......... FAR 9.201.
State and local taxes........... FAR 2.101......... FAR 29.301.
Supporting a diplomatic or FAR 2.101......... FAR 25.601-2.
consular mission.
Value engineering............... FAR 2.101......... FAR 42.1401.
Value engineering change FAR 2.101......... FAR 42.1401.
proposal (VECP).
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2. Other Updates to Definitions
i. Proposed changes to FAR part 2 include conforming changes to
align with changes made in individual FAR parts including updating FAR
citations used within a definition and to add an acronym to a term, if
applicable. Additional changes to revise, add, remove or relocate
definitions may be necessary to make conforming changes based on
changes to other RFO rules.
ii. This rule proposes to change the meaning of the acronym ``MAC''
from ``multi-agency contract'' to mean ``multiple-award contract''.
This change aligns with the common usage of the acronym within the
procurement community.
3. Acronym List
This rule proposes to add a new subpart 2.102, Acronyms, and
abbreviations. The list of acronyms and abbreviations will be located
at https://www.acquisition.gov/far-acronyms. This resource will enhance
readability and establish a centralized repository for identifying
acronyms and abbreviations used within the FAR. Acronyms and
abbreviations will continue to be established once in each FAR part and
in provisions and clauses.
4. Threshold Adjustment
This rule proposes to adjust the threshold for defining a ``major
system''. Section 1804 of the National Defense Authorization Act (NDAA)
for Fiscal Year (FY) 2026 (Pub. L. 119-60) changes the Title 10
thresholds for ``major system''. The NDAA language addresses threshold
changes for both civilian agencies and DoD. However, the NDAA does not
appear to make the same changes to Title 41. Consequently, the
statutory thresholds described in 10 U.S.C. 3041 and 41 U.S.C. 109 are
different. This rule proposes to incorporate the thresholds as
described in section 1804 of the NDAA for both civilian agencies and
DoD because of likely congressional intent to rely on Title 10 for the
applicable thresholds.
D. Summary of Changes to FAR Part 4
1. Relocation of Requirements to FAR Part 40
This rule proposes to relocate security requirements, prohibitions
and exclusions and their related provisions and clauses from FAR part 4
to FAR part 40. For more details, refer to paragraph G of this
Discussion and Analysis section and the table under paragraph 4.e of
section VII. of this preamble.
2. Retained Part 4 Coverage
The guidance affecting the standardization of acquisition data was
retained as essential to sound procurement. As part of its ongoing
systems modernization effort, GSA has retired FPDS.gov and transitioned
to SAM.gov. All contract award data that was previously available in
FPDS.gov is now available in SAM Contract Awards Management. Material
regarding contents of contract files and other internal Government
procedures were relocated to the FAR Companion or removed to allow
agencies maximum flexibility to use technology and other tools as they
see fit.
3. Solicitation Provisions and Contract Clauses
There are no proposed changes to the provision at FAR 52.204-5,
Women-Owned Business (Other Than Small Business), and the clause at FAR
52.204-19, Incorporation by Reference of Representations and
Certifications. A minor change is proposed to the clause at FAR 52.204-
9, Personal Identity Verification of Contractor Personnel, to
standardize the subcontract paragraph.
Proposed changes to the clauses at FAR 52.204-10, Reporting
Executive Compensation; 52.204-14, Service Contract Reporting
Requirements; and 52.204-15, Service Contract Reporting Requirements
for Indefinite-Delivery Contracts, exclude applicability to contracts
for commercial acquisitions.
Proposed changes to FAR part 4 include streamlining the
registration process in SAM by only having entity level representations
and certifications in SAM. Representations and certifications that are
procurement-specific (e.g., the answer to the representation or
certification might be different for each procurement of different
products or services, rather than being ``entity-level'' such as a
question about the offeror's status) or completed by submission of an
offer will be removed from SAM and used in solicitations as prescribed
in the FAR. Accordingly, the provision at FAR 52.204-8, Annual
Representations and Certifications, will be removed. The
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FAR Council specifically invites feedback on potential impacts and
changes in burden resulting from this substantial change in business
process.
The proposed changes to FAR part 4 contemplate two clear paths for
collecting information from entities interested in obtaining Government
contracts. If SAM registration is required, the revised solicitation
provision at FAR 52.204-7, proposed to be titled ``System for Award
Management-Registration,'' and the revised contract clause at FAR
52.204-13, System for Award Management-Maintenance, consolidate entity
level information (already being collected in SAM) from five provisions
and its required maintenance from 2 clauses, respectively. If SAM
registration is not required, the new solicitation provision at FAR
52.204-XX, Offeror Identification, and the new contract clause at FAR
52.204-YY, Contractor Identification, consolidate entity level
information from five provisions and its required maintenance from 2
clauses, respectively.
This rule proposes to remove the FAR part 4 provisions and clauses
described in the following table:
------------------------------------------------------------------------
FAR provision/clause Rationale for proposed removal
------------------------------------------------------------------------
52.204-1, Approval of Contract......... Obsolete content.
52.204-3, Taxpayer Identification...... Consolidated under FAR 52.204-
7(b)(2) or 52.204-XX(c).
52.204-6, Unique Entity Identifier..... Consolidated under FAR 52.204-
7(b)(1) or 52.204-XX(b).
52.204-8, Annual Representations and Only entity level
Certifications. representations and
certifications will remain in
SAM, see FAR 4.208(c)(1)(ii)
or 52.204-7(c).
52.204-12, Unique Entity Identifier Consolidated under FAR 52.204-
Maintenance. 13(e) or 52.204-YY(b).
52.204-16, Commercial and Government Consolidated under FAR 52.204-
Entity Code Reporting. 7(b)(3) or 52.204-XX(d)(1).
52.204-17, Ownership or Control of Consolidated under FAR 52.204-
Offeror. 7(b)(3) or 52.204-XX(d)(2).
52.204-18, Commercial and Government Consolidated under FAR 52.204-
Entity Code Maintenance. 13(f) or 52.204-YY(c).
52.204-20, Predecessor of Offeror...... Consolidated under FAR 52.204-
7(b)(3) or 52.204-XX(d)(2).
52.204-22, Alternative Line Item Obsolete content.
Proposal.
------------------------------------------------------------------------
E. Summary of Changes to FAR Part 33
1. Purpose Statement
This rule proposes to add FAR 33.100, Purpose of the bid protest
system. The purpose statement sets forth objectives and expectations
for the bid protest system. The primary goals of the bid protest
process are to ensure efficient resolution of protests, minimize
disruption to contract award, correct procurement errors quickly, and
safeguard the rights of interested parties to an independent review of
the alleged violations. The process is also intended to deter abuse and
promote integrity in the FAR system. The protest process is not meant
to serve as an alternate method for offerors to obtain post-award
explanations, or debriefings, which can be addressed through other
established procedures in the FAR (e.g., FAR part 15).
2. Agency Protest Changes
This rule proposes to require contracting officers to report
protests to the head of the contracting activity, see FAR 33.104-
4(a)(4)(ii). This language was added as a step towards increasing
confidence in agency protests, increasing the ability to capture data
at the agency level on protests filed with contracting officers, and
for agency management to respond to procurement issues raised in
protests.
For protesters that elect an independent review by an official at a
level above the contracting officer, this rule proposes to allow the
disclosure of a redacted copy of the agency's final technical
evaluation of the protester's proposal and a redacted copy of the
source selection decision, see FAR 33.104-4(a)(5)(ii)(B). The
disclosure of this information is available for any type of procurement
(e.g., FAR part 8, 12, 15). Additionally, this rule proposes to allow
the protester to raise additional protest grounds, within a reasonable
time set by the independent review official. These changes are intended
to provide fuller disclosure, to build confidence in agency protests,
and resolve more protests at the agency level (see FAR 33.104-
4(a)(5)(ii)(C)).
3. Government Accountability Office Protests
This rule proposes to significantly streamline the FAR to remove
regulatory text that repeats or summarizes Government Accountability
Office (GAO) protest regulations, and instead points the contracting
officer to the applicable GAO regulations at 4 CFR part 21. These
changes make this FAR part more concise and easier to navigate for
contracting officers while minimizing the risk of discrepancies between
the different regulations and reducing the need for additional
rulemaking.
4. Changes to FAR 52.233-1, Disputes
This rule contemplates revising FAR 52.233-1, Disputes, by removing
paragraph (i) and replacing it with paragraph (i) in Alternate I. It is
believed that the language in paragraph (i) was based on the state of
law as it existed prior to the enactment of the Contract Disputes Act,
when agencies could only require performance to continue if the claim
at issue was arising under the contract. After the enactment of the
Contract Disputes Act, agencies were then able to require performance
to continue regardless of whether the claim arises under or related to
the contract.
Public comments are particularly invited on whether the removal of
paragraph (i) and replacement of paragraph (i) in Alternate I would
have any unintended consequences.
F. Summary of Changes to FAR Part 39
1. Deletion of FAR 39.105, Privacy, and 52.239-1, Privacy or Security
Safeguards
This rule proposes to remove the requirements at FAR 39.105,
Privacy and FAR clause 52.239-1, Privacy or security safeguards since
the requirements are inconsistently used and are no longer needed to
safeguard privacy or security. The FAR contains other security controls
that restrict the publication or disclosure regarding the details of
any safeguards that are Federal contract information (see FAR 52.240-5,
Covered Federal Information). Other controls exist that restrict
disclosure of certain information and provide safeguards for Federal
information systems (e.g., a system security plan is protected from
disclosure under National Institute of Standards and Technology (NIST)
control PM-1: Information Security Program Plan, and a supply chain
risk management plan is protected from disclosure under NIST control
SR-2: Supply Chain Risk Management Plan).
Further, FAR 52.239-1 does not provide sufficient specificity
regarding what Government access would be
[[Page 37555]]
allowed, under what conditions, and how such information would be
protected. Similarly, there is insufficient specificity regarding the
scope and procedures for both the Government and contractor to share
new or unanticipated threats or hazards.
2. Information and Communication Technology
This rule proposes to amend the title of FAR part 39 and the text
of FAR 39.001, Applicability, to cover information and communication
technology (ICT). The purpose of this change is to establish the scope
of this FAR part which will set the framework for future rulemaking
that will address emerging technologies. Information technology is not
broad enough to cover areas that would be included within part 39
including: operational technology, emerging technology, and information
systems.
3. NICE Workforce Framework for Cybersecurity (NICE Framework)
This rule proposes to consolidate FAR case 2019-014, Strengthening
America's Cybersecurity Workforce which was published as a proposed
rule at 90 FR 297 on January 3, 2025, into this FAR case.
Eight respondents submitted comments on the proposed rule. Several
respondents voiced support for standardizing cybersecurity workforce
requirements across the Federal Government as it provides consistent
standards for contractors and strengthens the cybersecurity workforce.
Other comments supported defining the term ``cybersecurity'' and noted
the clarity that this definition provides.
One respondent noted that the proposed updates to FAR 7.105 and FAR
12.202 were valuable but that these requirements may slow down the
acquisition process. Similarly, the respondent noted that requiring
agency documents to align with the NICE Framework ensures consistency
but cautioned about the risk of updating too frequently would be
burdensome on the workforce. This proposed rule does not incorporate
changes related to FAR 7.105 and FAR 12.202. This proposed rule aligns
with the streamlining goals of the RFO and all revisions are proposed
to be implemented in FAR part 39.
4. Position, Navigation, and Timing Services
This rule proposes to consolidate FAR Case 2024-005, Positioning,
Navigation, and Timing Services to implement a policy for acquisition
planners to consult the Federal Positioning, Navigation and Timing
Services Acquisitions Guidance, to ensure responsible use of
Positioning, Navigation and Timing (PNT) services, pursuant to section
4(e) of E.O. 13905, Strengthening National Resilience Through
Responsible Use of Positioning, Navigation, and Timing Services, dated
February 12, 2020. The E.O. was signed by the President on February 12,
2020, and published in the Federal Register at 85 FR 9359 on February
18, 2020.
i. Background
The E.O. included numerous tasks that were to be accomplished
before the FAR Council could proceed with amending the FAR, the last of
which was the Department of Homeland Security's draft of contractual
language in accordance with section 4(d) of the E.O., which was
provided in May 2024.
Consistent with section 4(e) of E.O. 13905, this rule proposes to
amend the FAR to implement a requirement for acquisition planners to
consult the Federal PNT Services Acquisitions Guidance when developing
requirements for products, systems, or services dependent on PNT
services.
The E.O. seeks to help organizations protect against the disruption
or manipulation of PNT services, particularly those organizations whose
use of PNT services is vital to the functioning of U.S. critical
infrastructure. The E.O. defines PNT services as ``any system, network,
or capability that provides a reference to calculate or augment the
calculation of longitude, latitude, altitude, or transmission of time
or frequency data, or any combination thereof.'' When PNT is used in
combination with satellites and other information (e.g., weather or
traffic data) to form a navigation system with global coverage, the
result is called a Global Navigation Satellite System (GNSS), with the
most recognizable service example being the Global Positioning System
(GPS). While PNT encompasses so much more than navigational functions,
GPS is a major component.
PNT services have become integral to the reliable and efficient
functioning of critical technology and infrastructure, including the
electrical power grid, communications infrastructure and mobile
devices, all modes of transportation, precision agriculture, weather
forecasting, and emergency response. Given the extensive reliance upon
PNT services, disruption or manipulation of these services may
adversely affect the national and economic security of the United
States and Federal agencies must take such risks into consideration
when planning for the acquisition of products, systems, and services
that integrate or utilize such services.
ii. PNT Profiles
To better enable the responsible use of PNT services, the E.O., in
section 4(a), directed the Department of Commerce to create PNT
profiles to help organizations (1) identify systems, networks, and
assets dependent on PNT; (2) identify appropriate PNT sources for such
systems; (3) detect disruption and manipulation of PNT services; and
(4) manage the risks to these systems. Accordingly, NIST, under the
Department of Commerce, produced NIST Internal Report (IR) 8323r1,
Foundational PNT Profile: Applying the Cybersecurity Framework for the
Responsible Use of Positioning, Navigation, and Timing (PNT) Services,
in January 2023.
In this foundational PNT profile, NIST mapped their cybersecurity
framework functions of identify, protect, detect, respond, and recover
to elements of responsible use of PNT services described in the E.O.
(i.e., identify PNT dependencies, identify appropriate PNT services,
detect disruption and manipulation to PNT services, and manage risks to
products and services dependent on PNT). This PNT profile provides a
robust and flexible framework for PNT users to manage risks. The PNT
profile is voluntary and intentionally generalized to enable the
development of subsequent sector-specific profiles or guidance.
iii. PNT Acquisition Guidance
The Department of Homeland Security (DHS) was tasked in section
4(d) of the E.O. with the development of contractual language regarding
PNT services for insertion in relevant Federal contracts. The
Cybersecurity and Infrastructure Security Agency (CISA), a component of
DHS, in conjunction with the Federal PNT Contract Language Development
Working Group, developed guidance to assist agencies when procuring
PNT-dependent products, systems, or services.
CISA's Federal PNT Services Acquisitions Guidance (Version 1.0),
dated February 2024, leverages the PNT profiles established in NIST's
IR 8323r1 to further aid PNT program managers, acquisition
professionals, and contractors in the assessment of their PNT
dependencies. The guidance also establishes recommendations for
appropriate levels of resiliency based upon the operational needs of
the proposed product, system, or service.
[[Page 37556]]
iv. Scope Considerations
When considering the scope of this proposed rule and the
appropriate language that would prompt relevant acquisition planners to
consult the Federal PNT Services Acquisitions Guidance, the FAR Council
harmonized potentially disparate terminology in the E.O. and utilized
the language in section 4(a) of the E.O., ``dependent on PNT
services.''
The Federal PNT Services Acquisitions Guidance provides robust
guidance to acquisition planners, and the effort entailed to understand
and apply the guidance to a specific effort is complex and requires
subject matter expertise. To apply this guidance to all products and
services ``that integrate or use'' PNT services could be interpreted
broadly. For example, a contracting officer acquiring a dozen office
chairs may recognize the commercial carrier delivering the office
chairs on behalf of the vendor utilizes a mapping service that uses GPS
to assist in navigation to the office building. In this scenario, a
contracting officer might consider whether they should work with the
requiring activity to conduct a detailed PNT dependency and
vulnerability analysis which requires significant cybersecurity
expertise, turning what should be a simple commercial transaction for
furniture into an unexpectedly burdensome exercise. This type of
application would be disproportionate and at odds with the guiding
principles of the FAR.
Conversely, a contracting officer acquiring a high-precision
weather forecasting device or service that provides critical
information for essential safety functions could expect the requiring
activity to consider PNT services implications in the requirements
documents. Federal procurement needs are extremely varied, and
exercising sound business judgment is imperative in meeting customer
needs while fulfilling policy objectives.
This rule also proposes the use of ``as appropriate'' in the
prompting to acquisition planners to provide space for exercising sound
business judgment in the best interest of the Government.
v. FAR Part 39 Updates
FAR 39.105, Positioning, navigation, and timing (PNT) services, is
added to direct agencies to use the Federal Positioning, Navigation,
and Timing Services Acquisition Guidance when acquiring products or
services dependent on PNT services. The term ``positioning, navigation,
and timing (PNT) services'' is being established under FAR 39.002,
Definitions.
G. Summary of Changes to FAR Part 40
This rule proposes revisions to FAR part 40 to merge and
consolidate regulations found in multiple FAR parts and subparts into a
single, logically organized part. The proposed changes streamline
requirements; improve national security, create a single ``do not buy''
list; reduce and harmonize over a dozen different provisions and
clauses related to security prohibitions and exclusions; add
requirements for handling controlled unclassified information; and
implement covered procurement actions.
The definition of unmanned aircraft system is being proposed to be
updated to implement the American Security Drone Act of 2023; Unmanned
Aircraft System List of Associated Elements interim rule and to include
a reference to 41 CFR 201-1.101 for the list of associated elements to
be identified by the Federal Acquisition Security Council (FASC).
1. Consolidation of Regulations
This proposed rule aims to consolidate the FAR cases listed in the
following table:
----------------------------------------------------------------------------------------------------------------
FAR case No. FAR case title Rule type FR citation FR date
----------------------------------------------------------------------------------------------------------------
2017-016....................... Controlled Unclassified Proposed.......... 90 FR 4278........ 1/15/2025
Information.
2018-017....................... Prohibition on Certain 1st Interim....... 84 FR 40216....... 8/13/2019
Telecommunications and 2nd Interim....... 84 FR 68314....... 12/13/2019
Video Surveillance
Services or Equipment.
2019-009....................... Prohibition on 1st Interim....... 85 FR 42665....... 7/14/2020
Contracting with 2nd Interim....... 85 FR 53126....... 8/27/2020
Entities Using Certain
Telecommunications and
Video Surveillance
Services or Equipment.
2019-018....................... Federal Acquisition Proposed.......... Not published..... N/A
Supply Chain Security
Act of 2018.
2020-011....................... Implementation of Interim........... 88 FR 69503....... 10/5/2023
FASCSA Orders.
2023-010....................... Prohibition on a Interim........... 88 FR 36430....... 6/2/2023
ByteDance Covered
Application.
2024-002....................... Prohibition on Unmanned Interim........... 89 FR 89464....... 11/12/2024
Aircraft Systems From
Covered Foreign
Entities.
----------------------------------------------------------------------------------------------------------------
Public comments received on these rules have been reviewed and
considered in the drafting of this proposed rule.
This rule proposes to reorganize FAR part 40 into three key
subparts: Processing Supply Chain Risk Information; Security
Prohibitions and Exclusions; and Safeguarding Information. The changes
proposed streamline requirements by merging and consolidating existing
content from FAR parts 4, 25, and 40, removing redundancies, and
improving clarity. Proposed revisions also consolidate five separate
provisions into one provision. Similarly, this proposed rule also
consolidates seven separate clauses to one clause. Reorganizing the
content and consolidating information allows contractors and the
acquisition workforce to better understand how current prohibitions are
related, reducing the burden on the Government workforce and
contractors while improving national security.
2. Updates to Telecommunications and Video Surveillance Equipment
Prohibition
The FAR Council issued two interim rules (see FAR cases 2018-017
and 2019-009) to implement sections 1(a)(A) and 1(a)(B) of Section 889
of the NDAA for FY 2018. Respondents submitted comments in response to
these interim rules. Many commenters recommended clarifying, updating,
or creating defined terms to aid with implementation. There were also
multiple commenters who expressed concern with the burden the rules
imposed on the public and Government. To address the public comments
received and reduce burden on both the public and Government, this rule
proposes to incorporate the following updates to the prohibition
requirements from the interim rules:
i. Covered Telecommunications Equipment or Services Definition
Update the definition of ``covered telecommunications equipment or
services'' to clarify what ``produced''
[[Page 37557]]
means within the context of this definition. See FAR 40.201 and FAR
52.240-3, Security Prohibitions and Exclusions.
ii. Critical Technology Definition
Update the definition of ``critical technology'' to a technology in
whose absence a system cannot adequately operate or function. See FAR
52.240-3(a).
iii. New Definitions
Add new definitions for ``system,'' ``telecommunications
equipment,'' ``telecommunications services,'' ``video surveillance
equipment,'' and ``video surveillance services.'' See FAR 40.201 and
FAR 52.240-3. These definitions align with the definition of
telecommunications at Defense Federal Acquisition Regulation Supplement
(DFARS) 239.7401.
iv. Prohibition Exceptions
Add clarity regarding the scope of the prohibition exceptions. See
FAR 52.240-3(b)(3).
v. Scope of ``Use of Covered Telecommunications Equipment or Services''
Within Prohibition
To address questions regarding what activities are covered by the
prohibition, this rule clarifies that the following activities are not
individually considered use of covered telecommunications equipment or
services: commercial sales, maintenance, testing services, warranty
services, and employee's use of personal equipment. See FAR 52.240-
3(d)(1).
3. Harmonization of Requirements
This proposed rule harmonizes requirements for security
prohibitions and exclusions. Changes are proposed to align standards
for reasonable inquiry, reporting time frame and report requirements.
Previously, some of the prohibitions did not include a reasonable
inquiry standard that clarified what level of effort is required to
determine if there are any prohibited products or services. Also, the
prohibitions that had reasonable inquiry standards used slightly
different language between the prohibitions. This created more
uncertainty for offerors and contractors while adding liability risk
for industry. Under this proposed rule, there would be just one
reasonable inquiry standard across the prohibitions that clarifies that
an offeror or contractor does not need to conduct an internal or third-
party audit. Consistent application of the standard reduces liability
risk for offerors and contractors by clarifying that third party audits
are not required and due diligence does not require gathering
information outside their possession. See FAR 52.240-2(c) through (g)
and FAR 52.240-3(g) and (j)(2).
Another inconsistency across various security prohibitions and
exclusions is the various disclosure and reporting requirements. This
rule proposes to standardize the report and disclosure timeframe to 72
hours from discovery with just one required report. This change aligns
with the 72 hours for incident reporting which is the reporting
standard in the Cyber Incident Reporting for Critical Infrastructure
Act of 2022 and the DoD CUI incident reporting requirements in DFARS
252.204-7012. Providing one standard timeframe for prohibitions and
incident reporting simplifies reporting for offerors and contractors.
This proposed rule also harmonizes the disclosure and reporting
elements required in each report. This reduces burden and simplifies
compliance for offerors and contractors who will have to spend less
time deciphering unique reporting requirements for each prohibition.
4. Covered Procurement Actions
This rule proposes to implement section 203 of the Federal
Acquisition Supply Chain Security Act of 2018 (Title II of the SECURE
Technology Act, Pub. L. 115-390, Dec. 21, 2018 (see 41 U.S.C. 4713)).
This statute authorizes agencies to take agency specific exclusion
actions called ``covered procurement actions.'' The specific exclusion
actions allowed by the statute are defined in this rule as part of the
definition of covered procurement action. The rule clarifies that
agencies must establish procedures to ensure compliance with the
requirements in 41 U.S.C. 4713, and that the use of this authority
applies to a single covered procurement action or a class of covered
procurement actions.
This rule proposes to add requirements within the consolidated
provision at FAR 52.240-2 at paragraphs (b)(3) and (e) that would
require an offeror to represent that they have conducted a reasonable
inquiry, and that the offeror does not propose to provide or use in
response to a solicitation any products or services that are prohibited
by an applicable covered procurement action in effect on the date the
solicitation was issued, except as waived by the solicitation, or as
disclosed by the offeror.
This rule also proposes to add requirements to the consolidated
clause at paragraph (f) in FAR 52.240-3. FAR 52.240-3(f) prohibits
contractors from providing or using any products or services in
performance of the contract that are prohibited by an applicable
covered procurement action that has been identified in the solicitation
or posted in SAM at www.sam.gov, unless the Government has issued an
applicable waiver. Under the authority of 41 U.S.C. 4713, covered-
procurement actions are specific agency decisions with respect to
supply chain risk, and do not apply to micro-purchases. The statute
requires a procurement to include a supply chain risk requirement or
evaluation factor before a covered procurement action can apply and
micro-purchases do not have a supply chain risk requirement or
evaluation factor.
5. Controlled Unclassified Information (CUI) Requirements
Changes are proposed to amend the FAR to implement the National
Archives and Records Administration's (NARA) Controlled Unclassified
Information Program enacted under an Executive Order entitled
Controlled Unclassified Information. These FAR changes are proposed to
implement NARA's final rule on the Federal CUI Program as it relates to
performance under Federal contracts.
This rule proposes to create a common mechanism, the Standard Form
XXX, Controlled Unclassified Information (CUI) Requirements, to enable
a uniform process for communicating the information contractors must
manage and safeguard as well as identify where a CUI incident must be
reported and when there are CUI incident reporting requirements that
differ from or are in addition to those in the clause at FAR 52.240-
7(e). Currently laws, Federal regulations, and Government-wide policies
already mandate these protections, but there is not a standard way
these requirements are identified and shared with contractors.
On January 15, 2025, the FAR Council issued FAR Case 2017-016,
Controlled Unclassified Information, as a proposed rule at 90 FR 4278.
Respondents submitted comments in response to this proposed rule.
Multiple respondents submitted comments regarding the CUI incident
reporting timeline. Based on these comments, the timeline for reporting
CUI incidents has been updated in this proposed rule to 72 hours from
discovery which aligns with related incident reporting requirements
(e.g., DFARS 252.204-7012, Cyber Incident Reporting for Critical
Infrastructure Act of 2022) and ensures contractors have sufficient
time to provide accurate information and
[[Page 37558]]
determine whether the event qualifies as a CUI incident. The rule has
been updated so that the contractor must submit within the first report
as many of the applicable data elements that are available at the time.
If the first report does not contain all of the applicable data
elements or some of the information changes after the investigation is
substantially complete, the contractor must submit a subsequent report
containing the updated or new information in accordance with FAR
52.240-7(e)(2).
This rule also incorporates the following significant updates to
the CUI requirements that will reduce burden on both the public and
Government. Additionally, the clause at FAR 52.240-YY, Identifying and
Reporting Information That Is Potentially Controlled Unclassified
Information, has been deleted. These changes were based on the public
comments received on the proposed rule published at 90 FR 4278. The FAR
Council is seeking additional comments on these proposed changes.
CUI Incident Reporting Location for CUI in a Non-Federally-
controlled Facility. The location for incident reporting for Department
of Defense contracts is https://dibnet.dod.mil and for non-Department
of Defense contracts is to CISA at https://www.cisa.gov/reporting-cyber-incident. The contractor must also provide a notification to the
contracting officer that a CUI incident report has been submitted. For
any CUI incident involving a FedRAMP authorized cloud computing service
provider that has reported the CUI incident in accordance with FedRAMP
Incident Communication Procedures, the contractor is not required to
submit any additional report beyond following the FedRAMP Incident
Communication Procedures.
CUI Incident Reporting Subcontractor Requirements. The
subcontractor reporting in the rule has been updated to have the
subcontractor report directly to the Government and provide a
notification to the contracting officer and next higher tier contractor
(if applicable) in accordance with FAR 52.240-7(e)(2).
CUI Incident Reporting Scope. The definition of CUI incident has
been updated to only require unauthorized disclosures, improper
modifications, or improper destruction of CUI, in any form or medium,
or unauthorized access to the information system on which the CUI
resides. The definition has also been updated to clarify that improper
handling of CUI (e.g., unmarked or mismarked CUI) is not a CUI incident
unless the improper handling has resulted in unauthorized disclosure,
improper modification, or improper destruction of CUI. The rule has
also been updated to add an exception for any CUI incident involving a
FedRAMP authorized cloud service provider that is reported in
accordance with FedRAMP incident communication procedures.
Reporting of Unmarked or Mismarked CUI. This rule proposes to
extend the reporting time frame to 72 hours from discovery to align
with related incident reporting requirements (e.g., DFARS 252.204-7012,
Cyber Incident Reporting for Critical Infrastructure Act of 2022) and
ensure contractors have sufficient time to provide accurate
information.
Training. This rule proposes to remove the requirement for specific
training that mandated a one-size-fits-all approach for how contractors
must train their employees. The updated approach provides flexibility
similar to other FAR requirements regarding how contractors ensure
their employees will have the knowledge, skills, and abilities to
comply with the requirements of this rule.
Contractor Liability. The rule has been updated to remove the
language specifying contractor liability for CUI incidents.
Contractor Identification of Proprietary Information. The
prescriptive requirements to identify contractor proprietary
information have been removed from the CUI provision and clause,
because other parts of the FAR already detail requirements for handling
such information (e.g., FAR 3.104-4 and 52.215-1(e)).
Contractor Proprietary Information Status as CUI. This rule
proposes to update the definition of CUI to add an exception for
information a contractor creates or possesses that a law, regulation,
or Governmentwide policy does not specifically require the contractor
to handle using safeguarding or dissemination controls.
Standard Form XXX. This rule proposes to update the SF XXX to add
information regarding the safeguarding and/or dissemination authority
and the indicator for identifying each category of CUI. This update
will make it easier for contractors to understand the specific types of
CUI that will be involved, including the specific controls. Additional
conforming updates have been made to the SF XXX to conform with updates
in the clause at FAR 52.240-7 and provision at FAR 52.240-6 (e.g.,
removal of training requirements). To reduce burden and ensure
uniformity across the Government, SF XXX was also updated to identify
the applicable organizational defined parameters for NIST 800-171
Revision 3. These organizationally defined parameters are necessary to
ensure contractors only have to follow one standardized requirement
across Government. The Government intends to harmonize these
organizationally-defined parameters to ensure contractors can follow
one standardized approach for protecting CUI across agencies.
Consequently, this rule aligns to the values that will be codified in
32 CFR part 170 via DoD rulemaking. Current definitions for these
values may be found at https://dowcio.war.gov/Portals/0/Documents/CMMC/OrgDefinedParmsNISTSP800-171.pdf.
Enhanced Controls Using NIST SP 800-172. This rule proposes to
update the clause at FAR 52.240-7 to clarify that specific requirements
within NIST SP 800-172 will only apply when identified by the agency
for a critical program or high-value asset. The Government intends to
harmonize these organizationally-defined parameters to ensure
contractors can follow one standardized approach for protecting CUI
across agencies. Consequently, this rule aligns with the values at 32
CFR 170.14.
Potential Inconsistent Requirements Between This Rule and Other
Regulations. This rule proposes to add a new paragraph (f) to FAR
clause 52.240-7 that states contractors must notify the contracting
officer within 72 hours of determining that they are not able to comply
with any of the requirements in this clause due to conflict with
another law or regulation. This will allow flexibility for agencies to
work with contractors on alternative controls where another domestic or
foreign law may prevent compliance with a specific requirement in the
clause.
Government Access to Contractor Facilities and Systems. This rule
proposes to remove the compliance requirements at FAR 52.240-7(e).
Government Validation Actions. This rule proposes to remove the
compliance section in the clause that contained the validation
requirements since specific procedures for validation do not need to be
specified in this rule. Normal contract administration procedures for
validating compliance with requirements are sufficient.
CUI Definition. This rule proposes to update the definition for CUI
to remove the exclusions for covered Federal information and classified
information since these exclusions are not necessary for these terms.
Cloud Services Controls. The rule proposes to update FAR 52.240-7
to state that if the Contractor uses a cloud service provider to store,
process, or
[[Page 37559]]
transmit any CUI identified in SF XXX, the cloud computing service
provider must meet security requirements equivalent to those
established by the Government for FedRAMP Moderate baseline. This is
meant to provide more flexibility to the contractor while ensuring the
contractor implements the applicable security requirements.
Patents. This proposed rule removes updates to patents in FAR part
27.
Subcontract Flow Down. This proposed rule updates the subcontractor
flowdown at FAR 52.240-7(g) to clarify that there is no requirement to
include the SF XXX or modified version of the SF XXX. Contractors can
decide how best to flow down the requirements in the SF XXX.
Virtual Desktop Infrastructure. This proposed rule updates FAR
52.240-7(d)(3)(ii)(A) to state that an endpoint hosting a virtual
desktop infrastructure (VDI) client configured to prevent any
processing, storage, or transmission of CUI beyond the keyboard/video/
mouse sent to the VDI client is considered an out-of-scope asset.
Telecommunication Providers Transmitting CUI. The rule has been
updated to exempt commercial communications networks that transmit
government and non-government information using the same equipment,
protocols, and methodologies, without regard to the source or recipient
of the information (see FAR 52.240-7(d)(3)(ii)(A)).
H. Summary of Changes to FAR Part 52
1. FAR 52.000, 52.1 and 52.3. This proposed rule updates FAR
52.000, Scope of part, and 52.3, Provision and Clause Matrix to remove
the text and mark it as reserved. FAR 52.1, Instructions for Using
Provisions and Clauses, is being proposed to be revised to streamline
and remove nonstatutory and redundant text. The text in FAR
52.101(b)(1), concerning the numbering of FAR provisions and clauses,
is being proposed to be moved to FAR 1.104(b), where other details
about the FAR's arrangement and numbering are provided. Additionally,
the text at FAR 52.101(b)(2), which addresses provisions or clauses
supplementing the FAR, is proposed for relocation to FAR 1.201(a)(1).
This move aims to consolidate information related to agency acquisition
regulations.
2. FAR Part 52 renumbering of provisions and clauses. As a result
of the RFO, the FAR Council is considering establishing a new FAR
subpart in part 52, and relocating and renumbering all provisions and
clauses under this new subpart. This means, if subpart 52.4 was used,
all provisions and clauses would begin with 52.4 instead of 52.2. This
change is anticipated to prevent confusion and increase compliance by
creating a clear distinction between versions of a provision or clause
prior to the RFO. Other benefits include avoiding potential clause
numbering conflicts and information system and data collection impacts.
The FAR Council welcomes comments on the potential impact of such a
change on contractors, government personnel, and other stakeholders.
I. Summary of Changes to FAR Part 53
This rule proposes to relocate the content from the existing FAR
part 53 to a new FAR subpart 1.6, and mark FAR part 53 as reserved. For
more details, refer to paragraph B.2 of this Discussion and Analysis
section.
III. Applicability to Contracts and Subcontracts Valued at or Below the
Simplified Acquisition Threshold and for Commercial Products and
Commercial Services
The following sections address the applicability of provisions and
clauses prescribed in parts 1, 2, 4, 33, and 40 to solicitations and
contracts valued at or below the simplified acquisition threshold (SAT)
and those for the acquisition of commercial products, commercially
available off-the-shelf (COTS) items, and commercial services.
Prescriptions for provisions and clauses in these parts have been
updated to reflect applicability to commercial acquisitions.
A. Contracts and Subcontracts Valued at or Below the Simplified
Acquisition Threshold
This proposed rule, if finalized, does not alter the prescriptions
of provisions and clauses included in this proposed rule to change
their applicability to contracts and subcontracts valued at or below
the SAT.
This proposed rule, if finalized, would consolidate the provisions
at FAR 52.204-3, Taxpayer Identification; 52.204-6, Unique Entity
Identifier; 52.204-16, Commercial and Government Entity Code Reporting;
52.204-17, Ownership or Control of Offeror; and 52.204-20, Predecessor
of Offeror; under the revised provision at FAR 52.204-7, if SAM
registration is required; or a new solicitation provision at FAR
52.204-XX, Offeror Identification, if SAM registration is not required.
This proposed rule, if finalized, would consolidate the clauses at
FAR 52.204-12, Unique Entity Identifier Maintenance; and 52.204-18,
Commercial and Government Entity Code Maintenance; under the revised
clause at FAR 52.204-13, if SAM registration is required; or a new
contract clause at FAR 52.204-YY, Contractor Identification, if SAM
registration is not required. The consolidated FAR provisions and
clauses would continue to apply to contracts valued at or below the
SAT.
This proposed rule, if finalized, would transfer the provision(s)
at 52.204-24, Representation Regarding Certain Telecommunications and
Video Surveillance Services or Equipment, 52.204-26, Covered
Telecommunications Equipment or Services--Representation, 52.204-29,
Federal Acquisition Supply Chain Security Act Orders--Representation
and Disclosures, 52.225-20, Prohibition on Conducting Restricted
Business Operations in Sudan--Certification, and 52.225-25, Prohibition
on Contracting with Entities Engaging in Certain Activities or
Transactions Relating to Iran--Representation and Certifications and
consolidate the requirements into a new provision at FAR 52.240-2,
Security Prohibitions and Exclusions- Representations and
Certifications.
Additionally, this proposed rule, if finalized, would transfer the
clauses(s) at 52.204-23, Prohibition on Contracting for Hardware,
Software, and Services Developed or Provided by Kaspersky Lab Covered
Entities, 52.204-25, Prohibition on Contracting for Certain
Telecommunications and Video Surveillance Services or Equipment,
52.204-27, Prohibition on a ByteDance Covered Application, 52.204-28,
Federal Acquisition Supply Chain Security Act Orders--Federal Supply
Schedules, Governmentwide Acquisition Contracts, and Multi-Agency
Contracts, 52.204-30, Federal Acquisition Supply Chain Security Act
Orders--Prohibition, 52.225-13 Restrictions on Certain Foreign
Purchases, and 52.240-1 Prohibition on Unmanned Aircraft Systems
Manufactured or Assembled by American Security Drone Act--Covered
Foreign Entities and consolidate the requirements into a new clause at
FAR 52.240-3, Security Prohibitions and Exclusion. The provision and
clause would continue to apply to contracts and subcontracts valued at
or below the SAT. See section II.G.4. of this preamble.
This proposed rule, if finalized, will also implement the
requirements of section 203 of the Federal Acquisition Supply Chain
Security Act of 2018 (Title II of the SECURE Technology Act, Pub. L.
115-390, Dec. 21, 2018 (see 41 U.S.C. 4713)) in the provision at FAR
[[Page 37560]]
52.240-2, Security Prohibitions and Exclusions--Representations and
Certifications, and the clause at FAR 52.240-3, Security Prohibitions
and Exclusions. 41 U.S.C. 1905 governs the applicability of laws to
contracts valued at or below the SAT. Section 1905 exempts contracts
and subcontracts valued at or below the SAT from certain provisions of
law unless the Federal Acquisition Regulatory Council (FAR Council)
makes a written determination that doing so would not be in the best
interest of the Federal Government. The FAR Council intends to make a
determination to apply this statute to acquisitions valued at or below
the SAT. Covered procurement actions, which are specific agency
decisions with respect to supply chain risk executed under the
authority in 41 U.S.C. 4713, will not be taken with respect to micro-
purchases, since the statute requires a procurement to include a supply
chain risk requirement or evaluation factor before a covered
procurement action can apply and micro-purchases do not have a supply
chain risk requirement or evaluation factor. See section II.G.4. of
this preamble.
B. Contracts and Subcontracts for Commercial Products, Commercially
Available Off-The-Shelf Items, and Commercial Services
41 U.S.C. 1906 governs the applicability of laws to contracts for
the acquisition of commercial products and commercial services and
gives the FAR Council the authority to determine to apply a law to
contracts or subcontracts for the acquisition of commercial products
and commercial services. 41 U.S.C. 1907 exempts contracts for
commercially available off-the-shelf (COTS) items from certain
provisions of law unless the Administrator for Federal Procurement
Policy determines that doing so would not be in the best interest of
the Federal Government.
Section 839 of the John S. McCain National Defense Authorization
Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232) required the FAR
Council and the Administrator of Federal Procurement Policy to review
prior determinations under 41 U.S.C. 1906 and 41 U.S.C. 1907, as well
as the applicability of provisions and clauses to contracts and
subcontracts for commercial products, COTS items, and commercial
services that do not implement statute or Executive Order, and propose
amendments to the FAR to eliminate or exempt such requirements from
commercial acquisitions, unless there are specific reasons to retain
particular requirements.
In accordance with section 839 of the NDAA for FY 2019 and their
authorities under 41 U.S.C. 1906 and 1907, the FAR Council reviewed the
applicability of the provisions and clauses associated with the FAR
parts covered by this proposed rule.
The following table reflects the FAR Council and Administrator of
Federal Procurement Policy's proposed determination regarding the
applicability of the provisions and clauses to solicitations and
contracts for commercial products, COTS items, and/or commercial
services. In making proposed applicability determinations, the FAR
Council considered factors such as whether the provision or clause
advances national security or economic security, contributes to the
resilience of contractors and subcontractors in the federal
marketplace, or advances uniformity and clarity in the performance of
basic functions that are essential to sound procurement.
Accordingly, this proposed rule, if finalized, would revise
provision and clause prescriptions to clearly reflect applicability to
commercial acquisitions as outlined in the table. An ``X'' in the
following table indicates the provision or clause will apply to that
category of commercial acquisition, as prescribed:
----------------------------------------------------------------------------------------------------------------
Commercial Commercial
Provision/clause No. Title products services COTS items
----------------------------------------------------------------------------------------------------------------
52.201-2.......................... Computer Generated Forms. X X X
52.202-1.......................... Definitions.............. X X X
52.204-5.......................... Women-Owned Business X X X
(Other Than Small
Business).
52.204-7.......................... System for Award X X X
Management--Registration.
52.204-7 Alt I.................... System for Award X X X
Management--Registration.
52.204-9.......................... Personal Identity X X ...............
Verification of
Contractor Personnel.
52.204-10......................... Reporting Executive ............... ............... ...............
Compensation and First-
Tier Subcontract Awards.
52.204-13......................... System for Award X X X
Management--Maintenance.
52.204-14......................... Service Contract ............... ............... ...............
Reporting Requirements.
52.204-15......................... Service Contract ............... ............... ...............
Reporting Requirements
for Indefinite-Delivery
Contracts.
52.204-19......................... Incorporation by X X X
Reference of
Representations and
Certifications.
52.204-XX......................... Offeror Identification... X X X
52.204-YY......................... Contractor Identification X X X
52.233-1.......................... Disputes................. X X X
52.233-2.......................... Service of Protest....... X X X
52.233-3.......................... Protest after Award...... X X X
52.233-3 Alt I.................... Protest after Award...... ............... ............... ...............
52.233-4.......................... Applicable Law for Breach X X X
of Contract Claim.
52.240-2.......................... Security Prohibitions and X X X
Exclusions--Representati
ons and Certifications.
52.240-3.......................... Security Prohibitions and X X X
Exclusions.
52.240-3 Alt I.................... Security Prohibitions and X X X
Exclusions.
52.240-4.......................... Classified information... X X X
52.240-4 Alt I.................... Classified information... ............... ............... ...............
52.240-4 Alt II................... Classified information... ............... X ...............
52.240-5.......................... Covered Federal X X ...............
Information Systems.
52.240-6.......................... Notice of Controlled X X ...............
Unclassified Information.
52.240-7.......................... Controlled Unclassified X X ...............
Information.
----------------------------------------------------------------------------------------------------------------
[[Page 37561]]
The FAR Council also reviewed subcontract flow down requirements in
clauses associated with the FAR parts covered by this proposed rule.
The following table reflects the FAR Council and Administrator of
Federal Procurement Policy's proposal regarding whether those clauses
flow down to subcontracts for commercial products, COTS items, and/or
commercial services. This proposed rule, if finalized, would revise the
subcontract paragraphs in these clauses to clearly state whether the
clause flows down to commercial subcontracts, as outlined in the table.
An ``X'' in the following table indicates the provision or clause will
apply to subcontracts for that category of commercial subcontracts, as
described in the clause:
----------------------------------------------------------------------------------------------------------------
Commercial Commercial
Clause No. Title products services COTS items
----------------------------------------------------------------------------------------------------------------
52.204-9.......................... Personal Identity X X ...............
Verification of
Contractor Personnel.
52.204-14......................... Service Contract ............... ............... ...............
Reporting Requirements.
52.204-15......................... Service Contract ............... ............... ...............
Reporting Requirements
for Indefinite-Delivery
Contracts.
52.240-3.......................... Security Prohibitions and X X X
Exclusions.
52.240-3 Alt I.................... Security Prohibitions and X X X
Exclusions.
52.240-4.......................... Classified information... X X X
52.240-4 Alt I.................... Classified information... X X X
52.240-4 Alt II................... Classified information... X X X
52.240-5.......................... Covered Federal X X ...............
Information Systems.
52.240-7.......................... Controlled Unclassified X X ...............
Information.
----------------------------------------------------------------------------------------------------------------
IV. Expected Impact of the Rule
The intended impact of the RFO, as stated in E.O. 14275, is to
restore the Government's ability to ``deliver on a timely basis the
best value product or service to the customer, while maintaining the
public's trust and fulfilling public policy objectives.'' Each of the
RFO rulemakings is designed to contribute to this impact by emphasizing
mission first, by aligning acquisition activities directly to achieving
the agency's overarching objectives and serving the public interest and
elevating the importance of fiscal responsibility. The proposed RFO
rules focus on three goals in particular: (1) timely acquisition and
delivery, (2) lower cost and accountability in all spending, and (3)
increased competition.
Timeliness. Timely acquisition and delivery are essential for
mission success. To this end, RFO rules propose to eliminate mandates
that unnecessarily interfere with agency discretion to determine the
best way to procure products and services. The proposed RFO rules
highlight more clearly streamlined and simplified authorities that
allow buyers to use their time more efficiently and are expected to
reduce time between solicitation and award. The proposed RFO rules are
expected to make it easier for contracting officers to leverage
commercial practices that are familiar to the commercial marketplace.
This is expected to make it easier for sellers to engage and respond to
Government solicitations more rapidly.
Lower cost. E.O. 14271, Ensuring Commercial, Cost-Effective
Solutions in Federal Contracts (April 15, 2025), directs the Government
to utilize, to the maximum extent practicable, the commercial
marketplace and the innovations of private enterprise to provide
better, more cost-effective services to taxpayers, as envisioned by the
Federal Acquisition Streamlining Act. The procurement of custom
products and services where a suitable or superior commercial solution
would have fulfilled the Government's needs has resulted in avoidable
waste to the detriment of American taxpayers.
To address these concerns, consistent with associated
responsibilities in section 839 of the John S. McCain National Defense
Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232),
the FAR Council reviewed prescriptions for provisions and clauses to
ensure all prescriptions are clear regarding their applicability to
acquisitions for commercial products and services. Currently, many
prescriptions do not specify applicability to commercial acquisitions
and leave the applicability determination to contracting officer
interpretation. By specifically stating when a provision or clause can
be applied to commercial acquisitions, proposed RFO rules should
decrease the likelihood of inclusion of provisions and clauses in
commercial acquisitions that are not required by law and drive greater
consistency in the terms and conditions used in these contracts. In
turn, these changes should increase the participation of commercial
sellers, who are unwilling or unable to manage the cost of complying
with noncommercial requirements, and also improve taxpayer access to
affordable commercial solutions.
Some RFO rules propose to delete requirements placed on commercial
or noncommercial sellers that are not related to performance of the
contract, drive up cost without attendant performance benefits, and may
misdirect efforts away from innovation, investment and economic growth.
Greater emphasis on timeliness should reduce bidders' carrying costs,
enabling them to pass those savings on to customers through lower
prices.
Increased competition. Since enactment of the Competition in
Contracting Act of 1984 (Title VII of Pub. L. 98-369), competition has
been the cornerstone of the Federal acquisition system. The benefits of
competition are well established: competition saves money for the
taxpayer, improves contractor performance, curbs fraud, and promotes
accountability for results. Competition also drives contractor
resilience and positions the U.S. market to develop a strategic
advantage for the nation.
According to data in the SAM Contract Awards Management, roughly 45
percent of contract dollars were awarded in FY 2025 either without
competition or with competition that received only one offer. Of equal
concern, the Federal marketplace has seen a significant decline over
the past 20 years in the number of businesses--especially small
businesses--participating in the Federal supplier base. Studies suggest
that high compliance costs lead to the misallocation of resources away
from more profitable activities and discourage innovation, investment,
and economic growth (Council of Economic Advisers, Executive Office of
the President. June 2025. The Economic Benefits of Current Deregulatory
Policies. https://www.whitehouse.gov/wp-content/uploads/2025/03/The-
Economic-Benefits-of-Current-
[[Page 37562]]
Deregulatory-Efforts.pdf). This may shelter incumbent contractors and
stifle competition, reducing startup activity and job formation.
The RFO rules seek to increase participation in agency competitions
and the resilience of the Federal supplier base, which includes
commercial entities, small businesses, manufacturers, and
nontraditional suppliers. The RFO will achieve this outcome by removing
regulatory mandates that are not rooted in statute or essential to
sound procurement, promoting greater reliance on practices that reduce
transaction costs, and improving the quality of communications with
offerors and potential offerors. Access to a broader range of solutions
in a more dynamic marketplace will drive better return for each
taxpayer dollar spent and increase taxpayer confidence in the Federal
acquisition system.
The Government has conducted a regulatory impact analysis (RIA) for
the RFO rulemaking inclusive of this proposed rule for FAR parts 1, 2,
4, 33, 40 and 53. The RIA includes a discussion of the anticipated
effects of the rulemakings as follows:
1. FAR Part 1
This proposed rule, if finalized, is not expected to have a
significant impact on contractors or subcontracts. The proposed changes
to FAR part 1 are primarily internal Government procedures.
Guiding principles. FAR part 1 revises the guiding principles for
the entire FAR system and sets the tone for the revolutionary FAR
overhaul. The FAR now emphasizes the importance of meeting the agency's
mission first efficiently and effectively. By prioritizing the
efficient and effective achievement of agency missions, the revision is
expected to streamline decision-making and better align acquisition
outcomes with strategic Government goals.
The proposed changes also recognize the value of timely
acquisitions balanced with encouraging innovation, promoting merit and
meeting mission ensures taxpayer dollars are being spent effectively,
which benefits both Government and industry. The explicit recognition
of timely acquisitions, balanced with encouraging innovation and merit,
is a benefit that fosters a more dynamic and responsive marketplace.
This strategic balance is intended to drive better value and more
effective stewardship of taxpayer dollars.
The retention and stronger emphasis on maximizing commercial
products and commercial services will ensure the Government leverages
the full capabilities of the commercial sector.
Regulatory sunset. This proposed rule establishes a process for the
FAR Council to periodically evaluate the non-statutory requirements
retained in the FAR. This is expected to create burden for the FAR
Council to conduct reviews and issue notices for public comment.
However, it is expected to provide benefits to contractors and create a
more agile FAR that keeps pace with changes in technology and the
Federal marketplace. By requiring non-statutory rules to be
periodically re-evaluated, it ensures that regulations remain
necessary, clear, and relevant. Periodic re-evaluation also encourages
the FAR Council to assess whether the expected benefits or costs
associated with a provision have increased or decreased due to changes
in technology or other relevant factors. During this process the costs
and benefits of any action will be assessed as part of the rulemaking.
Streamlining. The streamlining and removal of the table listing OMB
approved information collections and the table listing the renaming of
public laws as a result of the positive law codification from the FAR
to www.acquisition.gov, enhance accessibility and reduce the
administrative complexity associated with the FAR. This shift from a
static text to a system pointing to live resources means that updates
can occur without the lengthy rulemaking process, ensuring that
information stays current, which ultimately makes it easier and faster
for contractors to do business with the Government.
2. FAR Part 2
This proposed rule, if finalized, is not expected to have a
significant impact on contractors or subcontracts.
The proposed changes to FAR part 2 are intended to (1) remove terms
that are no longer expected to be used in the FAR; (2) make revisions
to the meaning of existing terms; (3) add new terms that are intended
to be used in multiple FAR parts; (4) relocate certain terms to another
FAR part where the term is used; and (5) create an acronym list. These
changes are expected to benefit both industry and the Government by
enhancing readability of the FAR.
3. FAR Part 4
The proposed changes to part 4 are expected to have a significant
positive impact on both industry and the Government.
Reducing industry burden by not applying the following
clauses to commercial contracts: FAR 52.204-10, 52.204-14, and 52.204-
15.
Streamlining and clarifying the collection of information
from entities interested in obtaining Government contracts whether SAM
registration is required or not.
Reducing burden by consolidating 5 separate solicitation
provisions into 2 provisions, FAR 52.204-7 when SAM registration is
required or FAR 52.204-XX when SAM registration is not required.
Streamlining SAM registration by only having entity level
representations and certifications in SAM.
For the Government, the changes will result in:
Simplified Federal procurement.
Improved procurement outcomes through more accurate and
traceable terms and conditions that are specific to each individual
procurement.
For industry, the changes will result in:
A SAM registration process that is more efficient and
easier to navigate.
Reduced administrative burden and fewer requests to update
company information in SAM once procurement-specific representations
and certifications are moved to the individual solicitations.
4. FAR Part 33
This proposed rule, if finalized, is not expected to have a
significant impact on contractors or subcontracts. The proposed changes
to FAR part 33 more clearly describe the purpose of protests, encourage
more disclosure of information at the agency protest level, and
streamline General Accountability Office (GAO) protest procedures.
These changes are intended to benefit and reduce burden on both
Government and contractors.
A. Purpose Statement
This proposed rule establishes a purpose statement of the bid
protest system (see FAR 33.100). Establishing a clear purpose statement
for the bid protest system is fundamental to maintaining a fair and
transparent bid protest system because it safeguards interested
parties' rights to an independent review while promoting integrity,
competition, and accountability in the FAR system. This clarity of
purpose also serves to deter and discourage abuse, thereby reducing
frivolous protests and minimizing disruption to the award process.
B. Agency Protest Enhancements
Agency protest enhancements are being proposed in this rule,
including requiring contracting officers to report
[[Page 37563]]
protests to the head of the contracting activity. This is expected to
create additional burden on agencies to capture and track this
information. However, this information is expected to result in
improved economy and efficiency in Federal procurement in the long-
term. Capturing and tracking this information increases agency
awareness of protest issues and enables the Government to
systematically elevate protest issues, and more effectively address
concerns raised by protesters. This internal reporting mechanism
strengthens the agency's ability to capture more comprehensive protest
data, which is essential for informed decision making. For example,
this data will enable agency management to identify agency-specific
trends in protest issues and develop agency-wide actions to address
them. Taken together this enhanced transparency and management
oversight directly increases protestor confidence in the fairness and
responsiveness of the agency protest process.
For protests reviewed above the contracting officer, this rule
proposes a significant enhancement by allowing the disclosure of a
redacted copy of the agency's final technical evaluation of the
protester's proposal and a redacted copy of the source selection
decision. This disclosure will increase transparency and build
credibility in the agency protest process. Additionally, producing
these documents can reduce the number of protest grounds or render the
protest moot. Most protests are filed with limited information. Insight
into their evaluation and the award decision replaces guesswork with
facts, eliminating the ``information gap'' which could lead to the
withdrawal or dismissal of the protest. This coupled with the existing
benefits of faster protest resolution time for agency protests, (35
days for agency protests versus 100 or more days for GAO protests) are
expected to reduce disruptions in the acquisition process. For example,
because protest of a contract award generally requires the agency to
stay performance of the awarded contract pending resolution of the
protest, faster protest resolution enables the agency to benefit from
contract performance sooner. Consequently, these benefits are expected
to lead to a reduction in litigation costs for both the Government and
industry.
C. Streamlining Government Accountability Office (GAO) Protest
Regulatory Text
This proposed rule removes regulatory text that repeats or
summarizes GAO protest regulations and instead points contracting
officers directly to the applicable GAO regulations at 4 CFR part 21.
These changes make this section of the FAR more concise, clear, and
easier to navigate. This is a critical benefit as it minimizes the risk
of legal discrepancies between the different regulatory bodies, reduces
the administrative burden on contracting officers, and lowers the long-
term need for additional rulemaking to harmonize duplicative text.
5. FAR Part 39
This proposed rule, if finalized, is not expected to have a
significant impact on contractors or subcontracts.
A. Duplicative Privacy and Security Safeguards
This proposed rule seeks to remove the requirements of FAR 39.105,
Privacy and FAR clause 52.239-1, Privacy or security safeguards, since
these requirements are addressed elsewhere in the FAR. Security
controls that safeguard publication or disclosure are covered in FAR
53.240-3 Security Prohibitions and Exclusions, and other external
controls exist that restrict disclosure of certain information and
provide safeguards for Federal information systems (e.g., PM-1:
Information Security Program Plan and SR-2: Supply Chain Risk
Management Plan). These changes directly contribute to increased
clarity and readability for both contracting officers and contractors
leading to reduced administrative burden as contracting officers and
contractors no longer need to reconcile overlapping requirements.
Furthermore, by pointing to external control plans that are updated
outside of the lengthy rulemaking process, ensuring security and
privacy safeguards remain current and responsive to an evolving
environment.
B. PNT Services
This proposed rule, if finalized, is not expected to have a
significant impact on contractors or subcontractors. This proposed rule
primarily relates to internal Government business practices as it
enhances acquisition planning regarding PNT services. These changes in
the FAR will provide acquisition planners better guidance on how to
assess for PNT dependencies, capture PNT operational requirements, and
account for needed PNT resiliency. This guidance will provide
contractors with a better understanding of such considerations in
Government acquisitions for products, systems, or services dependent on
PNT services.
C. NICE Framework
This rule proposes to require agencies to become familiar with the
NICE Framework provided in NIST Special Publication 800-181 and
additional tools to implement it at https://www.nist.gov/nice/framework
to describe the cybersecurity workforce tasks, knowledge, skills, and
work roles when procuring information technology support services and
cybersecurity support services. Agencies are expected to verify that
offers, quotes, and reporting requirements (e.g., contract
deliverables) align with the NICE Framework. By using the NICE
Framework to describe cybersecurity workforce tasks, knowledge, skills,
and work roles, the proposed changes would create a common standard
which would provide contractors with clearer and more standardized
requirements in solicitations. This clarity reduces ambiguity and
allows contractors to better tailor their offers and proposals to the
Government's exact needs.
This rule requires contractors to ensure contract deliverables are
consistent with the NICE Framework when specified for the acquisition
of information technology support services and cybersecurity support
services. This change also provides contractors with a consistent
roadmap for internal training and workforce development. By aligning
their talent pool with the NICE Framework, contractors can more
efficiently invest in and maintain a qualified workforce capable of
meeting Federal contract requirements across multiple agencies.
6. FAR Part 40
1. Security Exclusions and Prohibitions
Improved National Security. Part 40 consolidates and strengthens
regulations that prohibit contracting with entities that pose security
risks (e.g., certain Chinese telecommunications companies, Kaspersky
Lab, TikTok) and creates a single ``do not buy'' list. This directly
protects federal information systems and critical infrastructure from
foreign threats, which in turn enhances overall public safety and
security.
Enhanced Clarity and Compliance. The use of plain language and the
consolidation of numerous provisions and clauses into fewer, more
comprehensive ones (e.g., merging five separate provisions into one
provision, and seven separate clauses to one clause) reduces confusion
for contractors. This clarity helps ensure higher compliance rates and
more secure contracts across the Federal Government.
[[Page 37564]]
Greater Efficiency and Faster Acquisitions. By streamlining
complex, often redundant, security requirements from parts 4, 25, and
40 into a single, logically organized part 40, the process for
acquisition professionals is simplified. This ``common sense'' approach
reduces administrative burdens and the time it takes to award
contracts, allowing Government agencies to acquire necessary goods and
services more quickly and efficiently. Reorganizing the content and
consolidating information allows contractors and the acquisition
workforce to better understand how current prohibitions are related,
reducing the burden on the Government workforce and contractors while
improving national security.
Covered Procurement Actions.
This rule will allow executive agencies to use the authorities in
41 U.S.C. 4713 to exclude certain products, services, or sources from
the Federal supply chain to protect national security. Foreign
adversaries are increasingly creating and exploiting vulnerabilities in
information and communications technology to commit malicious cyber-
enabled attacks, including economic espionage against the United States
and its citizens. Vulnerabilities may be introduced during any phase of
the product or service life cycle: design, development and production,
distribution, acquisition and deployment, maintenance, and disposal.
This rule helps mitigate these supply chain risks by ensuring agencies
can address these national security risks by excluding products,
services, or sources through a covered procurement action. Excluding
specific sources, services, or sources is an important tool for
addressing these national security risks, because there are specific
risks that cannot be mitigated through additional security controls
being applied and can only be mitigated by complete exclusion.
Telecommunications and Video Surveillance Equipment Prohibition.
This rule incorporates several updates to the prohibition
requirements from the interim rules such as clarifying definitions,
exceptions, and the scope of the rule that will reduce burden on both
the public and Government. For example, the rule clarifies what
activities are not considered use of covered telecommunications
equipment or services for purposes of this specific prohibition. The
rule also proposes definitions for telecommunications equipment,
telecommunications services, video surveillance equipment, video
surveillance services, and system.
2. CUI Requirements
Uniform Cybersecurity Practices. Establishing uniform requirements
for how the acquisition workforce and Federal contractors manage CUI
will significantly improve the Government and Federal contractors'
ability to protect Federal information and information systems from
criminals and our adversaries. Absent the uniform approach proposed in
this rule, agencies will continue to employ ad hoc, agency-specific
policies to manage this information, an approach that can cause
agencies to mark and handle information inconsistently and
inefficiently. While waivers may be applied in some circumstances, this
rule is intended to establish a Governmentwide baseline that will lead
to more effective implementation of protections for this sensitive
information by the acquisition workforce and contractors. More
effective implementation of requirements for identifying and marking
CUI will reduce scenarios in which contractors may not realize the
information that they are handling is sensitive information that must
be safeguarded.
Protection From Potential Financial Impacts of CUI Incidents.
Failure to adopt these basic cybersecurity requirements can have a
substantial financial impact on a business. There have been many
analyses regarding the cost of cybersecurity incidents and the
estimates vary widely. In order to establish a defensible set of cost
and loss data that is suitable for the analysis of cybersecurity
incident costs in the Federal sector, the Cyber Security and
Infrastructure Security Agency (CISA) Office of the Chief Economist
(OCE), in the Department of Homeland Security, reviewed a broad range
of cyber cost and loss studies and presented an analysis of the per-
incident, aggregate, and scenario-based estimates of cyber loss. On
October 26, 2020, the CISA OCE released a report (https://www.cisa.gov/sites/default/files/2024-10/CISA-OCE%20Cost%20of%20Cyber%20Incidents%20Study_508.pdf) with the results
of their analyses and a summary of per-incident loss estimates
available in the most widely cited published research, commercial
datasets, and industry reports. OCE estimated the median cost of a
cybersecurity incident cited in the surveyed publications ranged from
$0.5 to $1.6 million. The maximum cost per incident cited ranged from
$11.7 million to greater than $1 billion. The CISA OCE acknowledges in
its report that the differences in the assumptions, approaches to data
collection, and specific incidents included in the datasets for the
above sources result in a high degree of variability among the loss
estimates.
Increased Protection of Sensitive Information. Given the potential
financial impacts a CUI incident may have on companies and individuals,
it is imperative that Federal contractors who are entrusted with
sensitive information in the performance of Government contracts adopt
the basic cybersecurity hygiene requirements outlined in this rule.
This increased baseline of cybersecurity hygiene across Federal
contractors will reduce the number of incidents that have the potential
to place sensitive information at risk and pose serious threats to
individuals, Federal operations and assets, and the contractors
themselves. For the remaining incidents that may occur, the requirement
for contractors to report CUI incidents will allow the Federal
Government to have appropriate situational awareness, quickly respond
to the incident, and reduce the impact of the event.
7. FAR Part 53
Creating a centralized FAR forms list on www.acquisition.gov and
referencing it in the new FAR subpart 1.6 (where the existing FAR part
53 is moving) simplifies user access to the forms and forms-related
information. This change allows the list of forms to be updated outside
the formal rulemaking process, reducing the FAR Council's
administrative burden and speeding up Government updates.
V. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
the 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.
This is a significant regulatory action and, therefore, was subject to
review under Section 6(b) of E.O. 12866, Regulatory Planning and
Review, dated September 30, 1993.
VI. Executive Order 14192
This rule is subject to E.O. 14192, Unleashing Prosperity Through
Deregulation. This proposed rule, if finalized, is not anticipated to
be an E.O. 14192 regulatory action because it
[[Page 37565]]
imposes no more than de minimis costs. See discussion in the ``Expected
Impact of the Rule'' section of this preamble.
VII. Regulatory Flexibility Act
This proposed rule, if finalized, may have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601-612. However, an Initial
Regulatory Flexibility Analysis (IRFA) has been performed and is as
follows:
1. Reasons for the Action
Executive Order (E.O.) 14275, Restoring Common Sense to Federal
Procurement, directs the elimination of excessive acquisition
regulations to stop the inefficient use of American taxpayer dollars.
The E.O. directs the first comprehensive end-to-end overhaul of the FAR
in its 40-year history. The E.O. establishes the policy that the FAR
should ``contain only provisions that are required by statute or that
are otherwise necessary to support simplicity and usability, strengthen
the efficacy of the procurement system, or protect economic or national
security interests.'' In response to E.O. 14275, the Office of
Management and Budget issued memorandum M-25-26, Overhauling the
Federal Acquisition Regulation. The Memo directed the FAR Council to
complete a ``revolutionary overhaul'' of the FAR. Therefore, the FAR
Council is issuing twelve proposed rules that will collectively
streamline the entire FAR.
2. Objectives of, and Legal Basis for, the Rule
The revolutionary FAR overhaul (RFO) rewrite represents a paradigm
shift in federal acquisition. It emphasizes streamlining, clarity, and
accessibility, while ensuring that the regulation focuses only on
statutory mandates and foundational procurement principles. The RFO is
designed to streamline compliance for contracting professionals,
improve acquisition speed and agility, and reinforce mission outcomes
over process formalities.
The basis for the RFO is E.O. 14275, Restoring Common Sense to
Federal Procurement. The authority for promulgation of the FAR is 41
U.S.C. 1121(b); 40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C.
chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C.
20113.
3. Description of and an Estimate of the Number of Small Entities to
Which the Rule Will Apply
All small entities who want to contract with the Federal Government
will have to familiarize themselves with the reorganized, streamlined,
and revised FAR, including the content of this rulemaking. As of
January 2026, there are 401,196 entities registered in the System for
Award Management (SAM) that were small for at least one NAICS code they
had selected.
a. FAR Part 1
FAR part 1 focuses on the Government's internal processes. The
proposed revisions remove redundant or unnecessary content which
results in making the regulations easier to navigate and understand for
small entities. Additionally, the changes proposed in FAR part 1 do not
place any new direct requirements on contractors.
b. FAR Part 4
The changes proposed by this rule to FAR part 4 impact all entities
that do business with the Federal Government. These changes are
expected to have a positive economic impact on a substantial number of
small entities. Particularly the streamlining of the SAM registration
will impact the 401,196 entities registered in SAM that were small for
at least one NAICS code they had selected, which accounts for 70
percent of the total active entities registered in SAM.
c. FAR Part 33
The changes proposed by this rule to FAR part 33 help to more
clearly describe the purpose of protests for both Government and
contractors, encourage more disclosure of information for agency
protests, and overall streamline the regulatory text related to GAO
protest procedures. The impact on small entities is expected to be
positive, specifically the enhancements to the agency-level protest
process that allows for more information sharing and resolution in a
swifter and less costly protest forum.
d. FAR Part 39
i. PNT Services. The changes proposed by this rule provide guidance
to Government acquisition personnel on PNT services. The proposed rule
does not represent any novel requirements but consolidates disparate
standards into easier to follow guides for the acquisition community.
Clearer Federal customer PNT needs will help providers proactively
adjust their products and services, contributing to the policy's goal
of increased national resilience. Because PNT services are used in
virtually all product or service classes, it is not feasible to isolate
them to specific North American Industry Classification System or
Product Service Codes. Therefore, based on data obtained from SAM
Contract Awards Management for fiscal years 2022 through 2024, it is
estimated on average approximately 114,159 unique entities were awarded
contracts each year, of which approximately 75,013 were unique small
entities.
ii. NICE Framework. This rule proposes to enhance cybersecurity by
incorporating the NICE Framework lexicon and taxonomy into contracts
for information technology and cybersecurity services This rule will
enable agencies to evaluate whether personnel have the necessary
knowledge and skills to perform the tasks specified in the contract,
consistent with the NICE Framework.
This rule requires contractors to understand the NICE Framework,
change internal operating procedures to reflect the new taxonomy, and
ensure contract deliverables submitted to the Government are consistent
with the NICE Framework.
Based on data obtained from SAM Contract Awards Management for
fiscal years 2021 through 2023, it is estimated on average
approximately 16,658 unique entities were awarded contracts each year,
for cybersecurity and information technology services (based on Product
and Service Code beginning with ``D''), of which approximately 64%
(10,691) are unique small entities.
e. FAR Part 40
The changes proposed by this rule to FAR part 40 impact all
entities that do business with the Federal Government. The proposed
revisions to FAR part 40 merge and consolidate regulations found in
multiple subparts throughout the FAR into a single, logically organized
part. The requirements of various security prohibitions and exclusions
have been relocated from FAR parts 4 and 25 into FAR part 40. The
proposed changes simplify requirements making them easier to navigate
and understand for small entities. This rule authorizes agencies to
take agency specific exclusion actions called covered procurement
actions. The specific exclusion actions allowed by the statute are
defined in this rule as part of the definition of covered procurement
action. The rule also incorporates requirements for protecting
controlled unclassified information.
f. FAR Part 53
The changes proposed by this rule, to relocate the content from the
existing FAR part 53 to a new FAR subpart 1.6, impact all entities that
do business with the Federal Government. For more
[[Page 37566]]
details, refer to paragraph 3.a of this IRFA section.
4. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements of the Rule
a. FAR Part 1
This proposed rule does not contain any new reporting,
recordkeeping or other compliance requirements. The reporting
requirement established by FAR 52.201-1, Acquisition 360: Voluntary
Survey is proposed to be removed from the FAR. The voluntary use of
this form is now located in the FAR companion guide. FAR 52.253-1,
Computer Generated Forms is being relocated from FAR part 53 to FAR
part 1 without change. There are no new provisions or clauses.
b. FAR Part 4
This proposed rule does not contain any new reporting,
recordkeeping or other compliance requirements under FAR part 4. The
rule proposes to streamline compliance under the clauses at FAR 52.204-
10, Reporting Executive Compensation and First-Tier Subcontract Awards;
52.204-14, Service Contract Reporting Requirements; and 52.204-15,
Service Contract Reporting Requirements for Indefinite-Delivery
Contracts, by excluding applicability to contracts for commercial
acquisitions.
This rule also proposes to remove the FAR part 4 provisions and
clauses as described in the table under paragraph 4.e of this IRFA.
c. FAR Parts 33 and 53
FAR parts 33 and 53 do not contain any new reporting,
recordkeeping, or other compliance requirements.
d. FAR Part 39
This rule proposes to require contractors to understand the NICE
Framework, change internal operating procedures to reflect the new
taxonomy, and ensure contract deliverables submitted to the Government
are consistent with the NICE Framework.
e. FAR Part 40
Existing reporting, recordkeeping, and compliance requirements from
FAR parts 4, 25, and 40 are proposed for consolidation in FAR part 40
as described in the following table:
------------------------------------------------------------------------
------------------------------------------------------------------------
Existing reporting, recordkeeping, and compliance requirements moving
and consolidating under FAR part 40:
------------------------------------------------------------------------
Under provision at FAR 52.240-2, 52.204-24, Representation
Security Prohibitions and Exclusions-- Regarding Certain
Representations and Certifications. Telecommunications and Video
Surveillance Services or
Equipment.
52.204-26, Covered
Telecommunications Equipment
or Services--Representation.
52.204-29, Federal Acquisition
Supply Chain Security Act
Orders--Representation and
Disclosures.
52.225-20, Prohibition on
Conducting Restricted Business
Operations in Sudan--
Certification, and
52.225-25, Prohibition on
Contracting with Entities
Engaging in Certain Activities
or Transactions Relating to
Iran--Representation and
Certifications.
Under clause at FAR 52.240-3, Security 52.204-23, Prohibition on
Prohibitions and Exclusion. Contracting for Hardware,
Software, and Services
Developed or Provided by
Kaspersky Lab Covered
Entities.
52.204-25, Prohibition on
Contracting for Certain
Telecommunications and Video
Surveillance Services or
Equipment.
52.204-27, Prohibition on a
ByteDance Covered Application.
52.204-28, Federal Acquisition
Supply Chain Security Act
Orders--Federal Supply
Schedules, Governmentwide
Acquisition Contracts, and
Multi-Agency Contracts.
52.204-30, Federal Acquisition
Supply Chain Security Act
Orders--Prohibition.
52.225-13 Restrictions on
Certain Foreign Purchases.
52.240-1 Prohibition on
Unmanned Aircraft Systems
Manufactured or Assembled by
American Security Drone Act--
Covered Foreign Entities.
FAR 52.240-4, Classified Information... 52.204-2, Security
Requirements.
52.240-5, Covered Federal Information.. 52.204-21, Basic Safeguarding
of Covered Contractor
Information Systems.
------------------------------------------------------------------------
The proposed provision 52.240-2, Security Prohibitions and
Exclusions--Representations and Certifications and clause 52.240-3,
Security Prohibitions and Exclusion also authorize agencies to take an
agency specific exclusion action called covered procurement actions.
The specific exclusion actions allowed by the statute are defined in
this rule as part of the definition of covered procurement action.
Additionally, this proposed rule, if finalized, would add a new
provision at 52.240-6, Notice of Controlled Unclassified Information
Requirements, and a new clause at 52.240-7, Controlled Unclassified
Information. The provision and clause are prescribed at FAR 40.304-6(a)
and 40.304-6(b).
This proposed rule introduces a new standard form (SF) to support
uniformity in Governmentwide implementation of these policies. It
identifies roles and responsibilities for agencies and contractors when
controlled unclassified information is located on Federal information
systems within a Federal facility or resides on or transits through
contractor information systems or within contractor facilities, and it
adds a new clause and a provision to enable contractor reporting and
compliance responsibilities in Federal solicitations and contracts.
5. Relevant Federal Rules Which May Duplicate, Overlap, or Conflict
With the Rule
The proposed rule, if finalized, would not duplicate, overlap, or
conflict with other Federal rules.
6. Description of Any Significant Alternatives to the Rule Which
Accomplish the Stated Objectives of Applicable Statutes, and Which
Minimize Any Significant Economic Impact of the Rule on Small Entities
There are no significant alternatives that would minimize the
impact of the rule on small entities.
The Regulatory Secretariat Division has submitted a copy of the
IRFA to the Chief Counsel for Advocacy of the Small Business
Administration. A copy of the IRFA may be obtained from the Regulatory
Secretariat Division. The FAR Council invites comments from small
business concerns and other interested parties on the expected impact
of this proposed rule on small entities.
The FAR Council will also consider comments from small entities
concerning the existing regulations in subparts affected by the rule in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite ``5 U.S.C. 610 (FAR Case 2026-
001)'' in correspondence.
[[Page 37567]]
VIII. Paperwork Reduction Act
This rule includes information collections under the Paperwork
Reduction Act (44 U.S.C. 3501-3521). Following are the specific
collections associated with each FAR part in this rule as previously
approved by OMB followed by how each collection would be affected by
the proposed rule. If a FAR part is not listed below, then there are no
information collections associated with the part.
Part 1
OMB Control No. 9000-0204, Acquisition 360 Voluntary Survey. The
changes under this proposed rule, if finalized, would not affect the
information collection or the paperwork burden previously approved by
OMB. The collection would remain unchanged.
Part 4
OMB Control Nos. 9000-0177, Reporting Executive Compensation and
First-tier Subcontract Awards; and 9000-0189, Certain Federal
Acquisition Regulation Part 4 Requirements: FAR Sections Affected:
52.204-3, 52.204-6, 52.204-7, 52.204-12 thru 52.204-18, 52.204-20,
52.204-23, 52.212-1(j), 52.212-3(b), and 52.212-3(l). The changes under
this proposed rule, if finalized, would revise these information
collections and the paperwork burden previously approved by OMB. The
public reporting burden for these collections of information will be
consolidated under OMB Control No. 9000-0189 with the new title
``Federal Acquisition Regulation Part 4 Requirements'' and OMB Control
No. 9000-0177 will be discontinued. Additionally, the public reporting
burden for OMB Control No. 9000-0189 will be revised to exclude
commercial acquisitions from the information collection requirements
under the clauses at FAR 52.204-10, 52.204-14, and 52.204-15 as
described in section II. of this preamble.
The revised annual reporting burden is estimated as follows:
Respondents: 66,575.
Total Annual Responses: 271,227.
Total Burden Hours: 393,994.
Part 33
OMB Control No. 9000-0035, Claims and Appeals.
The changes under this proposed rule, if finalized, would not
affect the information collection or the paperwork burden previously
approved by OMB. The collection would remain unchanged.
Part 40
OMB Control No(s). 9000-0189 for the FAR 52.204-23 information
collection; 9000-0199, Prohibition on Contracting for Certain
Telecommunications and Video Surveillance Services or Equipment--FAR
sections affected: 52.204-26; 52.204-24; and 52.204-25; and 9000-0205,
Implementation of Federal Acquisition Supply Chain Security Act
(FASCSA) Orders--FAR Sections Affected: 52.204-29, 52.204-30. The
changes under this proposed rule, if finalized, would revise these
information collections and the paperwork burden previously approved by
OMB. The public reporting burden for these collections of information
will be consolidated under OMB Control No. 9000-0199 with the new title
``Federal Acquisition Regulation Part 40 Requirements'' and OMB Control
No. 9000-0205 will be discontinued. Additionally, the public reporting
burden for OMB Control No. 9000-0199 will be revised to add to the
information collection burden to implement Section 203 in the Federal
Acquisition Supply Chain Security Act of 2018, which is the title II of
the ``Strengthening and Enhancing Cyber-capabilities by Utilizing Risk
Exposure Technology Act'' (SECURE Technology Act), (Pub. L. 115-390);
and E.O. 13556, Controlled Unclassified Information, that established
the CUI Program and NARA's final rule at 81 FR 63324 on September 14,
2016, to implement the CUI requirements of E.O. 13556.
The revised annual burden is estimated as follows:
Respondents: 920,779.
Total Annual Responses: 946,075.
Total Burden Hours: 1,910,833.
C. Comments Regarding Paperwork Burden
The FAR Council will publish a separate first notice in accordance
with the Paperwork Reduction Act seeking comments on the changes to
these collections of information.
IX. Severability
If any portion (e.g., section, clause, sentence) of this rule is
held to be invalid or unenforceable facially, or as applied to any
entity or circumstance, it shall be severable from the remainder of
this rule, and shall not affect the remainder thereof, or its
application to entities not similarly situated or to other dissimilar
circumstances. The various portions of this rule are independent and
serve distinct purposes. Even if one aspect were rendered invalid, the
other benefits of the rule would still be applicable.
List of Subjects in 48 CFR Parts 1, 2, 4, 33, 39, 40, 52, and 53
Government procurement.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-wide Policy.
Therefore, OFPP, DoD, GSA, and NASA propose amending 48 CFR parts
1, 2, 4, 33, 39, 40, 52, and 53 as set forth below:
0
1. Revise parts 1, 2, 4, 33, 39, and 40 to read as follows:
PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM
Sec.
1.000 Scope of part.
Subpart 1.1--Framework
1.101 Framework.
1.102 Guiding principles for the System.
1.103 Authority.
1.104 Publication and code arrangement.
1.105 OMB approval under the Paperwork Reduction Act.
1.106 Certifications.
1.107 FAR conventions.
1.108 Statutory acquisition-related dollar thresholds-adjustment for
inflation.
1.109 Regulatory sunset.
1.110 Positive law codification.
1.111 Publication for public comment.
Subpart 1.2--Agency Acquisition Regulations
1.201 Policy.
Subpart 1.3--Deviations from the FAR
1.300 Scope of subpart.
1.301 Definition.
1.302 Policy.
1.303 Individual deviations.
1.304 Class deviations.
1.305 Deviations pertaining to treaties and executive agreements.
Subpart 1.4--Career Development, Contracting Authority, and
Responsibilities
1.401 Contracting functions.
1.402 Contracting officers.
1.402-1 Authority.
1.402-2 Responsibilities.
1.403 Selecting, appointing, and terminating the appointment for
contracting officers.
1.403-1 General.
1.403-2 Appointment.
1.403-3 Termination.
1.404 Contracting officer's representative.
1.405 Ratification of unauthorized commitments.
Subpart 1.5--Determination and Findings
1.500 Scope of subpart.
1.501 General.
1.502 Class determination and findings.
1.503 Content.
1.504 Replacement and modification.
Subpart 1.6--Forms
1.601 Definition.
1.602 Policy.
[[Page 37568]]
1.603 Computer generation.
1.604 Recommendations concerning forms.
1.605 Contract clause.
Authority: 41 U.S.C. 1121(b); 40 U.S.C. 121(c); 10 U.S.C.
chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C.
3016); and 51 U.S.C. 20113.
1.000 Scope of part.
This part describes the framework and guiding principles for the
Federal Acquisition Regulations System (the System).
Subpart 1.1--Framework
1.101 Framework.
(a) The System is a collection of acquisition regulations and
guidance, and consists of the following:
(1) The Federal Acquisition Regulation (FAR), which is a single
acquisition regulation applicable to all acquisitions, and all
executive agencies. The FAR is issued as Chapter 1 of title 48 of the
Code of Federal Regulations (CFR).
(2) Agency acquisition regulations that implement or supplement the
FAR (see 48 CFR chapters 2 through 99).
(3) FAR companion guide, which contains nonregulatory guidance and
best practices (available at https://www.acquisition.gov/far-companion).
(b) The System does not include internal guidance supplementing
agency acquisition regulations described in 1.201(c).
1.102 Guiding principles for the System.
(a) The System will--
(1) Meet an agency's mission efficiently and effectively first;
(2) Ensure the most effective use of taxpayer dollars in ways that
recognize the value of time, encourage innovation, promote merit,
attract domestic sources' participation, satisfy the customer, and
balance these interests and objectives;
(3) Maximize buying commercial products or commercial services
rather than requiring Government-unique solutions;
(4) Award contracts to contractors who demonstrate a superior
ability to perform;
(5) Promote competition and fair opportunity;
(6) Promote conducting business with integrity, fairness, and
openness; and
(7) Delegate the authority to make decisions and accountability for
those decisions to the lowest level within the System, consistent with
law. The contracting officer must have the authority, to the maximum
extent practicable and consistent with law, to determine how and when
to apply rules, regulations, and policies on a specific contract.
(b)(1) Acquisition team members in the System include Government
acquisition representatives from the technical, supply, sourcing, small
business and procurement areas; the customers they support; and the
contractors who deliver the products and services.
(2) The role of each acquisition team member in the System is to
exercise personal initiative and sound business judgment to meet the
agency's mission and manage risk.
(3) To continually promote innovation, the FAR encourages
acquisition team members to pursue new approaches, and document
successes and lessons learned.
(4) In this spirit, acquisition team members may assume that if a
specific strategy, practice, policy, or procedure is in the best
interests of the Government and is not addressed in the FAR, nor
prohibited by law (statute or case law), Executive order or other
regulation, then they are allowed to use the strategy, practice,
policy, or procedure.
(5) Acquisition team members should work together as a team and
make decisions within their area of responsibility.
(6) Acquisition team members can propose deviations from FAR
regulations if the deviation would promote economy, efficiency, or
innovation (see subpart 1.3).
(c) To achieve efficient operations, the System focuses on risk
management rather than risk avoidance. Attempting to eliminate all risk
is prohibitive in terms of cost to the taxpayer.
1.103 Authority.
(a) The System has been developed according to the requirements of
41 U.S.C. chapter 13, Acquisition Councils.
(b) The Federal Acquisition Regulatory Council, or FAR Council,
consists of the Administrator for Federal Procurement Policy, the
Secretary of Defense, the Administrator of General Services, and the
Administrator of National Aeronautics and Space. The FAR is prepared
and jointly issued by the FAR Council under their several statutory
authorities.
1.104 Publication and code arrangement.
(a) Changes to the FAR are published in the daily issue of the
Federal Register. A cumulative version of the FAR is published--
(1) In the CFR, in an annually updated version at https://www.govinfo.gov/app/collection/cfr, and as a daily updated version at
ecfr.gov; and
(2) In an enhanced daily updated version available at https://www.acquisition.gov/browse/index/far.
(b) For further details on the arrangement and numbering of the
FAR, including provisions and clauses and supplemental agency
regulations, see https://www.acquisition.gov.
(c) Each numbered unit or segment (i.e., part, subpart, section,
etc.) of an agency acquisition regulation that is codified in the CFR
must begin with the chapter number. However, the chapter number
assigned to the FAR will not be included in the numbered units or
segments of the FAR.
(d) Using the FAR coverage at 9.106-4(d) as a typical illustration,
reference to the part would be ``FAR part 9'' outside the FAR and
``part 9'' within the FAR. Reference to the section would be ``FAR
9.106'' outside the FAR and ``9.106'' within the FAR.
(e) GSA is responsible for establishing and operating the FAR
Regulatory Secretariat to publish and distribute the FAR through the
CFR system.
1.105 Office of Management and Budget approval under the Paperwork
Reduction Act.
The list of information collections and recordkeeping requirements
contained in this regulation have been approved by the Office of
Management and Budget (OMB). They can be found at https://www.acquisition.gov/FAR-PRA.
1.106 Certifications.
Unless allowed under 41 U.S.C. 1304, the FAR must not require a
certification from an offeror or contractor.
1.107 FAR conventions.
(a) Words and terms. (1) Definitions in part 2 apply to the entire
regulation unless specifically defined in another part, subpart,
section, provision, or clause. Words or terms defined in a specific
part, subpart, section, provision, or clause have that meaning when
used in that part, subpart, section, provision, or clause.
(2) Undefined words retain their common dictionary meaning.
(b) Delegation of authority. Each authority is delegable unless
specifically stated otherwise.
(c) Dollar thresholds. (1) Unless otherwise specified, a specific
dollar threshold is the final anticipated dollar value of the action,
including the dollar value of all options.
(2) The final anticipated dollar value must be the highest final
priced alternative to the Government, including the dollar value of all
options, if the action establishes--
(i) A maximum quantity of supplies or services to be acquired;
(ii) A ceiling price; or
(iii) The final price to be based on future events.
[[Page 37569]]
(d) Applying FAR changes to solicitations and contracts. Unless
otherwise specified--
(1) FAR changes apply to solicitations issued on or after the
effective date of the change;
(2) Contracting officers may, at their discretion, include the FAR
changes in solicitations issued before the effective date, provided
award of the resulting contract(s) occurs on or after the effective
date; and
(3) Contracting officers may, at their discretion, include the
changes in any existing contract with appropriate consideration.
(e) Citations. When the FAR cites a statute, Executive order, OMB
circular, Office of Federal Procurement Policy policy letter, or
relevant portion of the CFR, the citation includes all applicable
amendments, unless otherwise stated.
(f) Required action. When a sentence directs action, the
contracting officer is responsible for the action, unless another party
is expressly cited.
1.108 Statutory acquisition-related dollar thresholds-adjustment for
inflation.
The FAR adjusts statutory acquisition-related dollar thresholds for
inflation every 5 years. The statute at 41 U.S.C. 1908 establishes the
calculation used to escalate the thresholds. The statute also
identifies certain thresholds that must not be escalated. A matrix of
the most recent calculations is available at https://www.regulations.gov (search FAR Case 2024-001, open the docket folder,
and go to the supporting documents file).
1.109 Regulatory sunset.
(a) Consistent with Executive Order 14275 of April 15, 2025,
Restoring Common Sense to Federal Procurement, the FAR Council will
seek public input through rulemaking on sections, provisions and
clauses of the FAR that are not explicitly required by statute or
Executive order prior to their expiration.
(b)(1) Sections, provisions, and clauses in the FAR do not expire
until removed from the FAR by rulemaking.
(2) Clauses in a contract remain in effect until removed by
contract modification, unless--
(i) The clause by its terms specifies an expiration date; or
(ii)The FAR Council determines that it would be advantageous to
contractors to no longer enforce the clause, and publishes a notice in
the Federal Register providing that the clause is no longer
enforceable.
1.110 Positive law codification.
Titles 40 and 41 of the United States Code were revised and
reorganized, as a result of positive law codifications. A table
identifying the original ``popular name'' of the public laws in those
titles, and how they are referred to in the FAR, is available at
https://www.acquisition.gov/renamingpubliclaws.
1.111 Publication for public comment.
Publication of a procurement policy, regulation, procedure or form
in the Federal Register must be consistent with 41 U.S.C. 1707.
Subpart 1.2--Agency Acquisition Regulations
1.201 Policy.
(a)(1) An agency head may issue agency acquisition regulations that
are necessary to implement the FAR, or to supplement the FAR to satisfy
a specific agency need, according to 41 U.S.C. 1303(a)(2). When
creating supplemental provisions and clauses, including those for
suborganizational or specific contracting office needs, use the
sequential numbers starting at 70.
(2) Agency acquisition regulations must not--
(i) Unnecessarily repeat, paraphrase, or otherwise restate material
contained in the FAR or higher-level agency acquisition regulations; or
(ii) Conflict or be inconsistent with the FAR, except as required
by law or as provided in subpart 1.3.
(b)(1) If required by 41 U.S.C. 1707, agencies must publish their
acquisition regulations for comment in the Federal Register. However,
publication is not required for issuances that merely implement or
supplement higher level issuances that have previously undergone the
public comment process, unless such implementation or supplementation
results in an additional significant cost or administrative impact on
contractors or offerors or effect beyond the internal operating
procedures of the issuing organization.
(2) Agencies must comply with other applicable statutes, (e.g., the
Paperwork Reduction Act (44 U.S.C. 3501, et seq.) and the Regulatory
Flexibility Act (5 U.S.C. 601, et seq.)).
(c) An agency head may authorize internal agency guidance at any
organizational level (e.g., designations and delegations of authority,
assignments of responsibilities, work-flow procedures, and internal
reporting requirements). Internal agency guidance does not need to be
published in the Federal Register for comment, unless the agency
guidance has a significant effect beyond the internal operating
procedures of the agency or creates an additional significant cost or
administrative impact on contractors or offerors.
Subpart 1.3--Deviations from the FAR
1.300 Scope of subpart.
(a) This subpart prescribes the policies and procedures for
authorizing deviations from the FAR.
(b) Exceptions regarding the use of forms prescribed by the FAR are
covered in 1.602(d).
1.301 Definition.
Deviation means one or any combination of the following:
(1) Issuing or using a policy, procedure, solicitation provision,
contract clause, method, or practice of conducting acquisition actions
of any kind at any stage of the acquisition process that is
inconsistent with the FAR.
(2) Leaving out any solicitation provision or contract clause when
its prescription requires including it.
(3) Using any solicitation provision or contract clause with
modified or alternate language that is not authorized by the FAR (see
definition of ``modification'' in 52.101(a)).
(4) Using a solicitation provision or contract clause prescribed by
the FAR on a substantially as follows or substantially the same as
basis, if such use is inconsistent with the intent, principle, or
substance of the prescription or related coverage on the subject matter
in the FAR.
(5) Authorizing lesser or greater limitations on the use of any
solicitation provision, contract clause, policy, or procedure required
by the FAR.
(6) Issuing policies or procedures that control contractual
relationships that are not incorporated into agency acquisition
regulations according to 1.201(a).
1.302 Policy.
(a) Unless not allowed by law, Executive order, or regulation,
agencies may deviate from the FAR as specified in this subpart when
necessary to meet an agency's specific needs.
(b) Refer to 31.004 for instructions on deviating from part 31,
Contract Cost Principles and Procedures.
(c) Agencies are not authorized to deviate from 30.201-3 and
30.201-4, or the requirements of the Cost Accounting Standards Board
(CASB) rules and regulations (48 CFR chapter 99). Refer to 30.201-5 for
instructions on deviating from the Cost Accounting Standards.
1.303 Individual deviations.
Individual deviations affect only one contract action. The agency
head may
[[Page 37570]]
authorize individual deviations. The contracting officer must document
the justification and agency approval in the contract file.
1.304 Class deviations.
(a) Class deviations affect more than one contract action. A
deviation for any solicitation that will result in multiple contract
awards will need to be done as a class deviation. When an agency knows
that it will require a class deviation on a permanent basis, it may
develop and propose a FAR revision.
(b) Agency heads may authorize class deviations from the FAR.
Before they do so, class deviations must be approved by the FAR
Council, except where required to implement agency-specific executive
or statutory direction. Agencies requesting approval must send the
proposed class deviation to the FAR Secretariat at [email protected].
(c) The FAR Council will review and provide a decision to the
requesting agency within 5 business days, unless the request is urgent.
The FAR Council will decide urgent requests within 24 hours of receipt
of the request. Agencies may proceed if they do not receive responses
within these time frames.
(d) Agencies must email a copy of each agency-approved class
deviation to the FAR Secretariat at [email protected].
(e) The Administrator for Federal Procurement Policy may require
the FAR Council to issue deviation guidance to promote uniformity.
1.305 Deviations pertaining to treaties and executive agreements.
(a) Deviations from the FAR that are necessary to comply with a
treaty to which the United States is a party are authorized, unless the
deviation would be inconsistent with FAR coverage based on a law
enacted after the treaty's execution.
(b) Deviations from the FAR that are necessary to comply with an
executive agreement (i.e., a Government-to-Government agreement,
including agreements with international organizations, to which the
United States is a party) are authorized unless the deviation would be
inconsistent with FAR coverage based on law.
Subpart 1.4--Career Development, Contracting Authority, and
Responsibilities
1.401 Contracting functions.
The agency head may establish contracting activities and delegate
contracting functions to the contracting activities. Per 41 U.S.C.
3102(b), agency heads may mutually agree to--
(a) Delegate contracting functions and responsibilities from one
agency to another; and
(b) Create joint or combined offices to exercise acquisition
functions and responsibilities.
1.402 Contracting officers.
1.402-1 Authority.
(a) Only contracting officers may sign, administer, or terminate
contracts on behalf of the Government. Contracting officers may bind
the Government based on the authority delegated to them. The appointing
authority must provide the contracting officer with clear instructions
in writing about what they can and cannot do.
(b) Contracting officers have wide latitude to exercise business
judgment.
1.402-2 Responsibilities.
Contracting officers are responsible for--
(a) Before signing a contract--
(1) Ensuring it meets all requirements of law, Executive orders,
regulations, and all other applicable procedures, including clearances
and approvals; and
(2) Ensuring funds are available for obligation;
(b) Ensuring compliance with the contract terms;
(c) Ensuring offerors and contractors receive impartial, fair, and
equitable treatment; and
(d) Requesting and considering the advice of specialists in audit,
law, engineering, information security, transportation, and other
fields, as appropriate.
1.403 Selecting, appointing, and terminating the appointment for
contracting officers.
1.403-1 General.
(a) 41 U.S.C. 1702(b)(3)(G) requires agency heads to establish and
maintain an acquisition career management program, which includes a
system to select, appoint, and terminate contracting officers'
appointments.
(b) Agency heads or their designees may select and appoint
contracting officers and terminate their appointments.
(c) These selections and appointments must be consistent with OFPP
standards for skill-based training in performing contracting and
purchasing duties as published in OFPP Policy Letter No. 05-01,
Developing and Managing the Acquisition Workforce, April 15, 2005, and
OFPP Memo dated January 19, 2023, Federal Acquisition Certification in
Contracting (FAC-C) Modernization (see https://www.fai.gov/certification/fac-c/contracting-fac-c/fac-c-policy-documents).
1.403-2 Appointment.
(a)(1) Contracting officers must be appointed in writing, using a
Standard Form (SF) 1402, Certificate of Appointment. The certificate
must state any limitations placed on the contracting officer's scope of
authority, other than limitations contained in applicable law or
regulation.
(2) Appointing officials must keep copies of all current
appointments.
(b)(1) Agency heads are encouraged to delegate micro-purchase
authority to individuals who are employees of an executive agency or
members of the Armed Forces of the United States who will use the
supplies or services being purchased.
(2) Agency heads must appoint these individuals in writing but are
not required to use an SF 1402.
1.403-3 Termination.
(a) Agency heads must terminate a contracting officer appointment
by letter, unless the Certificate of Appointment contains other
provisions for automatic termination.
(b) Terminations may occur for reasons such as reassignment,
termination of employment, or unsatisfactory performance. Agency heads
cannot terminate a contracting officer appointment retroactively.
1.404 Contracting officer's representative.
(a) Designation. (1) The contracting officer's representative (COR)
must be nominated either by the requiring activity or according to
agency procedures. The contracting officer designates and authorizes a
COR in writing and according to agency procedures. See 7.104(b)(6)
which directs the COR designation as early as possible.
(2) The COR designation must--
(i) Specify the extent of the COR's authority to act on behalf of
the contracting officer;
(ii) Specify the period covered by the designation;
(iii) State the authority cannot be delegated further; and
(iv) State that the COR may be personally liable for unauthorized
acts.
(3)(i) Contracting officers may not delegate responsibilities to a
COR that are delegated to a contract administration office under
42.202. Contracting officers may assign the COR other duties described
at 42.302.
(ii) The contracting officer must communicate the COR's duties
clearly and in writing.
(4) The contracting officer must send copies of the COR's
designation to the contractor and the contract administration office.
[[Page 37571]]
(b) Types of contracts and orders. The contracting officer must
assign a COR to all contracts and orders other than firm fixed-price
contracts and orders. For firm fixed-price contracts and orders, the
contracting officer may assign a COR.
(c) COR Qualifications. The COR--
(1) Must be a Government employee, unless otherwise authorized in
agency regulations;
(2) Must be certified and must maintain certification. The
certification must align with the current OMB memorandum on the Federal
Acquisition Certification for Contracting Officer Representatives (FAC-
COR) guidance, or for DoD, according to DoD policy guidance; and
(3) Must be qualified by training and experience.
(d) Lack of authority. A COR has no authority to make any
commitments or changes that affect price, quality, quantity, delivery,
or other terms and conditions of the contract. The COR must not direct
the contractor or its subcontractors to operate in conflict with the
contract terms and conditions.
(e) Responsibilities.
(1) A COR assists in the technical monitoring or administration of
a contract.
(2) The COR must maintain a file for each assigned contract. The
file must include, at a minimum--
(i) A copy of the contracting officer's letter of designation and
other documents describing the COR's duties and responsibilities; and
(ii) Documentation of COR actions taken according to the delegation
of authority.
1.405 Ratification of unauthorized commitments.
(a) Definitions.
As used in this section--
Ratification means the act of approving an unauthorized commitment
by an official who has the authority to do so.
Unauthorized commitment means an agreement that is not binding
solely because the Government representative who made it lacked the
authority to enter into that agreement on behalf of the Government.
(b) Policy. (1) Agencies should take actions to avoid the need for
ratifications.
(2)(i) The head of the contracting activity may ratify an
unauthorized commitment, subject to the criteria in paragraph (c).
(ii) Agencies may delegate the authority to ratify an unauthorized
commitment. Agencies cannot delegate this authority below the level of
the chief of the contracting office.
(3) Unauthorized commitments which involve claims subject to
resolution under 41 U.S.C. chapter 71, Contract Disputes, should be
processed under subpart 33.2, Disputes and Appeals.
(c) Criteria. Agencies may use the authority in paragraph (b)(2) of
this section only when--
(1) The Government accepted supplies or services from the
contractor, or the Government received a benefit from performance of
the unauthorized commitment;
(2) The ratifying official has the authority to enter into a
contractual commitment;
(3) The resulting contract would otherwise have been proper if made
by an authorized contracting officer;
(4) The contracting officer reviewing the unauthorized commitment
determines the price to be fair and reasonable;
(5) The contracting officer recommends payment, and legal counsel
concurs with the recommendation, unless agency procedures expressly do
not require legal counsel concurrence; and
(6) Funds are available and were available at the time the
unauthorized commitment was made.
(d) Nonratifiable commitments. Actions that do not meet the
criteria in paragraph (c) of this section may be subject to resolution
according to 31 U.S.C. 3702, or as authorized by subpart 50.1.
Subpart 1.5--Determination and Findings
1.500 Scope of subpart.
This subpart prescribes general policies and procedures for using a
determination and findings (D&F).
1.501 General.
(a)(1) Ordinarily, a D&F applies to an individual contract action.
Unless otherwise prohibited, agencies may execute class D&Fs for
classes of contract actions (see 1.502). The approval granted by a D&F
is restricted to the proposed contract action(s) reasonably described
in that D&F. D&Fs may provide for a reasonable degree of flexibility.
(2) Unless the D&F states otherwise, reasonable variations in
estimated quantities or prices are permitted.
(b) When an option is anticipated, the D&F must state the
approximate quantity to be awarded at first and the extent of the
increase the option permits.
1.502 Class determination and findings.
(a) A class D&F provides authority for a class of contract actions.
A class may consist of contract actions for the same or related
supplies, services, or other contract actions that require essentially
identical justification.
(b)(1) The findings in a class D&F must fully support the proposed
action either for the class as a whole or for each action. A class D&F
must be for a specified period, with the expiration date stated in the
document.
(2) When a solicitation has been provided to prospective offerors
before the expiration date, the authority under the D&F will continue
until award of the contract(s) resulting from that solicitation.
(c) The contracting officer must ensure that individual actions
taken under the authority of a class D&F are within the scope of the
D&F.
1.503 Content.
At a minimum, each D&F must include the following information:
(a) Identification of the agency and the contracting activity and
specific identification of the document as a Determination and
Findings.
(b) Description of the action being approved.
(c) Citation to the appropriate statute or regulation upon which
the D&F is based.
(d) Findings that detail the particular circumstances, facts, or
reasoning essential to support the determination. Necessary supporting
documentation must come from appropriate requirements and technical
personnel.
(e) A determination based on the findings that the proposed action
is justified under the applicable statute or regulation.
(f) For class D&Fs, an expiration date.
(g) The signature of the official authorized to sign the D&F and
the date signed.
1.504 Replacement and modification.
(a) If a D&F is replaced by another D&F, that action will not
invalidate any action taken under the original D&F before the date of
its replacement.
(b) The contracting officer is not required to cancel the
solicitation if the modified D&F supports the contract action.
Subpart 1.6--Forms
1.601 Definition.
As used in this subpart--
Exception means an approved departure from the established design,
content, or conditions for use of any standard form.
1.602 Policy.
(a) Requirements. The requirements for using the forms are
contained in
[[Page 37572]]
parts 1 through 52, where the subject matter applicable to each form is
addressed.
(b) Forms list. A list of the standard forms, optional forms (OF),
and agency forms specified by the FAR for use in acquisitions is
available at https://acquisition.gov/FARforms. The list identifies the
forms' current edition location, FAR part requirement, and prescribing
agency.
(c) Continuation sheets. Standard forms prescribed in the FAR may
be continued on plain paper of similar specification, or specially
constructed continuation sheets (i.e., OF 336). Continuation sheets
must include both the reference number of the document being continued
and the serial page number in the upper right hand corner.
(d) Exceptions. Agencies must obtain an exception from--
(1) The FAR Council for standard forms prescribed by the FAR; or
(2) The prescribing agency for agency-specific forms.
1.603 Computer generation.
The forms prescribed in the FAR may be computer generated without
obtaining an exception (see 1.602(d)), provided that--
(a) There is no change to the name, content, or sequence of the
data elements, and the form carries its number and edition date; or
(b) The form is in an electronic format covered by the American
National Standards Institute X12 Standards published by the Accredited
Standards Committee X12 on Electronic Data Interchange or a format that
can be translated into one of those standards.
1.604 Recommendations concerning forms.
(a) Public. FAR users may recommend new forms or revisions,
elimination, or consolidation of existing forms identified on the forms
list (see 1.602(b)). These recommendations should be submitted to the
FAR Secretariat.
(b) Government. Recommendations from within an executive agency
must be submitted to the Civilian Agency Acquisition Council or the
Defense Acquisition Regulations Council in accordance with agency
procedures.
1.605 Contract clause.
Insert the clause at 52.201-2, Computer Generated Forms, in
solicitations and contracts, including those for commercial products
and commercial services, that require the contractor to submit data on
standard forms or optional forms; and, unless prohibited by agency
regulations, forms prescribed by agency supplements.
PART 2--DEFINITIONS AND ACRONYMS
Sec.
2.000 Scope of part.
Subpart 2.1--Definitions, Acronyms, and Abbreviations
2.101 Definitions.
2.102 Acronyms and abbreviations.
2.103 Contract clause.
Authority: 41 U.S.C. 1121(b); 40 U.S.C. 121(c); 10 U.S.C.
chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C.
3016); and 51 U.S.C. 20113.
2.000 Scope of part.
(a) This part--
(1) Defines words and terms that are frequently used in the FAR);
(2) Provides cross-references to other definitions in the FAR of
the same word or term; and
(3) Provides for the incorporation of these definitions in
solicitations and contracts by reference.
(b) Other parts, subparts, and sections of this regulation (48 CFR
chapter 1) may define other words or terms and those definitions only
apply to the part, subpart, or section where the word or term is
defined.
Subpart 2.1--Definitions, Acronyms, and Abbreviations
2.101 Definitions.
A word or a term, defined in this section, has the same meaning
throughout the FAR unless the context in which the word or term is used
clearly requires a different meaning or another FAR part, subpart, or
section provides a different definition for the particular part or
portion of the part. If a word or term that is defined in this section
is defined differently in another part, subpart, or section of this
chapter, the definition in this section includes a cross-reference to
the other definitions and that part, subpart, or section applies to the
word or term when used in that part, subpart, or section.
Acquisition means the acquiring by contract with appropriated funds
of supplies or services (including construction) by and for the use of
the Federal Government through purchase or lease, whether the supplies
or services are already in existence or must be created, developed,
demonstrated, and evaluated. Acquisition begins at the point when
agency needs are established and includes the description of
requirements to satisfy agency needs, solicitation and selection of
sources, award of contracts, contract financing, contract performance,
contract administration, and those technical and management functions
directly related to the process of fulfilling agency needs by contract.
Acquisition planning means the process by which the efforts of all
personnel responsible for an acquisition are coordinated and integrated
through a comprehensive plan for fulfilling the agency need in a timely
manner and at a reasonable cost. It includes developing the overall
strategy for managing the acquisition.
Adequate evidence means information sufficient to support the
reasonable belief that a particular act or omission has occurred.
Advisory and assistance services (A&AS) means those services
provided under contract by nongovernmental sources to support or
improve: organizational policy development; decision-making; management
and administration; program and/or project management and
administration; or R&D activities. It can also mean the furnishing of
professional advice or assistance rendered to improve the effectiveness
of Federal management processes or procedures (including those of an
engineering and technical nature). In rendering the foregoing services,
outputs may take the form of information, advice, opinions,
alternatives, analyses, evaluations, recommendations, training and the
day-to-day aid of support personnel needed for the successful
performance of ongoing Federal operations. All advisory and assistance
services are classified in one of the following definitional
subdivisions:
(1) Management and professional support services, i.e., contractual
services that provide assistance, advice or training for the efficient
and effective management and operation of organizations, activities
(including management and support services for R&D activities), or
systems. These services are normally closely related to the basic
responsibilities and mission of the agency originating the requirement
for the acquisition of services by contract. Included are efforts that
support or contribute to improved organization of program management,
logistics management, project monitoring and reporting, data
collection, budgeting, accounting, performance auditing, and
administrative technical support for conferences and training programs.
(2) Studies, analyses and evaluations, i.e., contracted services
that provide organized, analytical assessments/evaluations in support
of policy development, decision-making, management, or administration.
Included are studies in support of R&D activities. Also included are
[[Page 37573]]
acquisitions of models, methodologies, and related software supporting
studies, analyses or evaluations.
(3) Engineering and technical services, i.e., contractual services
used to support the program office during the acquisition cycle by
providing such services as systems engineering and technical direction
(see 9.505-1(b)) to ensure the effective operation and maintenance of a
weapon system or major system as defined in OMB Circular No. A-109 or
to provide direct support of a weapon system that is essential to
research, development, production, operation or maintenance of the
system.
Affiliates means associated business concerns or individuals if,
directly or indirectly either one controls or can control the other; or
third party controls or can control both, except as follows:
(1) For use in subpart 9.4, see the definition at 9.403.
(2) For use of affiliates in size determinations, see the
definition of ``small business concern'' in this section.
Agency head or head of the agency means the Secretary, Attorney
General, Administrator, Governor, Chairperson, or other chief official
of an executive agency, unless otherwise indicated, including any
deputy or assistant chief official of an executive agency.
Alternate means a substantive variation of a basic provision or
clause prescribed for use in a defined circumstance. It adds wording
to, deletes wording from, or substitutes specified wording for a
portion of the basic provision or clause. The alternate version of a
provision or clause is the basic provision or clause as changed by the
addition, deletion, or substitution (see 52.105(a)).
Architect-engineer services, as defined in 40 U.S.C. 1102, means--
(1) Professional services of an architectural or engineering
nature, as defined by State law, if applicable, that are required to be
performed or approved by a person licensed, registered, or certified to
provide those services;
(2) Professional services of an architectural or engineering nature
performed by contract that are associated with research, planning,
development, design, construction, alteration, or repair of real
property; and
(3) Those other professional services of an architectural or
engineering nature, or incidental services, that members of the
architectural and engineering professions (and individuals in their
employ) may logically or justifiably perform, including studies,
investigations, surveying and mapping, tests, evaluations,
consultations, comprehensive planning, program management, conceptual
designs, plans and specifications, value engineering, construction
phase services, soils engineering, drawing reviews, preparation of
operating and maintenance manuals, and other related services.
Assignment of claims means the transfer or making over by the
contractor to a bank, trust company, or other financing institution, as
security for a loan to the contractor, of its right to be paid by the
Government for contract performance.
Assisted acquisition means a type of interagency acquisition where
a servicing agency performs acquisition activities on a requesting
agency's behalf, such as awarding and administering a contract, task
order, or delivery order.
Basic research means that research directed toward increasing
knowledge in science. The primary aim of basic research is a fuller
knowledge or understanding of the subject under study, rather than any
practical application of that knowledge.
Best value means the expected outcome of an acquisition that, in
the Government's estimation, provides the greatest overall benefit in
response to the requirement.
Bid sample means a product sample required to be submitted by an
offeror to show characteristics of the offered products that cannot
adequately be described by specifications, purchase descriptions, or
the solicitation (e.g., balance, facility of use, or pattern).
Biobased product means a product determined by the U.S. Department
of Agriculture to be a commercial product or industrial product (other
than food or feed) that is composed, in whole or in significant part,
of biological products, including renewable domestic agricultural
materials and forestry materials, or that is an intermediate ingredient
or feedstock. The term includes, with respect to forestry materials,
forest products that meet biobased content requirements,
notwithstanding the market share the product holds, the age of the
product, or whether the market for the product is new or emerging. (7
U.S.C. 8101) (7 CFR 4270.2).
Broad agency announcement (BAA) means a general announcement of an
agency's research interest including criteria for selecting proposals
and soliciting the participation of all offerors capable of satisfying
the Government's needs.
Building or work means construction activity as distinguished from
manufacturing, furnishing of materials, or servicing and maintenance
work. The terms include, without limitation, buildings, structures, and
improvements of all types, such as bridges, dams, plants, highways,
parkways, streets, subways, tunnels, sewers, mains, power lines,
pumping stations, heavy generators, railways, airports, terminals,
docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters,
levees, canals, dredging, shoring, rehabilitation and reactivation of
plants, scaffolding, drilling, blasting, excavating, clearing, and
landscaping. The manufacture or furnishing of materials, articles,
supplies, or equipment (whether or not a Federal or State agency
acquires title to such materials, articles, supplies, or equipment
during the course of the manufacture or furnishing, or owns the
materials from which they are manufactured or furnished) is not
``building'' or ``work'' within the meaning of this definition unless
conducted in connection with and at the site of such building or work
as is described in the foregoing sentence, or under the United States
Housing Act of 1937 and the Housing Act of 1949 in the construction or
development of the project.
Bundling--
(1) Means a subset of consolidation that combines two or more
requirements for supplies or services, previously provided or performed
under separate smaller contracts (see paragraph (2) of this
definition), into a solicitation for a single contract, a multiple-
award contract, or a task or delivery order that is likely to be
unsuitable for award to a small business concern (even if it is
suitable for award to a small business with a Small Business Teaming
Arrangement) due to--
(i) The diversity, size, or specialized nature of the elements of
the performance specified;
(ii) The aggregate dollar value of the anticipated award;
(iii) The geographical dispersion of the contract performance
sites; or
(iv) Any combination of the factors described in paragraphs (1)(i),
(ii), and (iii) of this definition.
(2) ``Separate smaller contract'' as used in this definition, means
a contract that has been performed by one or more small business
concerns or that was suitable for award to one or more small business
concerns.
Business unit means any segment of an organization, or an entire
business organization that is not divided into segments.
[[Page 37574]]
Certified cost or pricing data means ``cost or pricing data'' that
were required to be submitted in accordance with FAR 15.403-3 and have
been certified, or are required to be certified, in accordance with
15.403-4. This certification states that, to the best of the person's
knowledge and belief, the cost or pricing data are accurate, complete,
and current as of a date certain before contract award. Cost or pricing
data are required to be certified in certain procurements (10 U.S.C.
chapter 271 and 41 U.S.C. chapter 35).
Change-of-name agreement means a legal instrument executed by the
contractor and the Government that recognizes the legal change of name
of the contractor without disturbing the original contractual rights
and obligations of the parties.
Change order means a written order, signed by the contracting
officer, directing the contractor to make a change that the Changes
clause authorizes the contracting officer to order without the
contractor's consent.
Chief Acquisition Officer means an executive level acquisition
official responsible for agency performance of acquisition activities
and acquisition programs created pursuant to 41 U.S.C. 1702.
Chief of mission means the principal officer in charge of a
diplomatic mission of the United States or of a United States office
abroad which is designated by the Secretary of State as diplomatic in
nature, including any individual assigned under section 502(c) of the
Foreign Service Act of 1980 (Public Law 96-465) to be temporarily in
charge of such a mission or office.
Claim means a written demand or written assertion by one of the
contracting parties seeking, as a matter of right, the payment of money
in a sum certain, the adjustment or interpretation of contract terms,
or other relief arising under or relating to the contract. However, a
written demand or written assertion by the contractor seeking the
payment of money exceeding $100,000 is not a claim under 41 U.S.C.
chapter 71, Contract Disputes, until certified as required by the
statute. A voucher, invoice, or other routine request for payment that
is not in dispute when submitted is not a claim. The submission may be
converted to a claim, by written notice to the contracting officer, if
it is disputed either as to liability or amount or is not acted upon in
a reasonable time.
Classified acquisition means an acquisition in which offerors must
have access to classified information to properly submit an offer or
quotation, to understand the performance requirements, or to perform
the contract.
Classified contract means any contract in which the contractor or
its employees must have access to classified information during
contract performance. A contract may be a classified contract even
though the contract document itself is unclassified.
Classified information means any knowledge that can be communicated
or any documentary material, regardless of its physical form or
characteristics, that--
(1)(i) Is owned by, is produced by or for, or is under the control
of the United States Government; or
(ii) Has been classified by the Department of Energy as privately
generated restricted data following the procedures in 10 CFR 1045.21;
and
(2) Must be protected against unauthorized disclosure according to
Executive Order 12958, Classified National Security Information, April
17, 1995, or classified in accordance with the Atomic Energy Act of
1954.
Cognizant Federal agency means the Federal agency that, on behalf
of all Federal agencies, is responsible for establishing final indirect
cost rates and forward pricing rates, if applicable, and administering
cost accounting standards for all contracts in a business unit.
Combatant commander means the commander of a unified or specified
combatant command established in accordance with 10 U.S.C. 161.
Commercial and Government Entity (CAGE) code means--
(1) An identifier assigned to entities located in the United States
or its outlying areas by the Defense Logistics Agency (DLA) Commercial
and Government Entity (CAGE) Branch to identify a commercial or
government entity by unique location; or
(2) An identifier assigned by a member of the North Atlantic Treaty
Organization (NATO) or by the NATO Support and Procurement Agency
(NSPA) to entities located outside the United States and its outlying
areas that the DLA Commercial and Government Entity (CAGE) Branch
records and maintains in the CAGE master file. This type of code is
known as a NATO CAGE (NCAGE) code.
Commercial component means any component that is a commercial
product.
Commercial computer software means software developed or regularly
used for nongovernmental purposes which--
(1) Has been sold, leased, or licensed to the public;
(2) Has been offered for sale, lease, or license to the public;
(3) Has not been offered, sold, leased, or licensed to the public
but will be available for commercial sale, lease, or license in time to
satisfy the delivery requirements of this contract; or
(4) Satisfies a criterion expressed in paragraph (1), (2), or (3)
of this definition and would require only minor modification to meet
the requirements of this contract.
Commercial product means--
(1) A product, other than real property, that is of a type
customarily used by the general public or by nongovernmental entities
for purposes other than governmental purposes (i.e., purposes that are
not unique to a government), and--
(i) Has been sold, leased, or licensed to the general public; or
(ii) Has been offered for sale, lease, or license to the general
public;
(2) A product that evolved from a product described in paragraph
(1) of this definition through advances in technology or performance
and that is not yet available in the commercial marketplace, but will
be available in the commercial marketplace in time to satisfy the
delivery requirements under a Government solicitation;
(3) A product that would satisfy a criterion expressed in paragraph
(1) or (2) of this definition, except for--
(i) Modifications of a type customarily available in the commercial
marketplace; or
(ii) Minor modifications of a type not customarily available in the
commercial marketplace made to meet Federal Government requirements. A
minor modification does not significantly alter the function or
essential physical characteristics of an item or component, or change
the purpose of a process.
(4) Any combination of products meeting the requirements of
paragraph (1), (2), or (3) of this definition that are of a type
customarily combined and sold in combination to the general public;
(5) A product, or combination of products, referred to in
paragraphs (1) through (4) of this definition, even though the product,
or combination of products, is transferred between or among separate
divisions, subsidiaries, or affiliates of a contractor; or
(6) A nondevelopmental item-developed exclusively at private
expense and sold in substantial quantities, on a competitive basis, to
multiple State and local governments or to multiple foreign
governments.
Commercial service means--
(1) Installation services, maintenance services, repair services,
training services, and other services if--
[[Page 37575]]
(i) Such services are procured for support of a commercial product,
as defined in this section, regardless of whether such services are
provided by the same source or at the same time as the commercial
product; and
(ii) The source of such services provides similar services at the
same time to the general public under terms and conditions similar to
those offered to the Government;
(2) Services, including construction, of a type offered and sold
competitively in substantial quantities in the commercial marketplace
based on established catalog or market prices for specific tasks
performed or specific outcomes to be achieved and under standard
commercial terms and conditions. For purposes of these services--
(i) Catalog price means a price included in a catalog, price list,
schedule, or other form that the manufacturer or vendor regularly
maintains, customers can inspect, is either published or otherwise
available for inspection by customers, and states prices at which sales
are currently, or were last, made to a significant number of buyers
constituting the general public; and
(ii) Market prices means current prices that are established in the
course of ordinary trade between buyers and sellers free to bargain and
that can be substantiated through competition or from sources
independent of the offerors; or
(3) A service referred to in paragraph (1) or (2) of this
definition, even though the service is transferred between or among
separate divisions, subsidiaries, or affiliates of a contractor.
Commercially available off-the-shelf (COTS) item--
(1) Means any item of supply that is--
(i) A commercial product (as defined in paragraph (1) of the
definition of ``commercial product'' in this section);
(ii) Sold in substantial quantities in the commercial marketplace;
and
(iii) Offered to the Government without modification, in the same
form in which it is sold in the commercial marketplace; but
(2) Does not include bulk cargo, as defined in 46 U.S.C. 40102(4),
such as agricultural products and petroleum products.
Common item means material that is common to the applicable
Government contract and the contractor's other work, except that for
use in the clause at 52.246-26, see the definition in paragraph (a) of
that clause.
Component means any item supplied to the Government as part of an
end item or of another component, except that for use in--
(1) Part 25, see the definition in 25.002;
(2) 52.225-1 and 52.225-3, see the definition in 52.225-1(a) and
52.225-3(a);
(3) 52.225-9 and 52.225-11, see the definition in 52.225-9(a) and
52.225-11(a); and
(4) 52.225-21 and 52.225-23, see the definition in 52.225-21(a) and
52.225-23(a).
Computer database or database means a collection of recorded
information in a form capable of, and for the purpose of, being stored
in, processed, and operated on by a computer. The term does not include
computer software.
Computer software means computer programs, source code, source code
listings, object code listings, design details, algorithms, processes,
flow charts, formulae and related material that would enable the
software to be reproduced, recreated, or recompiled. Computer software
does not include computer databases or computer software documentation.
Computer software documentation means owner's manuals, user's
manuals, installation instructions, operating instructions, and other
similar items, regardless of storage medium, that explain the
capabilities of the computer software or provide instructions for using
the software.
Consent to subcontract means the contracting officer's written
consent for the prime contractor to enter into a particular
subcontract.
Consolidation or consolidated requirement--
(1) Means a solicitation for a single contract, a multiple-award
contract, a task order, or a delivery order to satisfy--
(i) Two or more requirements of the Federal agency for supplies or
services that have been provided to or performed for the Federal agency
under two or more separate contracts, each of which was lower in cost
than the total cost of the contract for which offers are solicited, the
total cost of which exceeds $2 million (including options); or
(ii) Requirements of the Federal agency for construction projects
to be performed at two or more discrete sites.
(2) Separate contract as used in this definition, means a contract
that has been performed by any business, including small and other than
small business concerns.
Construction means construction, alteration, or repair (including
dredging, excavating, and painting) of buildings, structures, or other
real property. For purposes of this definition, the terms ``buildings,
structures, or other real property'' include, but are not limited to,
improvements of all types, such as bridges, dams, plants, highways,
parkways, streets, subways, tunnels, sewers, mains, power lines,
cemeteries, pumping stations, railways, airport facilities, terminals,
docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters,
levees, canals, and channels. Construction does not include the
manufacture, production, furnishing, construction, alteration, repair,
processing, or assembling of vessels, aircraft, or other kinds of
personal property (except that for use in subpart 22.5, see the
definition at 22.501).
Contiguous United States (CONUS) means the 48 contiguous States and
the District of Columbia.
Contingency operation (10 U.S.C. 101(a)(13)) means a military
operation that--
(1) Is designated by the Secretary of Defense as an operation in
which members of the armed forces are or may become involved in
military actions, operations, or hostilities against an enemy of the
United States or against an opposing military force; or
(2) Results in the call or order to, or retention on, active duty
of members of the uniformed services under sections 688, 12301(a),
12302, 12304, 12304a, 12305, or 12406 of title 10 of the United States
Code, Chapter 13 of title 10 of the United States Code, and section
3713 of title 14 of the United States Code, or any other provision of
law during a war or during a national emergency declared by the
President or Congress.
Continued portion of the contract means the portion of a contract
that the contractor must continue to perform following a partial
termination.
Contract means a mutually binding legal relationship obligating the
seller to furnish the supplies or services (including construction) and
the buyer to pay for them. It includes all types of commitments that
obligate the Government to an expenditure of appropriated funds and
that, except as otherwise authorized, are in writing. In addition to
bilateral instruments, contracts include (but are not limited to)
awards and notices of awards; job orders or task letters issued under
basic ordering agreements; letter contracts; orders, such as purchase
orders, under which the contract becomes effective by written
acceptance or performance; and bilateral contract modifications.
Contracts do not include grants and cooperative agreements covered by
31 U.S.C. 6301, et seq. For discussion of various types of contracts,
see part 16.
[[Page 37576]]
Contract administration office (CAO) means an office that
performs--
(1) Assigned postaward functions related to the administration of
contracts; and
(2) Assigned preaward functions.
Contract clause or clause means a term or condition used in
contracts or in both solicitations and contracts, and applying after
contract award or both before and after award.
Contract modification means any written change in the terms of a
contract (see 43.203).
Contracting means purchasing, renting, leasing, or otherwise
obtaining supplies or services from nonfederal sources. Contracting
includes description (but not determination) of supplies and services
required, selection and solicitation of sources, preparation and award
of contracts, and all phases of contract administration. It does not
include making grants or cooperative agreements.
Contracting activity means an element of an agency designated by
the agency head and delegated broad authority regarding acquisition
functions.
Contracting office means an office that awards or executes a
contract for supplies or services and performs postaward functions not
assigned to a contract administration office (except for use in part
42, see 42.1401).
Contracting officer means a person with the authority to enter
into, administer, and/or terminate contracts and make related
determinations and findings. The term includes certain authorized
representatives of the contracting officer acting within the limits of
their authority as delegated by the contracting officer.
``Administrative contracting officer (ACO)'' refers to a contracting
officer who is administering contracts. ``Termination contracting
officer (TCO)'' refers to a contracting officer who is settling
terminated contracts. A single contracting officer may be responsible
for duties in any or all of these areas. Reference in this regulation
(48 CFR chapter 1) to administrative contracting officer or termination
contracting officer does not--
(1) Require that a duty be performed at a particular office or
activity; or
(2) Restrict in any way a contracting officer in the performance of
any duty properly assigned.
Contracting officer's representative (COR) means an individual,
including a contracting officer's technical representative (COTR),
designated and authorized in writing by the contracting officer to
perform specific technical or administrative functions.
Controlled unclassified information (CUI) means information that
the Government creates or possesses, or that an entity creates or
possesses for or on behalf of the Government, that a law, regulation,
or Governmentwide policy requires or permits an agency to handle using
safeguarding or dissemination controls. CUI does not include--
(1) Information that a Contractor possesses in its own system that
did not come from, or was not created or possessed by or for, an
executive branch agency or an entity acting for an agency (see 32 CFR
2002.4); or
(2) Federally-funded basic and applied research at colleges,
universities, and laboratories in accordance with National Security
Decision Directive 189; or
(3) Information a Contractor creates or possesses that a law,
regulation, or Governmentwide policy does not specifically require the
Contractor to handle using safeguarding or dissemination controls.
Conviction means a judgment or conviction of a criminal offense by
any court of competent jurisdiction, whether entered upon a verdict or
a plea, and includes a conviction entered upon a plea of nolo
contendere. For use in subpart 9.4, see the definition at 9.403. For
use in subpart 26.5, see the definition at 26.502.
Cost or pricing data (10 U.S.C. 3701(1) and 41 U.S.C. chapter 35)
means all facts that, as of the date of price agreement, or, if
applicable, an earlier date agreed upon between the parties that is as
close as practicable to the date of agreement on price, prudent buyers
and sellers would reasonably expect to affect price negotiations
significantly. Cost or pricing data are factual, not judgmental; and
are verifiable. While they do not indicate the accuracy of the
prospective contractor's judgment about estimated future costs or
projections, they do include the data forming the basis for that
judgment. Cost or pricing data are more than historical accounting
data; they are all the facts that can be reasonably expected to
contribute to the soundness of estimates of future costs and to the
validity of determinations of costs already incurred. They also
include, but are not limited to, such factors as--
(1) Vendor quotations;
(2) Nonrecurring costs;
(3) Information on changes in production methods and in production
or purchasing volume;
(4) Data supporting projections of business prospects and
objectives and related operations costs;
(5) Unit-cost trends such as those associated with labor
efficiency;
(6) Make-or-buy decisions;
(7) Estimated resources to attain business goals; and
(8) Information on management decisions that could have a
significant bearing on costs.
Cost realism means that the costs in an offeror's proposal--
(1) Are realistic for the work to be performed;
(2) Reflect a clear understanding of the requirements; and
(3) Are consistent with the various elements of the offeror's
technical proposal.
Cost sharing means an explicit arrangement under which the
contractor bears some of the burden of reasonable, allocable, and
allowable contract cost.
Covered territory business, as defined at 15 U.S.C. 632(ff) and 13
CFR 125.1, means a small business concern that has its principal office
located in the United States Virgin Islands, American Samoa, Guam, or
the Commonwealth of the Northern Mariana Islands.
Customs territory of the United States means the 50 States, the
District of Columbia, and Puerto Rico.
Data other than certified cost or pricing data means pricing data,
cost data, and judgmental information necessary for the contracting
officer to determine a fair and reasonable price or to determine cost
realism. Such data may include the identical types of data as certified
cost or pricing data, consistent with Table 15-1 of 15.408, but without
the certification. The data may also include, for example, sales data
and any information reasonably required to explain the offeror's
estimating process, including, but not limited to--
(1) The judgmental factors applied and the mathematical or other
methods used in the estimate, including those used in projecting from
known data; and
(2) The nature and amount of any contingencies included in the
proposed price.
Day means, unless otherwise specified, a calendar day.
Debarment means action taken by a suspending and debarring official
under 9.406 to exclude a contractor from Government contracting and
Government-approved subcontracting for a reasonable, specified period;
a contractor that is ``debarred'' is excluded.
Delivery order means an order for supplies placed against an
established contract or with Government sources.
Depreciation means a charge to current operations that distributes
the cost of a tangible capital asset, less estimated residual value,
over the estimated useful life of the asset in a
[[Page 37577]]
systematic and logical manner. It does not involve a process of
valuation. Useful life refers to the prospective period of economic
usefulness in a particular contractor's operations as distinguished
from physical life; it is evidenced by the actual or estimated
retirement and replacement practice of the contractor.
Descriptive literature means information provided by an offeror,
such as cuts, illustrations, drawings, and brochures, that shows a
product's characteristics or construction of a product or explains its
operation. The term includes only that information needed to evaluate
the acceptability of the product and excludes other information for
operating or maintaining the product.
Determination and findings (D&F) means a special form of written
approval by an authorized official that is required by statute or
regulation before taking certain contract actions. The determination is
a conclusion or decision supported by the findings. The findings are
statements of fact or reasons essential to support the determination
and must cover each requirement of the statute or regulation.
Direct acquisition means a type of interagency acquisition where a
requesting agency places an order directly against a servicing agency's
indefinite-delivery contract. The servicing agency manages the
indefinite-delivery contract but does not participate in the placement
or administration of an order.
Direct cost means any cost that is identified specifically with a
particular final cost objective. Direct costs are not limited to items
that are incorporated in the end product as material or labor. Costs
identified specifically with a contract are direct costs of that
contract. All costs identified specifically with other final cost
objectives of the contractor are direct costs of those cost objectives.
Drug-free workplace means the site(s) for the performance of work
done by the contractor in connection with a specific contract where
employees of the contractor are prohibited from engaging in the
unlawful manufacture, distribution, dispensing, possession, or use of a
controlled substance.
Earned value management system (EVMS) means a project management
tool that effectively integrates the project scope of work with cost,
schedule and performance elements for optimum project planning and
control. The qualities and operating characteristics of an earned value
management system are described in Electronic Industries Alliance
Standard 748 (EIA-748), Earned Value Management Systems. (See OMB
Circular A-11, Part 7.)
Economically disadvantaged women-owned small business (EDWOSB)
concern--(see definition of Women-Owned Small Business (WOSB) Program
in this section).
Effective date of termination means the date on which the notice of
termination requires the contractor to stop performance under the
contract. If the contractor receives the termination notice after the
date fixed for termination, then the effective date of termination
means the date the contractor receives the notice.
Electronic commerce means electronic techniques for accomplishing
business transactions including electronic mail or messaging, World
Wide Web technology, electronic bulletin boards, purchase cards,
electronic funds transfer, and electronic data interchange 41 U.S.C.
2301.
Electronic data interchange means a technique for electronically
transferring and storing formatted information between computers
utilizing established and published formats and codes, as authorized by
the applicable Federal Information Processing Standards.
Electronic Funds Transfer (EFT) means any transfer of funds, other
than a transaction originated by cash, check, or similar paper
instrument, that is initiated through an electronic terminal,
telephone, computer, or magnetic tape, for the purpose of ordering,
instructing, or authorizing a financial institution to debit or credit
an account. The term includes Automated Clearing House transfers,
Fedwire transfers, and transfers made at automatic teller machines and
point-of-sale terminals. For purposes of compliance with 31 U.S.C. 3332
and implementing regulations at 31 CFR part 208, the term ``electronic
funds transfer'' includes a Governmentwide commercial purchase card
transaction.
Electronic Funds Transfer (EFT) indicator means a four-character
suffix to the unique entity identifier. The suffix is assigned at the
discretion of the commercial, nonprofit, or Government entity to
establish additional System for Award Management records for
identifying alternative EFT accounts (see subpart 32.11) for the same
entity.
Emergency means any occasion or instance for which, in the
determination of the President, Federal assistance is needed to
supplement State and local efforts and capabilities to save lives and
to protect property and public health and safety, or to lessen or avert
the threat of a catastrophe in any part of the United States (42 U.S.C.
5122).
End product means supplies delivered under a line item of a
Government contract, except for use in part 25 and the associated
clauses at 52.225-1, 52.225-3, and 52.225-5, see the definitions in
25.002, 52.225-1(a), 52.225-3(a), and 52.225-5(a).
Excess personal property means any personal property under the
control of a Federal agency that the agency head determines is not
required for its needs or for the discharge of its responsibilities.
Executive agency means an executive department, a military
department, or any independent establishment within the meaning of 5
U.S.C. 101, 102, and 104(1), respectively, and any wholly owned
Government corporation within the meaning of 31 U.S.C. 9101.
Facilities capital cost of money means ``cost of money as an
element of the cost of facilities capital'' as used at 48 CFR
9904.414--Cost Accounting Standard--Cost of Money as an Element of the
Cost of Facilities Capital.
Federal agency means any executive agency or any independent
establishment in the legislative or judicial branch of the Government
(except the Senate, the House of Representatives, the Architect of the
Capitol, and any activities under the Architect's direction).
Federally-controlled facilities means--
(1) Federally-owned buildings or leased space, whether for single
or multi-tenant occupancy, and its grounds and approaches, all or any
portion of which is under the jurisdiction, custody or control of a
department or agency;
(2) Federally-controlled commercial space shared with non-
government tenants. For example, if a department or agency leased the
10th floor of a commercial building, the Directive applies to the 10th
floor only;
(3) Government-owned, contractor-operated facilities, including
laboratories engaged in national defense research and production
activities; and
(4) Facilities under a management and operating contract, such as
for the operation, maintenance, or support of a Government-owned or
Government-controlled research, development, special production, or
testing establishment.
Federally Funded Research and Development Centers (FFRDCs) means
activities that are sponsored under a broad charter by a Government
agency (or agencies) for the purpose of performing, analyzing,
integrating, supporting, and/or managing basic or applied research and/
or development, and that receive 70 percent or more of
[[Page 37578]]
their financial support from the Government; and--
(1) A long-term relationship is contemplated;
(2) Most or all of the facilities are owned or funded by the
Government; and
(3) The FFRDC has access to Government and supplier data,
employees, and facilities beyond that common in a normal contractual
relationship.
Federal information system (FIS) means an information system used
or operated by an executive agency, by a contractor of an executive
agency, or by another organization on behalf of an executive agency (40
U.S.C. 11331).
Final indirect cost rate means the indirect cost rate established
and agreed upon by the Government and the contractor as not subject to
change. It is usually established after the close of the contractor's
fiscal year (unless the parties decide upon a different period) to
which it applies. For cost-reimbursement research and development
contracts with educational institutions, it may be predetermined; that
is, established for a future period on the basis of cost experience
with similar contracts, together with supporting data.
First article means a preproduction model, initial production
sample, test sample, first lot, pilot lot, or pilot models.
First article testing means testing and evaluating the first
article for conformance with specified contract requirements before or
in the initial stage of production.
F.o.b. means free on board. This term is used in conjunction with a
physical point to determine--
(1) The responsibility and basis for payment of freight charges;
and
(2) Unless otherwise agreed, the point where title for goods passes
to the buyer or consignee.
F.o.b. destination means free on board at destination; i.e., the
seller or consignor delivers the goods on seller's or consignor's
conveyance at destination. Unless the contract provides otherwise, the
seller or consignor is responsible for the cost of shipping and risk of
loss. For use in the clause at 52.247-34, see the definition at 52.247-
34(a).
F.o.b. origin means free on board at origin; i.e., the seller or
consignor places the goods on the conveyance. Unless the contract
provides otherwise, the buyer or consignee is responsible for the cost
of shipping and risk of loss. For use in the clause at 52.247-29, see
the definition at 52.247-29(a).
Forward pricing rate agreement means a written agreement negotiated
between a contractor and the Government to make certain rates available
during a specified period for use in pricing contracts or
modifications. These rates represent reasonable projections of specific
costs that are not easily estimated for, identified with, or generated
by a specific contract, contract end item, or task. These projections
may include rates for such things as labor, indirect costs, material
obsolescence and usage, spare parts provisioning, and material
handling.
Forward pricing rate recommendation means a rate set unilaterally
by the administrative contracting officer for use by the Government in
negotiations or other contract actions when forward pricing rate
agreement negotiations have not been completed or when the contractor
will not agree to a forward pricing rate agreement.
Freight means supplies, goods, and transportable property.
Full and open competition, when used with respect to a contract
action, means that all responsible sources are permitted to compete.
General and administrative (G&A) expense means any management,
financial, and other expense which is incurred by or allocated to a
business unit and which is for the general management and
administration of the business unit as a whole. G&A expense does not
include those management expenses whose beneficial or causal
relationship to cost objectives can be more directly measured by a base
other than a cost input base representing the total activity of a
business unit during a cost accounting period.
Governmentwide acquisition contract (GWAC) means a task-order or
delivery-order contract for information technology established by one
agency for Governmentwide use that is operated--
(1) By an executive agent designated by the Office of Management
and Budget pursuant to 40 U.S.C. 11302(e); or
(2) Under a delegation of procurement authority issued by the
General Services Administration (GSA) prior to August 7, 1996, under
authority granted GSA by former section 40 U.S.C. 759, repealed by
Public Law 104-106. The Economy Act does not apply to orders under a
Governmentwide acquisition contract.
Governmentwide commercial purchase card means a purchase card,
similar in nature to a commercial credit card, issued to authorized
agency personnel to use to acquire and to pay for supplies and
services.
Governmentwide point of entry (GPE) means the single point where
Government business opportunities, including synopses of proposed
contract actions, solicitations, and associated information, can be
accessed electronically by the public. The GPE is located at https://www.sam.gov.
Head of the agency (see ``agency head'').
Head of the contracting activity (HCA) means the official who has
overall responsibility for managing the contracting activity.
HUBZone means a historically underutilized business zone that is an
area located within one or more qualified census tracts, qualified
nonmetropolitan counties, lands within the external boundaries of an
Indian reservation, qualified base closure areas, redesignated areas,
governor-designated covered areas, or qualified disaster areas, as
defined in 13 CFR 126.103.
HUBZone contract means a contract awarded to a Small Business
Administration certified ``HUBZone small business concern'' through any
of the following procurement methods:
(1) A sole-source award to a HUBZone small business concern.
(2) Set-aside awards based on competition restricted to HUBZone
small business concerns.
(3) Awards to HUBZone small business concerns through full and open
competition after a price evaluation preference in favor of HUBZone
small business concerns.
(4) Awards based on a reserve for HUBZone small business concerns
in a solicitation for a multiple-award contract.
HUBZone small business concern means a small business concern that
meets the requirements described in 13 CFR 126.200, is certified by the
Small Business Administration (SBA) and designated by SBA as a HUBZone
small business concern in the Dynamic Small Business Search (13 CFR
126.103). SBA's designation also appears in SAM.
Humanitarian or peacekeeping operation means a military operation
in support of the provision of humanitarian or foreign disaster
assistance or in support of a peacekeeping operation under chapter VI
or VII of the Charter of the United Nations. The term does not include
routine training, force rotation, or stationing (10 U.S.C. 3015(2) and
41 U.S.C. 153(2)).
In writing, writing, or written means any worded or numbered
expression that can be read, reproduced, and later communicated, and
includes electronically transmitted and stored information.
Indirect cost means any cost not directly identified with a single
final
[[Page 37579]]
cost objective, but identified with two or more final cost objectives
or with at least one intermediate cost objective.
Indirect cost rate means the percentage or dollar factor that
expresses the ratio of indirect expense incurred in a given period to
direct labor cost, manufacturing cost, or another appropriate base for
the same period (see also ``final indirect cost rate'').
Ineligible means excluded from Government contracting (and
subcontracting, if appropriate) pursuant to statutory, Executive order,
or regulatory authority other than this regulation (48 CFR chapter 1)
and its implementing and supplementing regulations; for example,
pursuant to--
(1) 40 U.S.C. chapter 31, subchapter IV, Wage Rate Requirements
(Construction), and its related statutes and implementing regulations;
(2) 41 U.S.C. chapter 67, Service Contract Labor Standards;
(3) The Equal Employment Opportunity Acts and Executive orders;
(4) 41 U.S.C. chapter 65, Contracts for Material, Supplies,
Articles, and Equipment Exceeding $10,000;
(5) 41 U.S.C. chapter 83, Buy American; or
(6) The Environmental Protection Acts and Executive orders.
Information and communication technology (ICT) means information
technology and other equipment, systems, technologies, or processes,
for which the principal function is the creation, manipulation,
storage, display, receipt, or transmission of electronic data and
information, as well as any associated content. Examples of ICT include
but are not limited to the following: Computers and peripheral
equipment; information kiosks and transaction machines;
telecommunications equipment; customer premises equipment;
multifunction office machines; software; applications; websites;
videos; and electronic documents.
Information security means protecting information and information
systems from unauthorized access, use, disclosure, disruption,
modification, or destruction in order to provide--
(1) Integrity, which means guarding against improper information
modification or destruction, and includes ensuring information
nonrepudiation and authenticity;
(2) Confidentiality, which means preserving authorized restrictions
on access and disclosure, including means for protecting personal
privacy and proprietary information; and
(3) Availability, which means ensuring timely and reliable access
to, and use of, information.
Information system means a discrete set of information resources
organized for the collection, processing, maintenance, use, sharing,
dissemination, or disposition of information (44 U.S.C. 3502(8)).
Information technology means any equipment, or interconnected
system(s) or subsystem(s) of equipment, that is used in the automatic
acquisition, storage, analysis, evaluation, manipulation, management,
movement, control, display, switching, interchange, transmission, or
reception of data or information by the agency.
(1) For purposes of this definition, equipment is used by an agency
if the equipment is used by the agency directly or is used by a
contractor under a contract with the agency that requires--
(i) Its use; or
(ii) To a significant extent, its use in the performance of a
service or the furnishing of a product.
(2) The term ``information technology'' includes computers,
ancillary equipment (including imaging peripherals, input, output, and
storage devices necessary for security and surveillance), peripheral
equipment designed to be controlled by the central processing unit of a
computer, software, firmware and similar procedures, services
(including support services), and related resources.
(3) The term ``information technology'' does not include any
equipment that--
(i) Is acquired by a contractor incidental to a contract; or
(ii) Contains imbedded information technology that is used as an
integral part of the product, but the principal function of which is
not the acquisition, storage, analysis, evaluation, manipulation,
management, movement, control, display, switching, interchange,
transmission, or reception of data or information. For example, HVAC
(heating, ventilation, and air conditioning) equipment, such as
thermostats or temperature control devices, and medical equipment where
information technology is integral to its operation, are not
information technology.
Inherently governmental function means, as a matter of policy, a
function that is so intimately related to the public interest as to
mandate performance by Government employees. This definition is a
policy determination, not a legal determination. An inherently
governmental function includes activities that require either the
exercise of discretion in applying Government authority, or the making
of value judgments in making decisions for the Government. Governmental
functions normally fall into two categories: the act of governing,
i.e., the discretionary exercise of Government authority, and monetary
transactions and entitlements.
(1) An inherently governmental function involves, among other
things, the interpretation and execution of the laws of the United
States so as to--
(i) Bind the United States to take or not to take some action by
contract, policy, regulation, authorization, order, or otherwise;
(ii) Determine, protect, and advance United States economic,
political, territorial, property, or other interests by military or
diplomatic action, civil or criminal judicial proceedings, contract
management, or otherwise;
(iii) Significantly affect the life, liberty, or property of
private persons;
(iv) Commission, appoint, direct, or control officers or employees
of the United States; or
(v) Exert ultimate control over the acquisition, use, or
disposition of the property, real or personal, tangible or intangible,
of the United States, including the collection, control, or
disbursement of Federal funds.
(2) Inherently governmental functions do not normally include
gathering information for or providing advice, opinions,
recommendations, or ideas to Government officials. They also do not
include functions that are primarily ministerial and internal in
nature, such as building security, mail operations, operation of
cafeterias, housekeeping, facilities operations and maintenance,
warehouse operations, motor vehicle fleet management operations, or
other routine electrical or mechanical services.
Inspection means examining and testing supplies or services
(including, when appropriate, raw materials, components, and
intermediate assemblies) to determine whether they conform to contract
requirements.
Insurance means a contract that provides that for a stipulated
consideration, one party undertakes to indemnify another against loss,
damage, or liability arising from an unknown or contingent event.
Interagency acquisition means a procedure by which an agency
needing supplies or services (the requesting agency) obtains them from
another agency (the servicing agency), by an assisted acquisition or a
direct acquisition. The term includes--
(1) Acquisitions under the Economy Act (31 U.S.C. 1535); and
[[Page 37580]]
(2) Non-Economy Act acquisitions completed under other statutory
authorities (e.g., General Services Administration Federal Supply
Schedules in subpart 8.4 and Governmentwide acquisition contracts
(GWACs)).
Invoice means a contractor's bill or written request for payment
under the contract for supplies delivered or services performed (see
also ``proper invoice'').
Irrevocable letter of credit means a written commitment by a
federally insured financial institution to pay all or part of a stated
amount of money, until the expiration date of the letter, upon the
Government's (the beneficiary) presentation of a written demand for
payment. Neither the financial institution nor the offeror/contractor
can revoke or condition the letter of credit.
Labor surplus area means a geographical area identified by the
Department of Labor in accordance with 20 CFR part 654, subpart A, as
an area of concentrated unemployment or underemployment or an area of
labor surplus.
Labor surplus area concern means a concern that together with its
first-tier subcontractors will perform substantially in labor surplus
areas. Performance is substantially in labor surplus areas if the costs
incurred under the contract on account of manufacturing, production, or
performance of appropriate services in labor surplus areas exceed 50
percent of the contract price.
Latent defect means a defect that exists at the time of acceptance
but cannot be discovered by a reasonable inspection.
Line item means the basic structural element in a procurement
instrument that describes and organizes the required product or service
for pricing, delivery, inspection, acceptance, invoicing, and payment.
The use of the term ``line item'' includes ``subline item,'' as
applicable.
Line item number means either a numeric or alphanumeric format to
identify a line item.
Major disaster means any natural catastrophe (including any
hurricane, tornado, storm, high water, winddriven water, tidal wave,
tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm,
or drought), or regardless of cause, any fire, flood, or explosion, in
any part of the United States, which, in the determination of the
President, causes damage of sufficient severity and magnitude to
warrant major disaster assistance under the Stafford Act to supplement
the efforts and available resources of States, local governments, and
disaster relief organizations in alleviating the damage, loss,
hardship, or suffering caused thereby (42 U.S.C. 5122).
Major system means that combination of elements that will function
together to produce the capabilities required to fulfill a mission
need. The elements may include hardware, equipment, software, or any
combination thereof, but exclude construction or other improvements to
real property. A system is a major system if--
(1) The Department of Defense is responsible for the system and the
total expenditures for research, development, test, and evaluation for
the system are estimated to be more than $275 million based on Fiscal
Year 2024 constant dollars or the eventual total expenditure for the
acquisition exceeds $1.3 billion based on Fiscal Year 2024 constant
dollars (or any update of these thresholds based on a more recent
fiscal year, as specified in the DoD Instruction 5000.85, ``Major
Capability Acquisition'');
(2) A civilian agency is responsible for the system and total
expenditures for the system are estimated to exceed $2 million or the
dollar threshold for a ``major system'' established by the agency,
whichever is greater; or
(3) The system is designated a ``major system'' by the head of the
agency responsible for the system (10 U.S.C. 3041 and 41 U.S.C. 109).
Manufactured end product means any end product in product and
service codes (PSC) 1000-9999, except--
(1) PSC 5510, Lumber and Related Basic Wood Materials;
(2) Product or service group (PSG) 87, Agricultural Supplies;
(3) PSG 88, Live Animals;
(4) PSG 89, Subsistence;
(5) PSC 9410, Crude Grades of Plant Materials;
(6) PSC 9430, Miscellaneous Crude Animal Products, Inedible;
(7) PSC 9440, Miscellaneous Crude Agricultural and Forestry
Products;
(8) PSC 9610, Ores;
(9) PSC 9620, Minerals, Natural and Synthetic; and
(10) PSC 9630, Additive Metal Materials.
Market research means collecting and analyzing information about
capabilities within the market to satisfy agency needs.
Master solicitation means a document containing special clauses and
provisions that have been identified as essential for the acquisition
of a specific type of supply or service that is acquired repetitively.
May denotes the permissive. However, the words ``no person may . .
.'' means that no person is required, authorized, or permitted to do
the act described.
Micro-purchase means an acquisition of supplies or services, the
aggregate amount of which does not exceed the micro-purchase threshold
when using the procedures in subpart 12.4.
Micro-purchase threshold (MPT) means $15,000, except it means--
(1) For acquisitions of construction subject to 40 U.S.C. chapter
31, subchapter IV, Wage Rate Requirements (Construction), $2,000;
(2) For acquisitions of services subject to 41 U.S.C. chapter 67,
Service Contract Labor Standards, $2,500;
(3) For acquisitions of supplies or services that, as determined by
the head of the agency, are to be used to support a contingency
operation; to facilitate defense against or recovery from cyber,
nuclear, biological, chemical or radiological attack; to support a
request from the Secretary of State or the Administrator of the United
States Agency for International Development to facilitate provision of
international disaster assistance pursuant to 22 U.S.C. 2292 et seq.;
or to support response to an emergency or major disaster (42 U.S.C.
5122), as described in 13.201(g)(1), except for construction subject to
40 U.S.C. chapter 31, subchapter IV, Wage Rate Requirements
(Construction) (41 U.S.C. 1903)--
(i) $25,000 in the case of any contract to be awarded and
performed, or purchase to be made, inside the United States; and
(ii) $40,000 in the case of any contract to be awarded and
performed, or purchase to be made, outside the United States; and
(4) For acquisitions of supplies or services from institutions of
higher education (20 U.S.C. 1001(a)) or related or affiliated nonprofit
entities, or from nonprofit research organizations or independent
research institutes--
(i) $15,000; or
(ii) A higher threshold, as determined appropriate by the head of
the agency and consistent with clean audit findings under 31 U.S.C.
chapter 75, Requirements for Single Audits; an internal institutional
risk assessment; or State law.
Multi-agency contract means a task-order or delivery-order contract
established by one agency for use by Government agencies to obtain
supplies and services, consistent with the Economy Act (see 17.502-2).
Multi-agency contracts include contracts for information technology
established pursuant to 40 U.S.C. 11314(a)(2).
Multiple-award contract (MAC) means a contract that is--
[[Page 37581]]
(1) A Multiple Award Schedule contract issued by GSA (e.g., GSA
Schedule Contract) or agencies granted Multiple Award Schedule contract
authority by GSA (e.g., Department of Veterans Affairs) as described in
FAR part 8;
(2) A multiple-award task-order or delivery-order contract issued
in accordance with FAR subpart 16.5, including Governmentwide
acquisition contracts; or
(3) Any other indefinite-delivery, indefinite-quantity contract
entered into with two or more sources pursuant to the same
solicitation.
Must denotes the imperative.
National defense means any activity related to programs for
military or atomic energy production or construction, military
assistance to any foreign nation, stockpiling, or space, except that
for use in subpart 11.6, see the definition in 11.601.
Neutral person means an impartial third party, who serves as a
mediator, fact finder, or arbitrator, or otherwise functions to assist
the parties to resolve the issues in controversy. A neutral person may
be a permanent or temporary officer or employee of the Federal
Government or any other individual who is acceptable to the parties. A
neutral person must have no official, financial, or personal conflict
of interest with respect to the issues in controversy, unless the
interest is fully disclosed in writing to all parties and all parties
agree that the neutral person may serve (5 U.S.C. 583).
Nondevelopmental item means--
(1) Any previously developed item of supply used exclusively for
governmental purposes by a Federal agency, a State or local government,
or a foreign government with which the United States has a mutual
defense cooperation agreement;
(2) Any item described in paragraph (1) of this definition that
requires only minor modification or modifications of a type customarily
available in the commercial marketplace in order to meet the
requirements of the procuring department or agency; or
(3) Any item of supply being produced that does not meet the
requirements of paragraphs (1) or (2) solely because the item is not
yet in use.
Novation agreement means a legal instrument--
(1) Executed by the--
(i) Contractor (transferor);
(ii) Successor in interest (transferee); and
(iii) Government; and
(2) By which, among other things, the transferor guarantees
performance of the contract, the transferee assumes all obligations
under the contract, and the Government recognizes the transfer of the
contract and related assets.
Offer means a response to a solicitation that, if accepted, would
bind the offeror to perform the resultant contract.
(1) It includes responses to invitations for bids (sealed bidding)
called ``bids'' or ``sealed bids'' and responses to requests for
proposals (negotiation) called ``proposals.''
(2) It does not include responses to requests for quotations or
``quotations.''
Offeror means an entity that makes an offer or bid, except as used
in part 27, see the definition at 27.401.
Office of Small and Disadvantaged Business Utilization (OSDBU)
means the Office of Small Business Programs when referring to the
Department of Defense.
OMB Uniform Guidance at 2 CFR part 200 is the abbreviated title for
Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (2 CFR part 200), which supersedes OMB
Circulars A-21, A-87, A-89, A-102, A-110, A-122, and A-133, and the
guidance in Circular A-50 on Audit Followup.
Option means a unilateral right in a contract by which, for a
specified time, the Government may elect to purchase additional
supplies or services called for by the contract, or may elect to extend
the term of the contract.
Organizational conflict of interest means that because of other
activities or relationships with other persons, a person is unable or
potentially unable to render impartial assistance or advice to the
Government, or the person's objectivity in performing the contract work
is or might be otherwise impaired, or a person has an unfair
competitive advantage.
Outlying areas means--
(1) Commonwealths. (i) Puerto Rico.
(ii) The Northern Mariana Islands;
(2) Territories. (i) American Samoa.
(ii) Guam.
(iii) U.S. Virgin Islands; and
(3) Minor outlying islands. (i) Baker Island.
(ii) Howland Island.
(iii) Jarvis Island.
(iv) Johnston Atoll.
(v) Kingman Reef.
(vi) Midway Islands.
(vii) Navassa Island.
(viii) Palmyra Atoll.
(ix) Wake Atoll.
Overtime means time worked by a contractor's employee in excess of
the employee's normal workweek.
Partial termination means the termination of a part, but not all,
of the work that has not been completed and accepted under a contract.
Past performance means an offeror's or contractor's performance on
active and physically completed contracts.
Performance-based acquisition means an acquisition structured
around the results to be achieved as opposed to the manner by which the
work is to be performed.
Performance Work Statement (PWS) means a statement of work for
performance-based acquisitions that describes the required results in
clear, specific and objective terms with measurable outcomes.
Personal property means property of any kind or interest in it
except real property, records of the Federal Government, and naval
vessels of the following categories:
(1) Battleships;
(2) Cruisers;
(3) Aircraft carriers;
(4) Destroyers; and
(5) Submarines.
Personal services contract means a contract that, by its express
terms or as administered, makes the contractor personnel appear to be,
in effect, Government employees (see 37.104).
Plant clearance officer means an authorized representative of the
contracting officer, appointed in accordance with agency procedures,
responsible for screening, redistributing, and disposing of contractor
inventory from a contractor's plant or work site. The term
``contractor's plant'' includes, but is not limited to, Government-
owned contractor-operated plants, Federal installations, and Federal
and non-Federal industrial operations, as may be required under the
scope of the contract.
Power of attorney means the authority given one person or
corporation to act for and obligate another, as specified in the
instrument creating the power; in corporate suretyship, an instrument
under seal that appoints an attorney-in-fact to act in behalf of a
surety company in signing bonds (see also ``attorney-in-fact'' at
28.001).
Preaward survey means an evaluation of a prospective contractor's
capability to perform a proposed contract.
Preponderance of the evidence means proof by information that,
compared with that opposing it, leads to the conclusion that the fact
at issue is more probably true than not.
Pricing means the process of establishing a reasonable amount or
amounts to be paid for supplies or services.
Principal means an officer, director, owner, partner, or a person
having primary management or supervisory responsibilities within a
business entity (e.g., general manager; plant manager;
[[Page 37582]]
head of a division or business segment; and similar positions).
Procurement (see ``acquisition'').
Procuring activity means a component of an executive agency having
a significant acquisition function and designated as such by the head
of the agency. Unless agency regulations specify otherwise, the term
``procuring activity'' is synonymous with ``contracting activity.''
Products has the same meaning as supplies.
Proper invoice means an invoice that meets the minimum standards
specified in 32.905(b).
Purchase order, when issued by the Government, means an offer by
the Government to buy supplies or services, including construction and
research and development, upon specified terms and conditions, using
simplified acquisition procedures.
Qualifying offeror means an offeror that is determined to be a
responsible source, submits a technically acceptable proposal that
conforms to the requirements of the solicitation, and the contracting
officer has no reason to believe would be likely to offer other than
fair and reasonable pricing (10 U.S.C. 3206(c)(4)).
Receiving report means written evidence that indicates Government
acceptance of supplies delivered or services performed (see subpart
46.6). Receiving reports must meet the requirements of 32.905(c).
Recovered material means waste materials and by-products recovered
or diverted from solid waste, but the term does not include those
materials and by-products generated from, and commonly reused within,
an original manufacturing process. (42 U.S.C. 6903)
Requesting agency means the agency that has the requirement for an
interagency acquisition.
Residual value means the proceeds, less removal and disposal costs,
if any, realized upon disposition of a tangible capital asset. It
usually is measured by the net proceeds from the sale or other
disposition of the asset, or its fair value if the asset is traded in
on another asset. The estimated residual value is a current forecast of
the residual value.
Responsible audit agency means the agency that is responsible for
performing all required contract audit services at a business unit.
Responsible prospective contractor means a contractor that meets
the standards in 9.104.
Reverse auction means a real-time auction generally conducted
through an electronic medium among two or more offerors who compete by
submitting bids for an award of a supply contract, service contract,
purchase order, or blanket purchase agreement, or for an award of an
order under a contract or blanket purchase agreement, with the ability
to submit revised lower bids at any time before the closing of the
auction (section 2 of the Construction Consensus Procurement
Improvement Act of 2021 (Pub. L. 117-28)).
SAM Contract Awards Management means the contract award reporting
module in SAM.gov, which is the successor system to the Federal
Procurement Data System.
Scrap means personal property that has no value except its basic
metallic, mineral, or organic content.
Segment means one of two or more divisions, product departments,
plants, or other subdivisions of an organization reporting directly to
a home office, usually identified with responsibility for profit and/or
producing a product or service. The term includes--
(1) Government-owned contractor-operated facilities; and
(2) Joint ventures and subsidiaries (domestic and foreign) in which
the organization has--
(i) A majority ownership; or
(ii) Less than a majority ownership, but over which it exercises
control.
Self-insurance means the assumption or retention of the risk of
loss by the contractor, whether voluntarily or involuntarily. Self-
insurance includes the deductible portion of purchased insurance.
Senior procurement executive (SPE) means the individual appointed
pursuant to 41 U.S.C. 1702(c) who is responsible for management
direction of the acquisition system of the executive agency, including
implementation of the unique acquisition policies, regulations, and
standards of the executive agency.
Service-disabled veteran-owned small business (SDVOSB) concern
means a small business concern--
(1)(i) Not less than 51 percent of which is owned and controlled by
one or more service-disabled veterans or, in the case of any publicly
owned business, not less than 51 percent of the stock of which is owned
by one or more service-disabled veterans; and
(ii) The management and daily business operations of which are
controlled by one or more service-disabled veterans or, in the case of
a service-disabled veteran with permanent and severe disability, the
spouse or permanent caregiver of such veteran; or
(2) A small business concern eligible under the SDVOSB Program in
accordance with 13 CFR part 128 (see 19.106).
(3) Service-disabled veteran, as used in this definition, means a
veteran as defined in 38 U.S.C. 101(2), with a disability that is
service-connected, as defined in 38 U.S.C. 101(16), and who is
registered in the Beneficiary Identification and Records Locator
Subsystem, or successor system that is maintained by the Department of
Veterans Affairs' Veterans Benefits Administration, as a service-
disabled veteran.
Service-disabled veteran-owned small business (SDVOSB) concern
eligible under the SDVOSB Program means an SDVOSB concern that is
designated in the System for Award Management (SAM) as certified by the
Small Business Administration (SBA) in accordance with 13 CFR 128.300.
Service-disabled veteran-owned small business (SDVOSB) Program
means a program that authorizes contracting officers to limit
competition, including award on a sole-source basis, to SDVOSB concerns
eligible under the SDVOSB Program.
Servicing agency means the agency that will conduct an assisted
acquisition on behalf of the requesting agency.
Shipment means freight transported or to be transported.
Shop drawings means drawings submitted by the construction
contractor or a subcontractor at any tier or required under a
construction contract, showing in detail either or both of the
following:
(1) The proposed fabrication and assembly of structural elements.
(2) The installation (i.e., form, fit, and attachment details) of
materials or equipment.
Should means an expected course of action or policy that is to be
followed unless inappropriate for a particular circumstance.
Signature or signed means the discrete, verifiable symbol of an
individual that, when affixed to a writing with the knowledge and
consent of the individual, indicates a present intention to
authenticate the writing. This includes electronic symbols.
Simplified acquisition procedures means the simplified procedures
described in 12.201-1 and part 13 for procuring supplies or services.
Simplified acquisition threshold means $350,000, except for--
(1) Acquisitions of supplies or services that, as determined by the
head of the agency, are to be used to support a contingency operation;
to facilitate defense against or recovery from cyber, nuclear,
biological, chemical, or radiological attack; to support a request from
the Secretary of State or the Administrator of the United States
[[Page 37583]]
Agency for International Development to facilitate provision of
international disaster assistance pursuant to 22 U.S.C. 2292 et seq.;
or to support response to an emergency or major disaster (42 U.S.C.
5122), (41 U.S.C. 1903), the term means--
(i) $1 million for any contract to be awarded and performed, or
purchase to be made, inside the United States; and
(ii) $2 million for any contract to be awarded and performed, or
purchase to be made, outside the United States; and
(2) Acquisitions of supplies or services that, as determined by the
head of the agency, are to be used to support a humanitarian or
peacekeeping operation (10 U.S.C. 3015), the term means $650,000 for
any contract to be awarded and performed, or purchase to be made,
outside the United States.
Small business concern--
(1) Means a concern, including its affiliates, that is
independently owned and operated, not dominant in its field of
operation, and qualified as a small business under the criteria and
size standards in 13 CFR part 121 (see 19.103).
(2) Affiliates, as used in this definition, means business
concerns, one of whom directly or indirectly controls or has the power
to control the others, or a third party or parties control or have the
power to control the others. In determining whether affiliation exists,
consideration is given to all appropriate factors including common
ownership, common management, and contractual relationships. SBA
determines affiliation based on the factors set forth at 13 CFR
121.103.
Small business subcontractor means a concern that does not exceed
the size standard for the North American Industry Classification
Systems code that the prime contractor determines best describes the
product or service being acquired by the subcontract.
Small Business Teaming Arrangement--
(1) Means an arrangement where--
(i) Two or more small business concerns have formed a joint
venture; or
(ii) A small business offeror agrees with one or more other small
business concerns to have them act as its subcontractors under a
specified Government contract. A Small Business Teaming Arrangement
between the offeror and its small business subcontractor(s) exists
through a written agreement between the parties that--
(A) Is specifically referred to as a ``Small Business Teaming
Arrangement''; and
(B) Sets forth the different responsibilities, roles, and
percentages (or other allocations) of work as it relates to the
acquisition;
(2)(i) For civilian agencies, may include two business concerns in
a mentor-prot[eacute]g[eacute] relationship when both the mentor and
the prot[eacute]g[eacute] are small or the prot[eacute]g[eacute] is
small and the concerns have received an exception to affiliation
pursuant to 13 CFR 121.103(h)(3)(ii) or (iii).
(ii) For DoD, may include two business concerns in a mentor-
prot[eacute]g[eacute] relationship in the DoD Mentor-
Prot[eacute]g[eacute] Program (see 10 U.S.C. 4902) when both the mentor
and the prot[eacute]g[eacute] are small. There is no exception to joint
venture size affiliation for offers received from teaming arrangements
under the DoD Mentor-Prot[eacute]g[eacute] Program; and
(3) See 13 CFR 121.103(b)(9) regarding the exception to affiliation
for offers received from Small Business Teaming Arrangements in the
case of a solicitation of offers for a bundled contract with a reserve.
Small disadvantaged business concern, consistent with 13 CFR
124.1001, means a small business concern under the size standard
applicable to the acquisition, that
(1) Is at least 51 percent unconditionally and directly owned (as
defined at 13 CFR 124.105) by--
(i) One or more socially disadvantaged (as defined at 13 CFR
124.103) and economically disadvantaged (as defined at 13 CFR 124.104)
individuals who are citizens of the United States; and
(ii) Each individual claiming economic disadvantage has a net worth
not exceeding the threshold at 13 CFR 124.104(c)(2) after taking into
account the applicable exclusions set forth at 13 CFR 124.104(c)(2);
and
(2) The management and daily business operations of which are
controlled (as defined at 13 CFR 124.106) by individuals who meet the
criteria in paragraphs (1)(i) and (ii) of this definition.
Sole source acquisition means a contract for the purchase of
supplies or services that is entered into or proposed to be entered
into by an agency after soliciting and negotiating with only one
source.
Solicitation means any request to submit offers or quotations to
the Government. Solicitations under sealed bid procedures are called
``invitations for bids.'' Solicitations under negotiated procedures are
called ``requests for proposals.'' Solicitations under simplified
acquisition procedures may require submission of either a quotation or
an offer.
Solicitation provision or provision means a term or condition used
only in solicitations and applying only before contract award.
Source selection information means any of the following information
that is prepared for use by an agency for the purpose of evaluating a
bid or proposal to enter into an agency procurement contract, if that
information has not been previously made available to the public or
disclosed publicly:
(1) Bid prices submitted in response to an agency invitation for
bids, or lists of those bid prices before bid opening.
(2) Proposed costs or prices submitted in response to an agency
solicitation, or lists of those proposed costs or prices.
(3) Source selection plans.
(4) Technical evaluation plans.
(5) Technical evaluations of proposals.
(6) Cost or price evaluations of proposals.
(7) Competitive range determinations that identify proposals that
have a reasonable chance of being selected for award of a contract.
(8) Rankings of bids, proposals, or competitors.
(9) Reports and evaluations of source selection panels, boards, or
advisory councils.
(10) Other information marked as ``Source Selection Information--
See FAR 2.101 and 3.104'' based on a case-by-case determination by the
head of the agency or the contracting officer, that its disclosure
would jeopardize the integrity or successful completion of the Federal
agency procurement to which the information relates.
Special competency means a special or unique capability, including
qualitative aspects, developed incidental to the primary functions of
the Federally Funded Research and Development Centers to meet some
special need.
Special test equipment means either single or multipurpose
integrated test units engineered, designed, fabricated, or modified to
accomplish special purpose testing in performing a contract. It
consists of items or assemblies of equipment including foundations and
similar improvements necessary for installing special test equipment,
and standard or general purpose items or components that are
interconnected and interdependent so as to become a new functional
entity for special testing purposes. Special test equipment does not
include material, special tooling, real property, and equipment items
used for general testing purposes or property that with relatively
minor expense can be made suitable for general purpose use.
Special tooling means jigs, dies, fixtures, molds, patterns, taps,
gauges,
[[Page 37584]]
and all components of these items including foundations and similar
improvements necessary for installing special tooling, and which are of
such a specialized nature that without substantial modification or
alteration their use is limited to the development or production of
particular supplies or parts thereof or to the performance of
particular services. Special tooling does not include material, special
test equipment, real property, equipment, machine tools, or similar
capital items.
Statement of Objectives (SOO) means a Government-prepared document
incorporated into the solicitation that states the overall performance
objectives. It is used in solicitations when the Government intends to
provide the maximum flexibility to each offeror to propose an
innovative approach.
Subline item means a subset of a line item.
Substantial evidence means information sufficient to support the
reasonable belief that a particular act or omission has occurred.
Substantially as follows or substantially the same as, when used in
the prescription and introductory text of a provision or clause, means
that authorization is granted to prepare and utilize a variation of
that provision or clause to accommodate requirements that are peculiar
to an individual acquisition; provided that the variation includes the
salient features of the FAR provision or clause, and is not
inconsistent with the intent, principle, and substance of the FAR
provision or clause or related coverage of the subject matter.
Supplemental agreement means a contract modification that is
accomplished by the mutual action of the parties.
Supplies means all property except land or interest in land. It
includes (but is not limited to) public works, buildings, and
facilities; ships, floating equipment, and vessels of every character,
type, and description, together with parts and accessories; aircraft
and aircraft parts, accessories, and equipment; machine tools; and the
alteration or installation of any of the foregoing.
Surety means an individual or corporation legally liable for the
debt, default, or failure of a principal to satisfy a contractual
obligation. The types of sureties referred to are as follows:
(1) An individual surety is one person, as distinguished from a
business entity, who is liable for the entire penal amount of the bond.
(2) A corporate surety is licensed under various insurance laws
and, under its charter, has legal power to act as surety for others.
(3) A cosurety is one of two or more sureties that are jointly
liable for the penal sum of the bond. A limit of liability for each
surety may be stated.
Surplus property means excess personal property not required by any
Federal agency as determined by the Administrator of the General
Services Administration (GSA). (See 41 CFR 102-36.40).
Suspending and debarring official means--
(1) An agency head; or
(2) A designee authorized by the agency head to impose a suspension
and/or a debarment.
Suspension means action taken by a suspending and debarring
official under 9.407 to disqualify a contractor temporarily from
Government contracting and Government-approved subcontracting; a
contractor that is ``suspended'' is disqualified.
System for Award Management (SAM) means the primary Government
repository available at SAM.gov for prospective Federal awardee and
Federal awardee information and the centralized Government system for
certain contracting, grants, and other assistance-related processes. It
includes--
(1) Data collected from prospective Federal awardees required for
the conduct of business with the Government; and
(2) Identification of those parties excluded from receiving Federal
contracts, certain subcontracts, and certain types of Federal financial
and non-financial assistance and benefits.
Task order means an order for services placed against an
established contract or with Government sources.
Taxpayer Identification Number (TIN) means the number required by
the IRS to be used by the offeror in reporting income tax and other
returns. The TIN may be either a Social Security Number or an Employer
Identification Number.
Technical data means recorded information, regardless of the form
or method of the recording, of a scientific or technical nature
(including computer software documentation). The term does not include
computer software or financial, administrative, cost or pricing, or
management information, or incidental information to contract
administration.
Terminated portion of the contract means the portion of a contract
that the contractor is not to perform following a partial termination.
For construction contracts that have been completely terminated for
convenience, it means the entire contract, notwithstanding the
completion of, and payment for, individual items of work before
termination.
Termination for convenience means the exercise of the Government's
right to completely or partially terminate performance of work under a
contract when it is in the Government's interest.
Termination for default means the exercise of the Government's
right to completely or partially terminate a contract because of the
contractor's actual or anticipated failure to perform its contractual
obligations.
Termination inventory means any property purchased, supplied,
manufactured, furnished, or otherwise acquired for the performance of a
contract subsequently terminated and properly allocable to the
terminated portion of the contract. It includes Government-furnished
property. It does not include any facilities, material, special test
equipment, or special tooling that are subject to a separate contract
or to a special contract requirement governing their use or
disposition.
Unallowable cost means any cost that, under the provisions of any
pertinent law, regulation, or contract, cannot be included in prices,
cost-reimbursements, or settlements under a Government contract to
which it is allocable.
Unique and innovative concept, when used relative to an unsolicited
research proposal, means that--
(1) In the opinion and to the knowledge of the Government
evaluator, the meritorious proposal--
(i) Is the product of original thinking submitted confidentially by
one source;
(ii) Contains new, novel, or changed concepts, approaches, or
methods;
(iii) Was not submitted previously by another; and
(iv) Is not otherwise available within the Federal Government.
(2) In this context, the term does not mean that the source has the
sole capability of performing the research.
Unique entity identifier (UEI) means a number or other identifier
used to identify a specific commercial, nonprofit, or Government
entity. See www.sam.gov for the designated entity for establishing
unique entity identifiers.
United States, when used in a geographic sense, means the 50 States
and the District of Columbia, except as follows:
(1) For use in subpart 3.10, see the definition at 3.1001.
(2) [Reserved]
(3) For use in subpart 22.8, see the definition at 22.801.
[[Page 37585]]
(4) For use in subpart 22.9, see the definition at 22.901.
(5) For use in subpart 22.12, see the definition at 22.1201.
(6) For use in subpart 22.13, see the definition at 22.1302.
(7) For use in subpart 22.14, see the definition at 22.1401.
(8) [Reserved]
(9) [Reserved]
(10) For use in part 25, see the definition at 25.002.
(11) For use in part 27, see the definition at 27.001.
(12) For use in subpart 47.4, see the definition at 47.401.
Unsolicited proposal means a written proposal for a new or
innovative idea that is submitted to an agency on the initiative of the
offeror for the purpose of obtaining a contract with the Government,
and that is not in response to a request for proposals, Broad Agency
Announcement, Small Business Innovation Research topic, Small Business
Technology Transfer topic, Program Research and Development
Announcement, or any other Government-initiated solicitation or
program.
Veteran-owned small business concern means a small business
concern--
(1) Not less than 51 percent of which is owned and controlled by
one or more veterans (as defined at 38 U.S.C. 101(2)) or, in the case
of any publicly owned business, not less than 51 percent of the stock
of which is owned by one or more veterans; and
(2) The management and daily business operations of which are
controlled by one or more veterans.
Voluntary consensus standards means common and repeated use of
rules, conditions, guidelines or characteristics for products, or
related processes and production methods and related management
systems. Voluntary Consensus Standards are developed or adopted by
domestic and international voluntary consensus standard making bodies
(e.g., International Organization for Standardization (ISO) and ASTM-
International). See OMB Circular A-119.
Warranty means a promise or affirmation given by a contractor to
the Government regarding the nature, usefulness, or condition of the
supplies or performance of services furnished under the contract.
Women-owned small business concern means--
(1) A small business concern--
(i) That is at least 51 percent owned by one or more women; or, in
the case of any publicly owned business, at least 51 percent of the
stock of which is owned by one or more women; and
(ii) Whose management and daily business operations are controlled
by one or more women; or
(2) A small business concern eligible under the Women-Owned Small
Business Program in accordance with 13 CFR part 127 (see 19.107).
Women-Owned Small Business (WOSB) Program. (1) Women-Owned Small
Business (WOSB) Program means a program that authorizes contracting
officers to limit competition, including award on a sole-source basis,
to--
(i) Economically disadvantaged women-owned small business (EDWOSB)
concerns eligible under the WOSB Program for Federal contracts assigned
a North American Industry Classification Systems (NAICS) code in an
industry in which the Small Business Administration (SBA) has
determined that WOSB concerns are underrepresented in Federal
procurement; and
(ii) WOSB concerns eligible under the WOSB Program for Federal
contracts assigned a NAICS code in an industry in which SBA has
determined that WOSB concerns are substantially underrepresented in
Federal procurement.
(2) Economically disadvantaged women-owned small business (EDWOSB)
concern means a small business concern that is at least 51 percent
directly and unconditionally owned by, and the management and daily
business operations of which are controlled by, one or more women who
are citizens of the United States and who are economically
disadvantaged in accordance with 13 CFR part 127, and the concern is
certified by SBA or an approved third-party certifier in accordance
with 13 CFR 127.300. It automatically qualifies as a women-owned small
business (WOSB) concern eligible under the WOSB Program.
(3) Women-owned small business (WOSB) concern eligible under the
WOSB Program means a small business concern that is at least 51 percent
directly and unconditionally owned by, and the management and daily
business operations of which are controlled by, one or more women who
are citizens of the United States, and the concern is certified by SBA
or an approved third-party certifier in accordance with 13 CFR 127.300.
Writing or written (see ``in writing'').
2.102 Acronyms and abbreviations.
A list of acronyms, and abbreviations used in the FAR is available
at https://www.acquisition.gov/far-acronyms.
2.103 Contract clause.
Insert the clause at 52.202-1, Definitions, in solicitations and
contracts including those for commercial products and commercial
services, if the acquisition value exceeds the simplified acquisition
threshold.
PART 4--ADMINISTRATIVE AND INFORMATION MATTERS
Sec.
4.000 Scope of part.
4.001 Definitions.
4.002 Electronic commerce in contracting.
Subpart 4.1--Presolicitation
4.101 Contract files.
Subpart 4.2--Solicitation, Evaluation, and Award
4.201 Unique procurement instrument identifiers.
4.202 Uniform use of line items.
4.202-1 Policy.
4.202-2 Establishing line items.
4.202-3 Establishing subline items.
4.202-4 Required data elements for line items and subline items.
4.202-5 Exceptions to required data elements.
4.203 System for Award Management.
4.203-1 Policy.
4.203-2 Procedures.
4.204 Taxpayer identification information.
4.205 Personal identity verification.
4.206 Contracting officer's signature.
4.207 Contractor's signature.
4.208 Solicitation provisions and contract clauses.
Subpart 4.3--Postaward
4.301 Contract distribution.
4.302 Contract reporting.
4.303 Personal identity verification.
4.304 Service contracts inventory.
4.305 System for Award Management.
4.306 Contractor identification.
4.307 Executive compensation.
4.308 Payment office.
4.309 Contract closeout.
4.309-1 Procedures for closing out contract files.
4.309-2 Contract closeout by the office administering the contract.
4.310 Storage, handling, and contract files.
Subpart 4.4--Contractor Records Retention
4.400 Scope of subpart.
4.401 Purpose.
4.402 Applicability.
4.403 Policy.
4.404 Calculating retention periods.
4.405 Specific retention periods.
Authority: 41 U.S.C. 1121(b); 40 U.S.C. 121(c); 10 U.S.C.
chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C.
3016); and 51 U.S.C. 20113.
4.000 Scope of part.
This part prescribes policies and procedures relating to the
administrative aspects of contract execution, contractor-submitted
[[Page 37586]]
documents, reporting, retention, and files.
4.001 Definitions.
As used in this part--
Activity Address Code means a distinct six-position code consisting
of a combination of alpha and/or numeric characters assigned to
identify specific agency offices, units, activities, or organizations
by GSA for civilian agencies and by DoD for defense agencies.
Executive means officers, managing partners, or any other employees
in management positions.
First-tier subcontract means a subcontract awarded directly by the
contractor to acquire supplies or services (including construction),
other than for commercial products or commercial services, for
performing a prime contract. It does not include the contractor's
supplier agreements with vendors, such as long-term arrangements for
materials or supplies that benefit multiple contracts and/or the costs
of which are normally applied to a contractor's general and
administrative expenses or indirect costs.
Generic entity identifier means an identifier assigned to a
category of vendors, not specific to any individual or entity.
4.002 Electronic commerce in contracting.
Agencies must use electronic commerce to the maximum extent that is
practicable and cost-effective, see 41 U.S.C. 2301.
Subpart 4.1--Presolicitation
4.101 Contract files.
(a) Each office performing contracting, contract administration, or
paying functions must establish a file containing the records of each
solicitation and contractual action.
(b) The file documentation must comprehensively record the
transaction history to ensure--
(1) A complete background is available for making informed
decisions at each step in the acquisition process;
(2) There is clear support for all actions taken;
(3) Necessary information is accessible for reviews and
investigations; and
(4) Essential facts are available in case litigation or
congressional inquiries arise.
Subpart 4.2--Solicitation, Evaluation, and Award
4.201 Unique procurement instrument identifiers.
(a) Agencies must use a procurement instrument identifier (PIID)
unique Governmentwide to identify each solicitation, contract,
agreement, or order. The PIID must be used in all related procurement
actions including forms and electronic generated formats.
(b) The PIID consists of a combination of thirteen to seventeen
alpha and/or numeric characters sequenced to convey certain
information. Do not use special characters (such as hyphens, dashes, or
spaces).
(1) Positions 1 through 6. Use the issuing office Activity Address
Code to identify the department/agency and office issuing the
instrument.
(2) Positions 7 through 8. Use the last two digits of the fiscal
year in which the procurement instrument is issued or awarded (i.e.,
signed).
(3) Position 9. Use one of the upper-case letters according to
Table 4-1. Departments and independent agencies may assign those
letters identified for department use in Table 4-1 according to agency
policy; however, any use must be applied to the entire department or
agency.
Table 4-1--PIID Instrument Designation
------------------------------------------------------------------------
Instrument Letter designation
------------------------------------------------------------------------
(i) Blanket purchase agreements......... A
(ii) Invitations for bids............... B
(iii) Contracts of all types except C
indefinite-delivery contracts.
(iv) Indefinite-delivery contracts D
(including Federal Supply Schedules,
Governmentwide acquisition contracts
(GWACs), and multi-agency contracts).
(v) Reserved for future Federal E
Governmentwide use.
(vi) Task orders, delivery orders or F
calls under--
Indefinite-delivery ..............................
contracts (including Federal Supply
Schedules, GWACs, and multi-agency
contracts);
Blanket purchase ..............................
agreements; or
Basic ordering agreements. ..............................
(vii) Basic ordering agreements......... G
(viii) Agreements, including basic H
agreements and loan agreements, but
excluding blanket purchase agreements,
basic ordering agreements, and leases.
Do not use this code for contracts or
agreements with provisions for orders
or calls.
(ix) Do not use this letter............. I
(x) Reserved for future Federal J
Governmentwide use.
(xi) Reserved for departmental or agency K
use.
(xii) Lease agreements.................. L
(xiii) Reserved for departmental or M
agency use.
(xiv) Reserved for departmental or N
agency use.
(xv) Do not use this letter............. O
(xvi) Purchase orders (assign V if P
numbering capacity of P is exhausted
during a fiscal year).
(xvii) Requests for quotations (assign U Q
if numbering capacity of Q is exhausted
during a fiscal year).
(xviii) Requests for proposals.......... R
(xix) Reserved for departmental or S
agency use.
(xx) Reserved for departmental or agency T
use.
(xxi) See Q, requests for quotations.... U
(xxii) See P, purchase orders........... V
(xxiii) Reserved for future Federal W
Governmentwide use.
(xxiv) Reserved for future Federal X
Governmentwide use.
(xxv) Imprest fund...................... Y
(xxvi) Reserved for future Federal Z
Governmentwide use.
------------------------------------------------------------------------
(4) Positions 10 through 17. Use the number assigned by the issuing
agency in these positions. Agencies may choose between four and eight
characters to be used, but the same number of characters must be used
agencywide. Do not use leading or trailing zeroes to equal the maximum
in any system or data transmission. A separate series of numbers may be
used for any type of instrument listed in paragraph (b)(3) of this
section. An agency may reserve blocks of numbers or alpha-numeric
numbers for its various components to use.
(c) Agencies must use a non-unique identifier for a procurement
action (i.e., supplementary PIID) that is used with the PIID. The
supplementary PIID is
[[Page 37587]]
used to identify amendments to solicitations and modifications to
contracts, orders, and agreements. The supplementary PIID is reported
as a separate data element used with, but not appended to, the PIID.
(1) Amendments to solicitations. Use a four-position numeric serial
number in addition to the 13-17-character PIID beginning with 0001.
(2) Modifications to contracts, orders, and agreements. Use a six-
position alpha, numeric, or a combination of both, in addition to the
13-17-character PIID. For example, a modification could be numbered
P00001.
(i) Position 1. Use the letter P if the modification is issued by
the procuring contracting office. Use the letter A if the modification
is issued by the contract administration office (if other than the
procuring contracting office).
(ii) Positions 2 through 6. These positions may be alpha, numeric,
or a combination of both, according to agency procedures.
(iii) Each office authorized to issue modifications must assign the
supplementary identification numbers in sequence (unless provided
otherwise in agency procedures). Do not assign the numbers until the
contracting officer determines that a modification is to be issued.
(d)(1) Agencies must not change the PIID unless one of the
following circumstances applies:
(i) The PIID serial numbering system is exhausted.
(ii) Continued use of a PIID is administratively burdensome (e.g.,
for implementing new agency contract writing systems).
(iii) The contract is transferred between contracting departments.
(2) If one of the circumstances described at 4.201(d)(1) applies,
the contracting officer may assign a new PIID by issuing an
administrative contract modification. The modification must identify
both the original and the newly assigned PIID.
4.202 Uniform use of line items.
4.202-1 Policy.
(a) Procurement instruments must identify the supplies or services
to be acquired as separately identified line items and, as needed,
subline items.
(b) Line items--
(1) Are established to define deliverables or organize information
about deliverables;
(2) Describe characteristics for the item purchased, e.g., pricing,
delivery, and funding information; and
(3) May be subdivided into separate unique subsets (called subline
items) to ease administration. Subline items are established to define
deliverables (deliverable subline items) or organize information about
deliverables (informational subline items). If a line item has
deliverable subline items, the line item itself is informational.
4.202-2 Establishing line items.
Establish separate line items for deliverables that have the
following characteristics except as provided at 4.202-5:
(a) Separately identifiable.
(1) A supply is separately identifiable if it has its own
identification (e.g., national stock number, item description,
manufacturer's part number).
(2) Services are separately identifiable if they have no more than
one statement of work or performance work statement.
(3) If the procurement instrument involves a first article (see
part 9), establish a separate line item for each item requiring a
separate approval. If the first article consists of a lot composed of a
mixture of items that will be approved as a single lot, a single line
item may be used.
(b) Single unit price or total price.
(c) Single accounting classification citation. A single deliverable
may be funded by multiple accounting classifications when the
deliverable effort cannot be otherwise subdivided.
(d) Separate delivery schedule, destination, period of performance,
or place of performance.
(e) Single contract pricing type (e.g., fixed-price or cost-
reimbursement).
4.202-3 Establishing subline items.
Subline items may be used to facilitate tracking of performance,
deliverables, payment, and contract funds accounting or for other
management purposes. The list of characteristics at 4.202-2 applies to
deliverable subline items, but it is not applicable to informational
subline items. A line item with subline items must contain only that
information that is common to all subline items thereunder. All subline
items under one line item must be the same contract type as the line
item.
(a) Deliverable subline items. Deliverable subline items may be
used for several related items that require separate identification.
For example, instead of establishing multiple separate line items,
subline items may be established for--
(1) Items that are basically the same, except for minor variations
such as--
(i) Size or color;
(ii) Accounting classification, but see also 4.202-4(a)(4); or
(iii) Date of delivery, destination, or period or place of
performance;
(2) Separately priced collateral functions that relate to the
primary product, such as packaging and handling, or transportation; or
(3) Items to be separately identified at the time of shipment or
performance.
(b) Informational subline items. (1) Informational subline items
may be used by agencies for administrative purposes. This type of
subline item identifies information that relates directly to the line
item and is an integral part of it (e.g., parts of an assembly or parts
of a kit).
(2) Position informational subline items within the line item
description, not in the quantity or price fields.
4.202-4 Required data elements for line items and subline items.
(a) Except as provided in 4.202-5, each line item or subline item
must include in the schedule (or in a comparable section of the
procurement instrument), at a minimum, the following information as
separate, distinct data elements:
(1) Line item or subline item number established in accordance with
agency procedures.
(2) Description of what is being purchased.
(3) Product and Service Code (PSC).
(4) Accounting classification citation.
(i) Line items or deliverable subline items. If multiple accounting
classifications for a single deliverable apply, include the dollar
amount for each accounting classification in the schedule (or a
comparable section of the procurement instrument).
(ii) Informational subline items. An accounting classification
citation is not required. (See 4.202-3).
(5)(i) For fixed-price line items:
(A) Unit of measure.
(B) Quantity.
(C) Unit price.
(D) Total price.
(ii) For cost-reimbursement line items:
(A) Unit of measure.
(B) Quantity.
(C) Estimated cost.
(D) Fee (if any).
(E) Total estimated cost plus any fee.
(b) If a contract contains a combination of fixed-price, time-and-
materials, labor-hour, or cost- reimbursement line items, identify the
contract type for each line item in the schedule (or a comparable
section of the procurement instrument) to facilitate payment.
(c) Each deliverable line item or deliverable subline item must
have its own delivery schedule, destination, period of performance, or
place of performance expressly stated in the appropriate section of the
procurement
[[Page 37588]]
instrument (``as required'' constitutes an expressly stated delivery
term). When a line item has deliverable subline items, identify the
delivery schedule, destination, period of performance, or place of
performance at the subline item level, rather than the line item level.
(d) Terms and conditions in other sections of the contract (such as
contract clauses or payment instructions) must also specify
applicability to individual line items if not applicable to the
contract as a whole.
4.202-5 Exceptions to required data elements.
(a) Indefinite-delivery contracts--(1) General. The following
required data elements are not known at time of issuance of an
indefinite-delivery contract; however, each order must provide them at
issuance: accounting classification, delivery date and destination, or
period and place of performance.
(2) Indefinite-delivery indefinite-quantity (IDIQ) and requirements
contracts. (i) IDIQ and requirements contracts may omit the quantity at
the line item level for the base award provided that the total contract
minimum and maximum, or the estimate, respectively, is stated.
(ii) Multiple-award IDIQ contracts awarded using the procedures at
parts 13 or 15 may omit price or cost at the line item or subline item
level for the contract award, provided that the total contract minimum
and maximum is stated (see part 16).
(b) Item description and PSC. These data elements are not required
in the line item if there are associated deliverable subline items that
include the actual detailed identification. When this exception
applies, use a general narrative description for the line item.
(c) Single unit price or single total price. The requirement for a
single unit price or single total price at the line item level does not
apply if any of the following conditions are present:
(1) There are associated deliverable subline items that are priced.
(2) The line item or subline item is not separately priced.
(3) The supplies or services are being acquired on a cost-
reimbursement, time-and-materials, or labor-hour basis.
(4) The procurement instrument is for services and firm prices have
been established for elements of the total price, but the actual number
of the elements is not known until performance. The contracting officer
may structure these procurement instruments to reflect a firm or
estimated total amount for each line item.
4.203 System for Award Management.
4.203-1 Policy.
(a) The System for Award Management (SAM) at https://www.sam.gov is
the primary method used to collect the following information from
entities interested in obtaining Federal Government contracts:
(1) Identifying information about the entity, to issue the unique
entity identifier (UEI) and Commercial and Government Entity (CAGE)
code;
(2) Entity-level representations and certifications (see 52.204-
7(c)(1)); and
(3) Information necessary to receive payment under a contract,
collect debts, or for Government reporting purposes, such as taxpayer
information required by 31 U.S.C. 7701(c) and 3325(d); 26 U.S.C. 6041,
6041A, and 6050M; and implementing regulations issued by the Internal
Revenue Service (IRS).
(b) Offerors or quoters are required to have an active Federal
Government contracts registration in SAM when they submit an offer or
quotation, and at the time of award, except for--
(1) Micro-purchases that use a Governmentwide commercial purchase
card as the method of purchase and payment;
(2) Micro-purchases that do not use the electronic funds transfer
(EFT) method for payment and are not required to be reported in SAM
Contract Awards;
(3) Classified contracts when registration in SAM could compromise
the safeguarding of classified information or national security;
(4) Contracts awarded without providing full and open competition
due to unusual or compelling urgency;
(5) Contracts awarded by--
(i) Deployed contracting officers supporting military operations
including, but not limited to, contingency operations as defined in 10
U.S.C. 101(a)(13) or humanitarian or peacekeeping operations as defined
in 10 U.S.C. 3015(2);
(ii) Contracting officers located outside the United States and its
outlying areas supporting diplomatic or developmental operations; or
(iii) Contracting officers supporting emergency operations, such as
responses to natural or environmental disasters, or national or civil
emergencies;
(6) Contracts with individuals for performance outside the United
States and its outlying areas; and
(7) Contract actions at or below $40,000 awarded to foreign vendors
for work performed outside the United States, if it is impractical to
obtain SAM registration.
(c) For contracts described under paragraph (b)(4) of this section,
the contractor must register in SAM within 30 days after contract award
or at least three days before submitting the first invoice, whichever
occurs first.
(d) For contracts or agreements described under paragraph (b)(5) of
this section, if practical, the contracting officer must modify the
contract to require SAM registration.
(e) When SAM registration is not required, the contracting officer
must collect certain offeror identifying information and entity-level
representations and certifications at the time of receipt of an offer
or quotation (see 4.203-2(a)(2)).
(f) Agencies must protect against improper disclosure of nonpublic
information contained in SAM.
4.203-2 Procedures.
(a) At the time an offer or quotation is submitted--
(1) Use the offeror or quoter's UEI to verify that the entity has
an active Federal Government contracts registration in SAM, and
document the date of SAM verification in the contract file; or
(2) If a solicitation does not require registration in SAM--
(i) Review the information provided in response to the provision at
52.204-XX, Offeror Identification, and validate the CAGE code using the
CAGE code search feature at https://cage.dla.mil; and
(ii) Verify the offeror has included in its offer the entity-level
representations and certifications required by each provision in
52.204-7(c)(1) that is included in the solicitation.
(b) Use the legal business name or ``doing business as'' name and
physical address in SAM for the successful offeror's UEI to identify
the contractor in the award document and all corresponding forms and
data exchanges. Do not change data retrieved from SAM.
4.204 Taxpayer identification information.
(a) Agencies must collect the taxpayer identification number (TIN)
to comply with the following statutory requirements--
(1) Debt collection. 31 U.S.C. 7701(c) requires each contractor
doing business with a Government agency to furnish its TIN to that
agency. 31 U.S.C. 3325(d) requires the Government to include the TIN of
the contractor receiving payment with each certified voucher. The
Government may use the TIN to collect and report on any delinquent
amounts arising out of the contractor's relationship with the
Government.
[[Page 37589]]
(2) Information reporting to the IRS. The TIN is required for
Government reporting of certain contract information and payment
information to the IRS. 26 U.S.C. 6109 requires a contractor to provide
its TIN if a Form 1099 is required. The payment office is responsible
for submitting reports to the IRS.
(b) Contracting officers will obtain the TIN from--
(1) SAM if offerors are required to be registered in SAM, see
4.203-2(a)(1) and 52.204-7; or
(2) Offers if offerors are not required to be registered in SAM,
see 4.203-2(a)(2) and 52.204-XX.
4.205 Personal identity verification.
(a) Agencies must include their implementation of Homeland Security
Presidential Directive-12 and the Federal Information Processing
Standards Publication (FIPS PUB) Number 201 in solicitations and
contracts that require the contractor to have routine physical access
to a Federally-controlled facility and/or routine access to a Federal
information system. For information on personal identity verification
(PIV) products and services see http://www.idmanagement.gov.
(b) When acquiring PIV products and services not using the GSA
Federal Supply Schedule for HSPD-12 Product and Service Components,
agencies must ensure that the applicable products and services are
approved as compliant with FIPS PUB 201 including--
(1) Certifying the products and services procured meet all
applicable Federal standards and requirements;
(2) Ensuring interoperability and conformance to applicable Federal
standards for the lifecycle of the components; and
(3) Maintaining a written plan for ensuring ongoing conformance to
applicable Federal standards for the lifecycle of the components.
4.206 Contracting officer's signature.
Only contracting officers can sign contracts on behalf of the
United States. The contracting officer's name and official title must
be typed, stamped, or printed on the contract. The contracting officer
normally signs the contract after the contractor has signed it. A
digital signature using a certificate from the PIV or Common Access
Card (CAC) assigned to the contracting officer is considered acceptable
as a written signature.
4.207 Contractor's signature.
(a) Individuals. A contract with an individual must be signed by
that individual. A contract with an individual doing business as a firm
must be signed by that individual, and the signature must be followed
by the individual's typed, stamped, or printed name and the words ``,
an individual doing business as ____'' [insert name of firm].
(b) Partnerships. A contract with a partnership must be signed in
the partnership name. Before signing for the Government, the
contracting officer must obtain a list of all partners and ensure that
the individual(s) signing for the partnership have authority to bind
the partnership.
(c) Corporations. A contract with a corporation must be signed in
the corporate name, followed by the word ``by'' and the signature and
title of the person authorized to sign. The contracting officer must
ensure that the person signing for the corporation has authority to
bind the corporation.
(d) Joint venturers. A contract with joint venturers may involve
any combination of individuals, partnerships, or corporations. The
contract must be signed by each participant in the joint venture in the
manner prescribed in paragraphs (a) through (c) of this section for
each type of participant. When a corporation is participating, the
contracting officer must verify that the corporation is authorized to
participate in the joint venture.
(e) Agents. When an agent is to sign the contract, other than as
stated in paragraphs (a) through (d) of this section, the agent's
authorization to bind the principal must be established by evidence
that satisfies the contracting officer.
(f) Digital signatures. Contractor's digital signatures are
acceptable as a written signature when using authentication and/or
signature certificates from a PIV or CAC obtained from a credentialed
organization.
4.208 Solicitation provisions and contract clauses.
(a) Insert the provision at 52.204-5, Women-Owned Business (Other
Than Small Business), in solicitations, including those for commercial
products and commercial services, that--
(1) Are not set aside for small business concerns;
(2) Exceed the simplified acquisition threshold (SAT); and
(3) Are for contracts that will be performed in the United States
or its outlying areas.
(b) When offerors are required to be registered in SAM, insert--
(1) The provision at 52.204-7, System for Award Management--
Registration, in solicitations, including those for commercial products
and commercial services.
(i) Do not separately include the provisions listed in paragraph
(c)(1) of the provision at 52.204-7.
(ii) Use the provision with its Alternate I for acquisitions
described at 4.203-1(b)(4); and
(2) The clause at 52.204-13, System for Award Management--
Maintenance, in solicitations and contracts, including those for
commercial products and commercial services. Use the clause with its
Alternate I for acquisitions described at 4.203-1(b)(4).
(c) When offerors are not required to be registered in SAM,
insert--
(1) In solicitations, including those for commercial products and
commercial services--
(i) The provision at 52.204-XX, Offeror Identification; and
(ii) Each provision listed in paragraph (c)(1) of the provision at
52.204-7, if applicable based on each provision prescription; and
(2) In solicitations and contracts, including those for commercial
products and commercial services, the clause at 52.204-YY, Contractor
Identification.
(d) Insert the clause at 52.204-9, Personal Identity Verification
of Contractor Personnel, in solicitations and contracts, including
those for commercial products (other than commercially available off-
the-shelf items) or commercial services, when contract performance
requires contractors to have routine physical access to a Federally-
controlled facility and/or routine access to a Federal information
system.
(e) Insert the clause at 52.204-10, Reporting Executive
Compensation and First-Tier Subcontract Awards, in solicitations and
contracts, other than those for commercial products or commercial
services, if the acquisition value exceeds $40,000 and the award is
required to be reported in SAM Contract Awards Management.
(f)(1) The clauses in paragraphs (f)(2) and (3) of this section
provide requirements for obtaining information from agency service
contractors. The clauses are not required for--
(i) Actions entirely funded by DoD;
(ii) Contracts for commercial services; or
(iii) Classified solicitations, contracts, or orders.
(2) Insert the clause at 52.204-14, Service Contract Reporting
Requirements, in solicitations and contracts for services other than
[[Page 37590]]
commercial services if the acquisition value is at or more than the
thresholds at 4.304(b), excluding indefinite-delivery contracts.
(3) Insert the clause at 52.204-15, Service Contract Reporting
Requirements for Indefinite-Delivery Contracts, in solicitations and
indefinite-delivery contracts for services, excluding commercial
services, if one or more orders are expected to be at or more than the
thresholds at 4.304(b).
(g) Insert the clause at 52.204-19, Incorporation by Reference of
Representations and Certifications, in all solicitations and contracts,
including those for commercial products and commercial services.
Subpart 4.3--Postaward
4.301 Contract distribution.
Distribute executed contracts or modifications within 10 working
days to the contractor, and to appropriate parties (e.g., payment
office--and see 4.308) according to agency regulations.
4.302 Contract reporting.
(a) As required by 41 U.S.C. 1122 and 1712, SAM Contract Awards
Management provides a comprehensive web-based tool for agencies to
report contract actions.
(1) At a minimum, agencies must report--
(i) The following contract actions exceeding the micro-purchase
threshold, regardless of solicitation process used:
(A) Definitive contracts, including purchase orders and imprest
fund buys awarded by a contracting officer.
(B) Indefinite delivery vehicle (identified as an ``IDV'' in SAM
Contract Awards Management) and all calls and orders awarded under it;
and
(ii) Any modification to the contract actions in paragraph
(a)(1)(i) that change previously reported contract action data,
regardless of dollar value.
(2) Agencies may submit actions other than those listed at
paragraph (a)(1) of this section if approved in writing by OFPP.
(3) Agencies will not report the following types of contract
actions:
(i) Imprest fund transactions below the micro-purchase threshold,
including those made via the Government purchase card (unless specific
agency procedures prescribe reporting these actions).
(ii) Orders from the GSA stock and the GSA Global Supply Program.
(iii) Purchases made at GSA or AbilityOne service stores, as these
items stocked for resale have already been reported by GSA.
(iv) Purchases made using non-appropriated fund activity cards,
chaplain fund cards, individual Government personnel training orders,
and Defense Printing orders.
(v) Actions that, according to other authority, will not be entered
into SAM Contract Awards Management (e.g., reporting of the information
would compromise national security).
(vi) Contract actions in which the required data would constitute
classified information.
(vii) Resale activity (i.e., commissary or exchange activity).
(viii) Revenue generating arrangements (i.e., concessions).
(ix) Training expenditures not issued as orders or contracts.
(x) Interagency agreements other than interagency acquisitions
required to be reported.
(xi) Letters of obligation used in the A-76 process.
(b) Agencies awarding assisted acquisitions or direct acquisitions
must report these actions and identify the Program/Funding Agency and
Office Codes from the applicable agency codes maintained by each agency
in SAM. These codes represent the agency and office that has provided
the predominant amount of funding for the contract action. For assisted
acquisitions, the requesting agency will receive socioeconomic credit
for meeting agency small business goals, where applicable. Requesting
agencies must provide the appropriate agency/bureau component code as
part of the written interagency agreement between the requesting and
servicing agencies (see part 17).
(c) Agencies awarding contract actions with a mix of appropriated
and non-appropriated funding must only report the full appropriated
portion of the contract action in SAM Contract Awards Management.
(d) Agencies may consolidate, at least monthly, multiple action
reports for a vendor when it would be overly burdensome to report each
action individually.
(e)(1) Agencies may use a generic entity identifier, rather than an
entity's assigned UEI, for--
(i) Contract actions valued at or below $40,000 that are awarded to
a contractor that is--
(A) A student;
(B) A dependent of either a veteran, foreign Service officer, or
military member assigned outside the United States and its outlying
areas; or
(C) Located outside the United States and its outlying areas for
work to be performed outside the United States and its outlying areas
and the contractor does not otherwise have a UEI;
(ii) Contracts valued above $40,000 awarded to individuals located
outside the United States and its outlying areas for work to be
performed outside the United States and its outlying areas; or
(iii) Contracts when specific public identification of the
contracted party could endanger the mission, contractor, or recipients
of the acquired goods or services. The contracting officer must include
a written determination in the contract file of a decision applicable
to authority under this paragraph (e)(1)(iii).
(2) The Integrated Award Environment program office will maintain
the list of generic entity identifiers that agencies may use.
(f)(1) The Senior Procurement Executive in coordination with the
head of the contracting activity is responsible for developing and
monitoring a process to ensure timely and accurate reporting of
contractual actions to SAM Contract Awards Management.
(2)(i) The contracting officer awarding the contract action is
responsible for accurately completing the individual contract action
report (CAR). Unpublished CARs in SAM Contract Awards Management are
not considered complete.
(ii) Complete the CAR in SAM Contract Awards Management within
three business days after contract award.
(iii) Complete the CAR for any action awarded without providing
full and open competition due to unusual or compelling urgency or
according to any of the emergency acquisition flexibilities within 30
days after contract award.
(3) The chief acquisition officer of each agency required to report
its contract actions must submit to OFPP within 120 days after the end
of each fiscal year, an annual certification of whether, and to what
degree, agency CAR data for the preceding fiscal year is complete and
accurate.
4.303 Personal identity verification.
Agency procedures for the return of PIV products must ensure that
Government contractors account for all forms of Government-provided
identification issued to Government contractor employees under a
contract, i.e., the PIV cards or other similar badges, and must ensure
that contractors return such identification to the issuing agency as
soon as any of the following occurs, unless otherwise determined by the
agency:
(a) When no longer needed for contract performance.
[[Page 37591]]
(b) Upon completion of a contractor employee's employment.
(c) Upon contract completion or termination.
4.304 Service contracts inventory.
(a) Requirement. As required by section 743(a) of Division C of the
Consolidated Appropriations Act, 2010 (31 U.S.C. 501 note) (Pub. L.
111-117), agencies covered by the Federal Activities Inventory Reform
Act (Pub. L. 105-270), except DoD, must submit annually to OMB an
inventory of activities performed by service contractors. The
information reported in the inventory will be publicly accessible.
(b) Contractor reporting requirements thresholds.
(1) Service contractor reporting is required for contracts and
first-tier subcontracts for services, excluding commercial services,
based on type of contract and estimated total value. For indefinite-
delivery contracts, the contracting officer must determine the
reporting requirements based on the type and estimated total value of
each order under the contract.
(2) Reporting is required according to the following thresholds:
(i) Cost-reimbursement, time-and-materials, and labor-hour service
contracts and orders with an estimated total value exceeding the SAT.
(ii) Fixed-price service contracts awarded and orders with an
estimated total value of $500,000 or more.
(c) Agency reporting responsibilities.
(1) Agencies must compile annually an inventory of service
contracts performed for, or on behalf of, the agency during the
previous fiscal year to determine the extent of the agency's reliance
on service contractors.
(2) Agencies must review contractor-reported information for
reasonableness and consistency with available contract information.
Authorized agency officials may review the reports at https://www.sam.gov. The agency is not required to address data for which the
agency would not normally have supporting information. If revisions to
the contractor-reported information are warranted, the agency must
notify the contractor. The contractor must revise the report, or
document its rationale for the agency. The contractor-provided
information is meant to supplement agency annual service contract
reporting. Agencies must post the inventory on its website and publish
a Federal Register Notice of Availability.
4.305 System for Award Management.
(a) Contractors must maintain throughout the life of the contract
through final payment--
(1) Their registration, if they are required to be registered in
SAM; or
(2) Their identifying information, if they are not required to be
registered in SAM.
(b) Contracting officers must validate the contractor has an active
Federal Government contracts registration in SAM, if they are required
to be registered in SAM, at the following times:
(1) For contracts described at 4.203-1(b)(4), within 30 days after
contract award, or at least three days before submitting the first
invoice, whichever occurs first.
(2) Before exercising any options on a contract.
(3) For novation and change-of-name agreements, see paragraph (c)
of the clause at 52.204-13.
(4) For assignees for the purpose of assignment of claims, see
paragraph (d) of the clause at 52.204-13.
4.306 Contractor identification.
(a) Contractors are required to maintain their UEI and CAGE code
throughout the life of the contract.
(b) Contractors must communicate any change to their UEI or CAGE
code to the contracting officer within 30 days after the change, so the
contracting officer can issue a modification to update the UEI or CAGE
code on the contract. A change in the UEI does not necessarily require
a novation.
4.307 Executive compensation.
(a) Contractors subject to the clause at 52.204-10, Reporting
Executive Compensation and First-Tier Subcontract Awards, must report
certain data required by section 2 of the Federal Funding
Accountability and Transparency Act of 2006 (Pub. L. 109-282), as
amended by section 6202 of the Government Funding Transparency Act of
2008 (Pub. L. 110-252).
(b) Certain data reported in SAM Contract Awards Management will
prepopulate certain fields in SAM to help contractors complete and
submit their reports required by 52.204-10. If the SAM Contract Awards
Management data is inaccurate, the contracting officer will correct the
data.
4.308 Payment office.
Provide the payment office information required to make proper
payments under a contract, at least the TIN, type of organization, the
UEI, and, if applicable, the EFT indicator.
4.309 Contract closeout.
4.309-1 Procedures for closing out contract files.
(a) The administrative closeout procedures must ensure that--
(1) Disposition of classified material is completed;
(2) Final patent report is cleared. If a final patent report is
required, the contracting officer may proceed with contract closeout
according to the following procedures, or as otherwise prescribed by
agency procedures:
(i) Final patent reports should be cleared within 60 days of
receipt.
(ii) If the final patent report is not received, the contracting
officer must notify the contractor of the contractor's obligations and
the Government's rights under the applicable patent rights clause,
according to part 27. If the contractor fails to respond to this
notification, the contracting officer may proceed with contract
closeout upon consultation with the agency legal counsel responsible
for patent matters regarding the contractor's failure to respond.
(3) Final royalty report is cleared;
(4) There is no outstanding value engineering change proposal;
(5) Plant clearance report is received;
(6) Property clearance is received;
(7) All interim or disallowed costs are settled;
(8) Price revision is completed;
(9) The prime contractor settles its subcontracts;
(10) Prior year indirect cost rates are settled;
(11) Termination docket is completed;
(12) Contract audit is completed;
(13) Contractor's closing statement is completed;
(14) Contractor's final invoice has been submitted; and
(15) Contract funds review is completed and excess funds
deobligated.
(b) When the actions in paragraph (a) of this section have been
verified, the contracting officer administering the contract must
prepare a contract completion statement containing the following
information:
(1) Contract administration office name and address (if different
from the contracting office).
(2) Contracting office name and address.
(3) Contract number.
(4) Last modification number.
(5) Last call or order number.
(6) Contractor name and address.
(7) Dollar amount of excess funds, if any.
(8) Voucher number and date, if final payment has been made.
(9) Invoice number and date, if the final approved invoice has been
forwarded to a disbursing office of another agency or activity and the
status of the payment is unknown.
(10) A statement that all required contract administration actions
have
[[Page 37592]]
been fully and satisfactorily accomplished.
(11) Name and signature of the contracting officer.
(12) Date.
(c) When the statement is completed, the contracting officer must
place--
(1) The signed original in the contracting office contract file (or
forwarded to the contracting office for placement in the files if the
contract administration office is different from the contracting
office); and
(2) A signed copy in the appropriate contract administration file
if administration is performed by a contract administration office.
4.309-2 Contract closeout by the office administering the contract.
(a)(1) The contract administration office must initiate
administrative closeout of the contract after receiving evidence of its
physical completion, except for contracts under paragraph (b)(1) of
this section.
(2) Except as provided in paragraph (a)(3) of this section,
contract physical completion occurs when--
(i)(A) The contractor has completed the required deliveries and the
Government has inspected and accepted the supplies;
(B) The contractor has performed all services and the Government
has accepted these services; and
(C) All option provisions, if any, have expired; or
(ii) The Government has given the contractor a notice of complete
contract termination.
(3) Rental, use, and storage agreements physical completion occurs
when--
(i) The Government has given the contractor a notice of complete
contract termination; or
(ii) The contract period has expired.
(4) At the start of this process, the contract administration
office must review the contract funds status and notify the contracting
office of any excess funds the contract administration office might
deobligate.
(b) Except as provided in paragraph (d) of this section, contract
files should be closed according to Table 4-2.
Table 4-2--Time Standards for Closing Out Contract Files
------------------------------------------------------------------------
Files for: Should be:
------------------------------------------------------------------------
(1) Contracts using simplified Considered closed when the
acquisition procedures, except when invoice for the last
using the fast payment procedures in deliverable has been paid.
part 32.
(2)(i) Contracts using simplified Closed within 6 months after
acquisition procedures, and the fast the date on which the
payment procedures in part 32; or contracting officer receives
(ii) Firm-fixed-price contracts, other evidence of physical
than those using simplified completion.
acquisition procedures..
(3) Contracts requiring settlement of Closed within 36 months of the
indirect cost rates. month in which the contracting
officer receives evidence of
physical completion.
(4) All other contracts................ Closed within 20 months of the
month in which the contracting
officer receives evidence of
physical completion.
------------------------------------------------------------------------
(c) The closeout actions in paragraph (b) of this section may be
modified to reflect the extent of administration that has been
performed. Use quick closeout procedures (see part 42), when
appropriate, to reduce administrative costs and to enable deobligation
of excess funds.
(d) Do not close a contract file if--
(1) The contract is in litigation or under appeal; or
(2) In the case of a termination, all termination actions have not
been completed.
4.310 Storage, handling, and contract files.
(a) Agencies must keep acquisition records according to Table 4-3.
This requirement also applies to record copies stored on alternate
media when original documents have been converted to alternate media
for storage.
Table 4-3--Retention Periods
------------------------------------------------------------------------
Record Retention period
------------------------------------------------------------------------
(1) Contracts (and related records or 6 years after final payment.
documents, including successful and
unsuccessful proposals, except see
paragraph (a)(2) of this section
regarding contractor payrolls
submitted under construction
contracts.).
(2) Contractor's payrolls submitted 3 years after contract
under construction contracts according completion unless contract
to Department of Labor regulations (29 performance is the subject of
CFR 5.5(a)(3)), with related an enforcement action on that
certifications, anti-kickback date (see paragraph (a)(7) of
affidavits, and other related records. this section).
(3) Unsolicited proposals not accepted Retain according to agency
by a department or agency. procedures.
(4) Files for canceled solicitations... 6 years after cancellation.
(5) Other copies of procurement file When business use ceases.
records used for administrative
purposes.
(6) Data submitted to SAM Contract 6 years after submittal to SAM
Awards Management. Electronic data Contract Awards Management.
file maintained by fiscal year,
containing unclassified records of all
procurements exceeding the micro-
purchase threshold, and information
required under 4.302.
(7) Investigations, cases pending or in Until final clearance or
litigation (including protests), or settlement, or, if related to
similar matters (including enforcement a document identified in
actions). paragraphs (a)(1) through (6)
of this section, for the
retention period specified for
the related document,
whichever is later.
(8) Contracts involving Small Business 20 years after contract award,
Innovation Research/Small Business or at the end of the
Technology Transfer data rights which protection period as specified
include the clause at 52.227-30. in 52.227-30 as it appears in
the contract, whichever is
later.
------------------------------------------------------------------------
[[Page 37593]]
(b) Agencies must prescribe procedures for the handling, storing,
and disposing of contract files, according to the National Archives and
Records Administration (NARA) General Records Schedule 1.1, Financial
Management and Reporting Records. The Financial Management and
Reporting Records can be found at http://www.archives.gov/records-mgmt/grs.html. The procedures should conform with the regulatory
requirements in paragraph (a) of this section, which have been
acknowledged and approved by NARA in its guidance.
(c) If administrative records are mixed with program records and
cannot be reasonably separated, keep the entire file for the period
approved for the program records. Similarly, if documents described in
Table 4-3 are part of a subject or case file that documents activities
not described in the table, maintain them with the subject or case
file.
Subpart 4.4 Contractor Records Retention
4.400 Scope of subpart.
This subpart provides policies and procedures for contractors to
retain records to meet the records review requirements of the
Government. In this subpart, the terms ``contracts'' and
``contractors'' include ``subcontracts'' and ``subcontractors.''
4.401 Purpose.
The purpose of this subpart is to generally describe records
retention requirements and to allow reductions in the retention period
for specific classes of records under prescribed circumstances.
4.402 Applicability.
(a) This subpart applies to records generated under contracts that
contain one of the following clauses:
(1) Audit and Records--Sealed Bidding (52.214-26).
(2) Audit and Records--Negotiation (52.215-2).
(b) This subpart is not mandatory on Department of Energy contracts
for which the Comptroller General allows alternative records retention
periods. Apart from this exception, this subpart applies to record
retention periods under contracts that are subject to 10 U.S.C. chapter
137 legacy provisions (10 U.S.C. 3064) and 10 U.S.C. 3016 and chapter
203 or 40 U.S.C. 101, et seq.
4.403 Policy.
(a) Except as stated in 4.403(b), contractors must make available
records, which includes books, documents, accounting procedures and
practices, and other data, regardless of type and regardless of whether
such items are in written form, in the form of computer data, or in any
other form, and other supporting evidence to satisfy contract
negotiation, administration, and audit requirements of the contracting
agencies and the Comptroller General for--
(1) 3 years after final payment; or
(2) For certain records, the period specified in 4.405, whichever
of these periods expires first.
(b) Contractors must make available the foregoing records and
supporting evidence for a longer period than is required in 4.403(a)
if--
(1) A retention period longer than that cited in 4.403(a) is
specified in any contract clause; or
(2) The contractor, for its own purposes, retains the foregoing
records and supporting evidence for a longer period. Under this
circumstance, the retention period must be the period of the
contractor's retention or 3 years after final payment, whichever period
expires first.
(3) The contractor does not meet the original due date for
submission of final indirect cost rate proposals specified in paragraph
(d)(2) of the clause at 52.216-7, Allowable Cost and Payment. Under
these circumstances, the retention periods in 4.405 must be
automatically extended one day for each day the proposal is not
submitted after the original due date.
(c) Nothing in this section must be construed to preclude a
contractor from duplicating or storing original records in electronic
form unless they contain significant information not shown on the
record copy. Original records need not be maintained or produced in an
audit if the contractor or subcontractor provides photographic or
electronic images of the original records and meets the following
requirements:
(1) The contractor or subcontractor has established procedures to
ensure that the imaging process preserves accurate images of the
original records, including signatures and other written or graphic
images, and that the imaging process is reliable and secure to maintain
the integrity of the records.
(2) The contractor or subcontractor maintains an effective indexing
system to permit timely and convenient access to the imaged records.
(3) The contractor or subcontractor retains the original records
for a minimum of one year after imaging to permit periodic validation
of the imaging systems.
(d) If the information described in paragraph (a) of this section
is maintained on a computer, contractors must retain the computer data
on a reliable medium for the time periods prescribed. Contractors may
transfer computer data in machine readable form from one reliable
computer medium to another. Contractors' computer data retention and
transfer procedures must maintain the integrity, reliability, and
security of the original computer data. Contractors must also retain an
audit trail describing the data transfer. For the record retention time
periods prescribed, contractors must not destroy, discard, delete, or
write over such computer data.
4.404 Calculating retention periods.
(a) The retention periods in 4.405 are calculated from the end of
the contractor's fiscal year in which an entry is made charging or
allocating a cost to a Government contract or subcontract. If a
specific record contains a series of entries, the retention period is
calculated from the end of the contractor's fiscal year in which the
final entry is made. The contractor should cut off the records in
annual blocks and retain them for block disposal under the prescribed
retention periods.
(b) When a contractor relies upon records generated during a prior
contract for certified cost or pricing data in negotiating a succeeding
contract, the prescribed periods must run from the date of the
succeeding contract.
(c) If two or more of the record categories described in 4.405 are
interfiled and screening for disposal is not practical, the contractor
must retain the entire record series for the longest period prescribed
for any category of records.
4.405 Specific retention periods.
The contractor must retain records according to Table 4-4.
[[Page 37594]]
Table 4-4--Contractor Records Retention Periods
------------------------------------------------------------------------
Category Record type Retention period
------------------------------------------------------------------------
Financial and cost accounting Accounts receivable 4 years.
records. invoices, adjustments
to the accounts,
invoice registers,
carrier freight
bills, shipping
orders, and other
documents that detail
the material or
services billed on
the related invoices.
Material, work order, 4 years.
or service order
files, consisting of
purchase requisitions
or purchase orders
for material or
services, or orders
for transferring
material or supplies.
Cash advance 4 years.
recapitulations,
prepared as posting
entries to accounts
receivable ledgers
for amounts of
expense vouchers
prepared for
employees' travel and
related expenses.
Paid, canceled, and 4 years.
voided checks, other
than those issued for
paying salary and
wages.
Accounts payable 4 years.
records to support
disbursements of
funds for materials,
equipment, supplies,
and services,
containing originals
or copies of the
following and related
documents: remittance
advices and
statements, vendors'
invoices, invoice
audits and
distribution slips,
receiving and
inspection reports or
comparable
certifications of
receipt and
inspection of
material or services,
and debit and credit
memoranda.
Labor cost 2 years.
distribution cards or
equivalent documents.
Petty cash records 2 years.
describing
expenditures, to whom
paid, name of person
authorizing payment,
and date, including
copies of vouchers
and other supporting
documents.
Pay administration records.... Payroll sheets, 4 years.
registers, or their
equivalent, of
salaries and wages
paid to individual
employees for each
payroll period;
change slips; and tax
withholding
statements.
Clock cards or other 2 years.
time and attendance
cards.
Paid checks, receipts 2 years.
for wages paid in
cash, or other
evidence of payments
for services rendered
by employees.
Acquisition and supply records Store requisitions for 2 years.
materials, supplies,
equipment, and
services.
Work orders for 4 years.
maintenance and other
services.
Equipment records, 4 years.
consisting of
equipment usage and
status reports and
equipment repair
orders.
Expendable property 4 years.
records, reflecting
accountability for
receiving and using
material to perform a
contract.
Receiving and 4 years.
inspection report
records, consisting
of reports reflecting
receipt and
inspection of
supplies, equipment,
and materials.
Purchase order files 4 years.
for supplies,
equipment, material,
or services used to
perform a contract;
supporting
documentation and
backup files
including, but not
limited to, invoices,
and memoranda, e.g.,
memoranda of
negotiations showing
the principal
elements of
subcontract price
negotiations.
Production records of 4 years.
quality control,
reliability, and
inspection.
Property records (see 4 years.
part 45).
------------------------------------------------------------------------
PART 33--PROTESTS, DISPUTES, AND APPEALS
Sec.
33.000 Scope of part.
Subpart 33.1--Protests
33.100 Purpose of the bid protest system.
33.101 Applicability.
33.102 Definitions.
33.103 General.
33.104 Protests to the agency.
33.104-1 Scope.
33.104-2 Preaward.
33.104-3 Postaward.
33.104-4 Other procedures.
33.105 Protests to GAO.
33.105-1 GAO Bid Protest Regulations.
33.105-2 Preaward.
33.105-3 Postaward.
33.105-4 Other procedures.
33.106 Protests at the U.S. Court of Federal Claims.
33.107 Solicitation provision and contract clause.
Subpart 33.2--Disputes and Appeals
33.200 Scope.
33.201 Definitions.
33.202 Applicability.
33.203 The Disputes statute and Public Law 85-804.
33.204 Policy.
33.205 Postaward.
33.205-1 Contractor claim.
33.205-2 Contractor certification.
33.205-3 Interest on claims.
33.205-4 Suspected fraudulent claims.
33.205-5 Contracting officer's authority.
33.205-6 Contracting officer's decision.
33.205-7 Obligation to continue performance.
33.205-8 Alternative dispute resolution (ADR).
33.206 Contract clauses.
Authority: 41 U.S.C. 1121(b); 40 U.S.C. 121(c); 10 U.S.C.
chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C.
3016); and 51 U.S.C. 20113.
33.000 Scope of part.
This part outlines policies and procedures for filing protests and
for processing contract disputes and appeals.
Subpart 33.1--Protests
33.100 Purpose of the bid protest system.
(a) The bid protest system provides a prompt, fair, and transparent
way to resolve disputes concerning federal procurement actions.
(b) The objectives of the protest system are to:
(1) Ensure protests are decided efficiently and without undue
delay, to minimize disruption to contract award and performance;
(2) Support the effective and economical operation of the
Government by correcting procurement errors, as quickly as possible;
[[Page 37595]]
(3) Deter and discourage abuse of the bid protest process by
requiring clear and substantiated allegations of procurement
impropriety;
(4) Safeguard the rights of interested parties to obtain
independent review of procurement actions alleged to violate law or
regulation; and
(5) Promote integrity, competition, accountability, and public
confidence in the federal acquisition system by using available,
timely, and appropriate remedies.
(c) All participants in the protest process, including protesters,
agency officials, and intervenors, should act in a manner consistent
with these purposes to help resolve protests fairly and quickly.
(d) The protest process is not intended to serve as a way for
offerors to get post-award explanations, or debriefings. Interested
parties should address questions regarding the evaluation, award
rationale, or proposal deficiencies through established preaward or
postaward communication procedures, including formal debriefings where
applicable under 15.206, 15.301, or other relevant FAR parts.
(e) An incumbent contractor should not use protests as a way to
disrupt transition or induce contract extensions, unless legally and
factually sufficient grounds for protest exist.
33.101 Applicability.
(a) This subpart applies to protests filed with an agency or the
Government Accountability Office (GAO).
(b) This subpart, except for 33.100 and 33.103(c), does not apply
to bid protest or dispute appeal authorities where the United States
Court of Federal Claims has jurisdiction (see 28 U.S.C. 1491).
(c) This subpart does not apply to protests of small business
status (see 13 CFR part 121).
33.102 Definitions.
As used in this subpart--
Day means a calendar day, unless otherwise specified. In the
computation of any period--
(1) The day of the act, event, or default from which the designated
period of time begins to run is not included; and
(2) The last day after the act, event, or default is included.
However, if the last day is a Saturday, Sunday, or Federal holiday, or
the place for filing is closed for all or part of the last day, then
the deadline for filing is the next day the place is open.
Filed means the complete receipt of any document by an agency
before its close of business. Documents received after close of
business are considered filed as of the next day. Unless otherwise
stated, the agency close of business is presumed to be 4:30 p.m., local
time.
Interested Party for the purpose of filing a protest means an
actual or prospective offeror whose direct economic interest would be
affected by the award of a contract or by the failure to award a
contract.
Protest means a written objection by an interested party to any of
the following:
(1) A solicitation or other request by an agency for offers for a
contract for the procurement of property or services.
(2) The cancellation of the solicitation or other request.
(3) An award or proposed award of the contract.
(4) A termination or cancellation of an award of the contract, if
the written objection contains an allegation that the termination or
cancellation is based in whole or in part on improprieties concerning
the contract award.
33.103 General.
(a) Consulting with legal counsel. Whenever a contracting officer
becomes aware of a protest on one of their acquisitions, they should
consult with their designated legal counsel.
(b) Agency action on protests. If the head of an agency determines
that a solicitation, proposed award, or award does not comply with the
requirements of law or regulation, then, according to 41 U.S.C. 3708,
the head of the agency may--
(1) Take any action that could have been recommended by the
Comptroller General had the protest been filed with the Government
Accountability Office (see 31 U.S.C. 3554(b)(1)(A)(F);
(2) Pay appropriate costs as provided in 31 U.S.C. 3554(c);
(3)(i) Require the awardee to reimburse the Government's costs,
where a postaward protest is sustained due to the awardee's intentional
or negligent misstatement, misrepresentation, or miscertification, as
described in 52.233-3.
(ii) When a protest is sustained by GAO under circumstances that
may allow the Government to seek reimbursement for protest costs, the
contracting officer will determine whether the protest was sustained
based on the awardee's negligent or intentional misrepresentation. If
the protest was sustained on several issues, protest costs must be
apportioned according to the costs attributable to the awardee's
actions.
(iii)(A) The contracting officer must review the amount of the
debt, degree of the awardee's fault, and costs of collection, to
determine whether a demand for reimbursement ought to be made.
(B) If it is in the best interests of the Government to seek
reimbursement, the contracting officer must notify the awardee in
writing of the nature and amount of the debt, and the intention to
collect by offset if necessary.
(C) Before issuing a final decision, the contracting officer must
give the awardee an opportunity to inspect and copy agency records
about the debt to the extent permitted by statute and regulation, and
to request review of the matter by the head of the contracting
activity.
(c) Availability of funds. (1) When a protest is filed with GAO,
the Court of Federal Claims, or an agency regarding a solicitation,
proposed award, or award of a contract, and the agency's contract funds
available at the time the protest is filed would otherwise lapse, those
funds remain available for obligation for 100 days following the date
of the final ruling on the protest (31 U.S.C. 1558).
(2) A ruling is considered final on the date on which the time
allowed for filing an appeal or request for reconsideration has
expired, or the date on which a decision is rendered on such appeal or
request, whichever is later.
(d) Stop-work order. Whenever the contracting officer is required
or decides to suspend performance under this subpart, the contracting
officer must issue a written stop-work order, and must specifically
identify it as a stop-work order issued under 52.233-3, Protest after
Award.
(e) Contract transition. The contracting officer should document a
finding when a protest is filed by an incumbent contractor that
disrupts transition or induces an extension of their current contract
(see 33.100(e)).
33.104 Protests to the agency.
33.104-1 Scope.
(a) This section implements Executive Order 12979, Agency
Procurement Protests.
(b) The agency should provide for inexpensive, informal,
procedurally simple, and quick resolution of protests. Where
appropriate, the use of alternative dispute resolution techniques,
third party neutrals, and another agency's personnel are acceptable
protest resolution methods.
33.104-2 Preaward.
(a) Filing. Protests based on alleged apparent improprieties in a
solicitation must be filed before bid opening or the closing date for
receiving proposals. If
[[Page 37596]]
no closing time has been established, or if no further submissions are
anticipated, any alleged solicitation improprieties must be protested
within 10 days of when the alleged impropriety was known or should have
been known, whichever is earlier.
(b) Action upon receiving a protest before award. (1) A contract
may not be awarded until the agency resolves the protest, unless a
written justification is made for urgent and compelling reasons, or
award is determined in writing to be in the best interest of the United
States. Such justification must be approved at least one level above
the contracting officer.
(2) If award is withheld pending agency resolution of the protest,
the contracting officer will inform the offerors whose offers might
become eligible for award of the contract. If appropriate to avoid the
need to resolicit, the contracting officer should request that offerors
extend the time to accept their proposals. If offers are not extended,
then consideration should be given to proceeding with award pursuant to
paragraph (b)(1) of this section.
33.104-3 Postaward.
(a)(1) Protests must be filed no later than 10 days after the basis
of protest is known or should have been known, whichever is earlier,
except when a timely debriefing is requested and when requested, is
required. In such instances, the protest must not be filed before the
debriefing date offered to the protester, but must be filed no later
than ten days after the date the debriefing is held.
(2) If a protest is received within 10 days after contract award or
within 5 days after a debriefing date offered to the protester under a
timely debriefing request in accordance with 15.206-2 or 15.301-1,
whichever is later, then the contracting officer must immediately
suspend performance, pending resolution of the protest within the
agency, including any independent review by a higher level official,
unless continued performance is justified.
(b) Continued performance may be justified upon a written finding
that there are urgent and compelling reasons, or continued performance
is determined in writing to be in the best interest of the United
States. Such justification must be approved at least one level above
the contracting officer.
33.104-4 Other procedures.
(a) General. These procedures are established to resolve agency
protests effectively, to build confidence in the Government's
acquisition system, and to reduce protests outside of the agency:
(1) Before submitting an agency protest, parties must use their
best efforts to resolve concerns raised by an interested party at the
contracting officer level through open and frank discussions.
(2) Protests must be concise and logically presented to facilitate
review by the agency.
(3) Protests must include the following information. Failure to
comply may result in dismissing the protest.
(i) Name, email address, and telephone number of the protester.
(ii) Solicitation or contract number.
(iii) Detailed statement of the legal and factual grounds for the
protest, including a description of resulting prejudice to the
protester.
(iv) Copies of relevant documents.
(v) Request for a ruling by the agency.
(vi) Statement as to the form of relief requested.
(vii) All information establishing that the protester is an
interested party for the purpose of filing a protest.
(viii) All information establishing the timeliness of the protest.
(4)(i) Protests filed directly with the agency will be addressed to
the contracting officer or other official designated to receive
protests.
(ii) As soon as practicable after a protest is filed, the
contracting officer must notify the head of the contracting activity,
in accordance with agency procedures.
(5)(i) In accordance with agency procedures, interested parties may
request an independent review of their protest at a level above the
contracting officer; solicitations should advise potential bidders and
offerors that this review is available.
(ii) Agency procedures and/or solicitations must--
(A) Notify potential bidders and offerors whether this independent
review is available as an alternative to consideration by the
contracting officer of a protest, or is available as an appeal of a
contracting officer decision on a protest.
(B) Ensure that the protester receives a redacted copy of the
agency's final technical evaluation of the protester's proposal, and a
redacted copy of the source selection decision, if required for the
procurement, within a reasonable time after the protester elects the
independent review;
(C) Provide the protester an opportunity to raise additional
protest grounds, within a reasonable time set by the independent review
official, if the protester first became aware or should have been aware
of the basis for those additional grounds as a result of disclosure
according to paragraph (B) of this section.
(iii) Agencies must designate the official(s) who are to conduct
this independent review, but the official(s) need not be within the
contracting officer's supervisory chain. When possible, officials
designated to conduct the independent review should not have been
previously personally involved in the procurement.
(b) Timeliness. (1) The agency may consider the merits of any
protest that is not filed in time for good cause shown, or where it
determines that a protest raises issues significant to the agency's
acquisition system.
(2) Filing an agency protest does not extend the time for obtaining
a stay at GAO. Agencies may include, as part of the agency protest
process, a voluntary suspension period when agency protests are denied
and the protester subsequently files at GAO.
(3) If there is an agency appellate review of the contracting
officer's decision on the protest, it will not extend GAO's timeliness
requirements. Therefore, any subsequent protest to the GAO must be
filed within 10 days of knowledge of initial adverse agency action (4
CFR 21.2(a)(3)).
(c) Protest decisions. (1) Agencies must make their best efforts to
resolve agency protests within 35 days after the protest is received by
the contracting officer or an official conducting an independent review
requested according to paragraph (a)(5).
(2) Protest decisions must be well-reasoned, explain the agency
position for sustaining or denying the protest, and be provided to the
protester using a method that provides evidence of receipt.
33.105 Protests to GAO.
33.105-1 GAO Bid Protest Regulations.
Procedures for protests to GAO are found at 4 CFR part 21, Bid
Protest Regulations.
33.105-2 Preaward.
(a) If the agency receives notice of a protest from GAO before
award, then a contract may not be awarded unless the head of the
contracting activity authorizes contract award and performance. The
head of the contracting activity, on a nondelegable basis, may
authorize contract award and performance upon a written finding that--
(1) Urgent and compelling circumstances which significantly affect
the interest of the United States will not
[[Page 37597]]
allow waiting for a decision from GAO; and
(2) Award is likely to occur within 30 days of the written finding.
(b) An agency may not authorize contract award and performance
until the agency has notified GAO of the finding in paragraph (a) of
this section.
(c) When a protest against the making of an award is received and
award will be withheld pending disposition of the protest, the
contracting officer should inform the offerors whose offers might
become eligible for award of the protest. If appropriate, those
offerors should be requested, before the time for accepting their
offers expires, to extend the time for acceptance to avoid the need for
resolicitation. If offers are not extended, then consideration should
be given to proceeding under paragraph (a) of this section.
33.105-3 Postaward.
(a) If a protest is likely after award, then the contracting
officer may direct the contractor to stop performance within the time
period contained in paragraph (b)(1) of this section if the contracting
officer makes a written determination that--
(1) A protest is likely to be filed; and
(2) Delay of performance is, under the circumstances, in the best
interests of the United States.
(b)(1) If the agency receives notice of a protest from the GAO
within 10 days after contract award or within 5 days after a debriefing
date offered to the protester for any debriefing that is required by
15.206-2 or 15.301-1, whichever is later, then the contracting officer
must immediately suspend performance or terminate the awarded contract,
unless the head of the contracting activity authorizes contract
performance.
(2) The head of the contracting activity, on a nondelegable basis,
may authorize contract performance, upon a written finding that--
(i) Contract performance will be in the best interests of the
United States; or
(ii) Urgent and compelling circumstances that significantly affect
the interests of the United States will not permit waiting for the
GAO's decision.
(c) An agency must not authorize contract performance until the
agency has notified the GAO of the finding in paragraph (b)(2) of this
section.
(d) When it is decided to suspend performance or terminate the
awarded contract, the contracting officer should attempt to negotiate a
mutual agreement on a no-cost basis.
(e) When the agency receives notice of a protest filed with the GAO
after the dates contained in paragraph (b)(1) of this section, the
contracting officer does not have to suspend contract performance or
terminate the awarded contract unless the contracting officer believes
that an award may be invalidated and a delay in receiving the supplies
or services is not prejudicial to the Government's interest.
33.105-4 Other procedures.
(a) Agency report. Upon notice that a protest has been filed with
GAO, the contracting officer must immediately notify legal counsel and
begin compiling the information necessary for the agency report that
will be filed with GAO.
(b) Notice to GAO. If the agency has not fully implemented the GAO
recommendations with respect to a solicitation for a contract or an
award or a proposed award of a contract within 60 days of receiving the
GAO recommendations, then the head of the contracting activity must
report the failure to the GAO by 5 days later. The report must explain
the reasons why the GAO's recommendation, exclusive of costs, has not
been followed by the agency.
33.106 Protests at the U.S. Court of Federal Claims.
Procedures for protests at the U.S. Court of Federal Claims are set
forth in the rules of the U.S. Court of Federal Claims, found at
https://www.uscfc.uscourts.gov/filing-bid-protest.
33.107 Solicitation provision and contract clause.
(a) Insert the provision at 52.233-2, Service of Protest, in
solicitations if the acquisition value exceeds the simplified
acquisition threshold, including those for commercial products or
commercial services.
(b) Insert the clause at 52.233-3, Protest After Award, in all
solicitations and contracts, including those for commercial products or
commercial services, except cost reimbursement contracts. Use the
clause with its Alternate I for cost reimbursement contracts.
Subpart 33.2--Disputes and Appeals
33.200 Scope.
41 U.S.C. chapter 71, Contract Disputes, establishes procedures and
requirements for asserting and resolving claims subject to the Disputes
statute.
33.201 Definitions.
As used in this subpart--
Accrual of a claim means the date when all events that fix the
alleged liability of either the Government or the contractor and permit
assertion of the claim were known or should have been known. For
liability to be fixed, some injury must have occurred. However,
monetary damages need not have been incurred.
Alternative dispute resolution (ADR) means any type of procedure or
combination of procedures voluntarily used to resolve issues in
controversy. These procedures may include, but are not limited to,
conciliation, facilitation, mediation, fact-finding, minitrials,
arbitration, and use of ombudsmen.
Defective certification means a certificate that alters or
otherwise deviates from the language in 52.233-1(d)(2)(iii) or which is
not executed by a person authorized to bind the contractor with respect
to the claim. Failure to certify must not be deemed to be a defective
certification.
Issue in controversy means a material disagreement between the
Government and the contractor that (1) may result in a claim or (2) is
all or part of an existing claim.
Misrepresentation of fact means a false statement of substantive
fact, or any conduct that leads to the belief of a substantive fact
material to proper understanding of the matter in hand, made with
intent to deceive or mislead.
33.202 Applicability.
(a) Except as specified in paragraph (b) below, this subpart
applies to any express or implied contract covered by the Federal
Acquisition Regulation.
(b) This subpart does not apply to any contract with--
(1) A foreign government or agency of that government; or
(2) An international organization or a subsidiary body of that
organization, if the agency head determines that the application of the
Contract Disputes statute to the contract would not be in the public
interest.
(c) This subpart applies to all disputes with respect to
contracting officer decisions on matters ``arising under'' or
``relating to'' a contract. Agency Boards of Contract Appeals (BCAs)
(e.g., Armed Services Board of Contract Appeals or Civilian Board of
Contract Appeals) authorized under the Disputes statute continue to
have all of the authority they possessed before the Disputes statute
about disputes arising under a contract, as well as authority to decide
disputes relating to a contract.
(d) The clause at 52.233-1, Disputes, recognizes the ``all
disputes'' authority established by the Disputes statute, and states
certain requirements and limitations of the Disputes statute to guide
contractors and contracting
[[Page 37598]]
agencies. The clause is not intended to affect the rights and
obligations of the parties as provided by the Disputes statute or to
constrain the authority of the statutory agency BCAs in handling and
deciding contractor appeals under the Disputes statute.
33.203 The Disputes statute and Public Law 85-804.
(a) A contractor's allegation that it is entitled to rescission or
reformation of its contract in order to correct or mitigate the effect
of a mistake must be treated as a claim under the Dispute statute.
(b) A claim that is first submitted to the contracting officer for
consideration under the Disputes statute and is either denied or not
approved in its entirety under the Disputes statute may be presented by
the contractor as a request for relief under Public Law 85-804 (50
U.S.C. 1431-1435) as implemented by subpart 50.1.
33.204 Policy.
As a matter of policy, the Government tries to resolve all
contractual issues in controversy by mutual agreement at the
contracting officer's level. Reasonable efforts should be made to
resolve controversies before submitting a claim.
33.205 Postaward.
33.205-1 Contractor claim.
(a) Contractor claims against the Government. (1) Contractor
requirements for submission of claims are located at 52.233-1(d).
(2) The contracting officer must document in the contract file the
date of receipt of a claim submitted by a contractor.
(b) Government claims against a contractor. The contracting officer
must issue a written decision on any Government claim against a
contractor within 6 years after accrual of the claim, unless the
contracting parties agreed to a shorter time period, or the claim is
based on a contractor claim involving fraud.
33.205-2 Contractor certification.
(a) Contractor requirements for certification of claims exceeding
$100,000 are located at 52.233-1(d).
(b) Use the aggregate amount of both increased and decreased costs
to determine when the dollar thresholds requiring certification are met
(see example in 15.403-3(b)(3)(i) regarding certified cost or pricing
data).
(c) A defective certification does not deprive a court or an agency
BCA of jurisdiction over that claim. Before the entry of a final
judgment by a court or a decision by an agency BCA, the court or agency
BCA must require a defective certification to be corrected.
33.205-3 Interest on claims.
(a) The Government must pay interest on a contractor's claim on the
amount found due and unpaid from the date that--
(1) The contracting officer receives the claim (certified if
required by 33.205-2); or
(2) Payment otherwise would be due, if that date is later, until
the date of payment.
(b) Simple interest on claims must be paid at the rate, fixed by
the Secretary of the Treasury as provided in the Disputes statute,
which applies to the period during which the contracting officer
receives the claim and then at the rate that applies for each 6-month
period as fixed by the Treasury Secretary during the pendency of the
claim. (See the clause at 52.232-17 for the right of the Government to
collect interest on its claims against a contractor).
(c) Interest must be paid on claims having defective certifications
starting on the date that the contracting officer initially receives
the claim until the date the claim was paid, see 52.233-1(h).
33.205-4 Suspected fraudulent claims.
If the contractor is unable to support any part of the claim and
evidence reveals that the inability is due to misrepresentation of fact
or to fraud on the part of the contractor, the contracting officer must
refer the matter to the agency official responsible for investigating
fraud.
33.205-5 Contracting officer's authority.
(a) Contracting officers are authorized, within any specific
limitations defined in their warrants, to decide or resolve all claims
arising under or relating to a contract subject to the Disputes
statute, except this authority does not extend to--
(1) A claim or dispute for penalties or forfeitures prescribed by
statute or regulation that another Federal agency is specifically
authorized to administer, settle, or determine; or
(2) The settlement, compromise, payment or adjustment of any claim
involving fraud.
(b) Contracting officers can use ADR procedures to resolve claims,
according to agency policies and 33.205-8.
33.205-6 Contracting officer's decision.
(a) When a claim by or against a contractor cannot be satisfied or
settled by mutual agreement and a decision on the claim is necessary,
the contracting officer must--
(1) Review the facts relevant to the claim;
(2) Get help from legal and other advisors;
(3) Coordinate with the contract administration officer or
contracting office, as appropriate; and
(4) Prepare a written decision that--
(i) Includes the contracting officer's decision and supporting
rationale for the decision reached;
(ii) Substantially conveys the following:
``This is the final decision of the Contracting Officer. You may
appeal this decision to the agency board of contract appeals. If you
decide to appeal, you must, within 90 days from the date you receive
this decision, mail or otherwise furnish written notice to the agency
board of contract appeals and provide a copy to the Contracting Officer
from whose decision this appeal is taken. The notice must indicate that
an appeal is intended, refer to this decision, and identify the
contract by number.
With regard to appeals to the agency board of contract appeals, you
may, solely at your election, proceed under the board's--
(1) Small claim procedure for claims of $50,000 or less or, in the
case of a small business concern (as defined in the Small Business Act
and regulations under that Act), $150,000 or less; or
(2) Accelerated procedure for claims of $100,000 or less.
Instead of appealing to the agency board of contract appeals, you
may bring an action directly in the United States Court of Federal
Claims (except as provided in 41 U.S.C. 7102(d), regarding Maritime
Contracts) within 12 months of the date you receive this decision'';
and
(iii) Makes a demand for payment prepared according to 32.604 and
32.605 in all cases where the decision results in a finding that the
contractor is indebted to the Government.
(b) The contracting officer must furnish a copy of the decision to
the contractor by certified mail, return receipt requested, or by any
other method that provides evidence of receipt. This requirement
applies to decisions on claims initiated by or against the contractor.
(c) The contracting officer must issue the decision within the
following statutory time limitations:
(1) For claims of $100,000 or less, 60 days after receiving a
written request from the contractor that a decision be given within
that period, or within a reasonable time after receipt of the claim if
the contractor does not make such a request.
[[Page 37599]]
(2) For claims over $100,000, 60 days after receiving a certified
claim; provided, however, that if a decision will not be issued within
60 days, the contracting officer must notify the contractor, within
that period, of the time within which a decision will be issued.
(d) The contracting officer must issue a decision within a
reasonable time, taking into account--
(1) The size and complexity of the claim;
(2) The adequacy of the contractor's supporting data; and
(3) Any other relevant factors.
(e) The contracting officer has no obligation to render a final
decision on any claim exceeding $100,000 that contains a defective
certification, if within 60 days after receiving the claim, the
contracting officer notifies the contractor in writing of the reasons
why any attempted certification was found to be defective.
(f) In the event of undue delay by the contracting officer in
providing a decision on a claim, the contractor may request the
tribunal concerned to direct the contracting officer to issue a
decision in a specified time period that the tribunal decides.
(g) Any failure of the contracting officer to issue a decision
within the required time periods will be deemed a decision by the
contracting officer denying the claim and will authorize the contractor
to file an appeal or suit on the claim.
(h) The amount determined payable under the decision, less any
portion already paid, should be paid, if otherwise proper, without
awaiting contractor action concerning appeal. Such payment must be
without prejudice to the rights of either party.
33.205-7 Obligation to continue performance.
(a)(1) Before the passage of the Disputes statute, the obligation
to continue performance applied only to claims arising under a
contract. However, the Disputes statute, at 41 U.S.C. 7103(g),
authorizes agencies to require a contractor to continue contract
performance according to the contracting officer's decision pending a
final resolution of any claim arising under, or relating to, the
contract.
(2)(i) A claim arising under a contract is a claim that can be
resolved under a contract clause, other than the clause at 52.233-1,
Disputes, that provides for the relief sought by the claimant. However,
relief for such a claim can also be sought under the clause at 52.233-
1.
(ii) A claim relating to a contract is a claim that cannot be
resolved under a contract clause other than the clause at 52.233-1.
(b) In the event of a dispute relating to the contract, the
contracting officer must consider providing, through appropriate agency
procedures, financing of the continued performance, provided that the
Government's interest is properly secured.
33.205-8 Alternative dispute resolution (ADR).
(a)(1) Agencies are encouraged to use ADR procedures as much as
possible. Certain factors, however, may make the use of ADR
inappropriate (see 5 U.S.C. 572(b)).
(2) Except for arbitration conducted according to the
Administrative Dispute Resolution Act (ADRA), (5 U.S.C. 571, et seq.),
agencies have authority that is separate from that provided by the ADRA
to use ADR procedures to resolve issues in controversy. Agencies may
also choose to proceed under the authority and requirements of the
ADRA.
(b) The objective of using ADR procedures is to increase the
opportunity to relatively quickly and cheaply resolve an issue in
controversy. Essential elements of ADR include--
(1) An issue in controversy;
(2) Both parties choose to participate in the ADR process;
(3) Both parties agree on alternative procedures and terms instead
of formal litigation; and
(4) Officials of both parties who have the authority to resolve the
issue in controversy choose to participate in the process.
(c)(1) If the contracting officer rejects a contractor's request
for ADR proceedings, the contracting officer must give the contractor a
written explanation citing one or more of the conditions in 5 U.S.C.
572(b) or such other specific reasons that ADR procedures are
inappropriate to resolve the dispute.
(2) If a contractor rejects a request for ADR see 52.233-1(g).
(d) ADR procedures may be used at any time that the contracting
officer has authority to resolve the issue in controversy. If a claim
has been submitted, ADR procedures may apply to all or a portion of the
claim. When ADR procedures are used after a contracting officer has
issued their final decision, the contracting officer's use of ADR
procedures does not alter any of the time limitations or procedural
requirements for filing an appeal of the contracting officer's final
decision. The use of ADR procedures does not constitute a
reconsideration of the final decision.
(e) When appropriate, a neutral person may be used to help resolve
the issue in controversy using the procedures the parties chose.
(f) The confidentiality of ADR proceedings must be protected
consistent with 5 U.S.C. 574.
(g)(1) A solicitation must not require arbitration as a condition
of award, unless arbitration is otherwise required by law.
(2) An agreement to use arbitration must be in writing and must
specify a maximum award that the arbitrator may issue, as well as any
other conditions limiting the range of possible outcomes.
(h) Binding arbitration, as an ADR procedure, may be agreed to only
as specified in agency guidelines. Such guidelines must provide advice
on the appropriate use of binding arbitration and when an agency has
authority to settle an issue in controversy through binding
arbitration.
33.206 Contract clauses.
(a) Insert the clause at 52.233-1, Disputes, in solicitations and
contracts, including those for commercial products or commercial
services, except when the conditions in 33.202(b) apply.
(b) Insert the clause at 52.233-4, Applicable Law for Breach of
Contract Claim in all solicitations and contracts including those for
commercial products or commercial services.
PART 39--ACQUISITION OF INFORMATION AND COMMUNICATION TECHNOLOGY
Sec.
39.001 Applicability.
39.002 Definitions.
Subpart 39.1--Presolicitation
39.101 Management of risk.
39.102 Modular contracting.
39.103 Information technology services.
39.104 ICT accessibility standards.
39.104-1 Scope.
39.104-2 Policy.
39.104-3 Applicability.
39.104-4 Exceptions.
39.104-5 Exemptions.
39.105 Positioning, navigation, and timing services.
Subpart 39.2--Evaluation and Award
39.201 ICT accessibility standards for indefinite-quantity
contracts.
Subpart 39.3--Postaward
39.301 ICT accessibility standards for task orders or delivery
orders.
Authority: 41 U.S.C. 1121(b); 40 U.S.C. 121(c); 10 U.S.C.
chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C.
3016); and 51 U.S.C. 20113.
39.001 Applicability.
This part--
[[Page 37600]]
(a) Applies to acquiring information and communication technology
(ICT) and supplies and services that use ICT.
(b) Emphasizes strategies that promote faster acquisition and
secure deployment of technology that is new or emerging.
(c) Does not apply to acquiring information technology for national
security systems, as defined in 40 U.S.C. 11103.
39.002 Definitions.
As used in this part--
Cybersecurity means prevention of damage to, protection of, and
restoration of computers, electronic communications systems, electronic
communications services, wire communication, and electronic
communication, including information contained therein, to ensure its
availability, integrity, authentication, confidentiality, and
nonrepudiation (see NIST Special Publication 800-53 revision 5 at
https://csrc.nist.gov/pubs/sp/800/53/r5/upd1/final).
NICE Workforce Framework for Cybersecurity (NICE Framework) means a
common language for describing cybersecurity work which expresses the
work as task statements and includes knowledge and skill statements
that provide a foundation for learners including students, job seekers,
and employees (see NIST Special Publication 800-181 and additional
tools to implement it at https://www.nist.gov/itl/applied-cybersecurity/nice/nice-framework-resource-center).
Positioning, navigation, and timing (PNT) services means any
system, network, or capability that provides a reference to calculate
or augment the calculation of longitude, latitude, altitude, or
transmission of time or frequency data, or any combination thereof
(e.g., Global Positioning System) (see section 2(a) of Executive Order
13905 of February 12, 2020, Strengthening National Resilience Through
Responsible Use of Positioning, Navigation, and Timing Services).
Subpart 39.1--Presolicitation
39.101 Management of risk.
(a) Before entering into an information technology contract,
agencies should analyze risks, benefits, and costs. Reasonable risk
taking is appropriate as long as risks are controlled and mitigated.
(b) Both contracting and program office officials are responsible
for assessing, monitoring and controlling risk throughout the
acquisition process.
39.102 Modular contracting.
(a) Agencies should use modular contracting (i.e., use one or more
contracts to acquire information technology systems in successive,
interoperable increments) to acquire major systems of information
technology, to the maximum extent practicable (see 41 U.S.C. 2308).
Agencies may also use modular contracting to acquire non-major systems
of information technology.
(b) When acquiring an information technology system (i.e., either a
major system or non-major system), contracting officers may divide it
into several smaller increments that--
(1) Are easier to manage individually than would be possible in one
comprehensive acquisition;
(2) Address complex information technology objectives incrementally
to enhance the likelihood of achieving workable systems or solutions
for attainment of those objectives;
(3) Provide for delivery, implementation, and testing of workable
systems or solutions in discrete increments, each of which comprises a
system or solution that is not dependent on any subsequent increment in
order to perform its principal functions; and
(4) Provide an opportunity for subsequent increments to take
advantage of any evolution in technology or needs that occur during
implementation and use of the earlier increments.
(c) To promote compatibility, each increment should comply with
common or commercially acceptable information technology standards when
available and appropriate, and be compatible with other (including
earlier and later) increments.
(d) When using modular contracting, agencies should, to the maximum
extent practicable--
(1) Award a contract for an increment within 180 days after the
date the solicitation is issued. If an award cannot be made within 180
days, agencies should consider cancelling the solicitation in
accordance with 14.209(j) or 15.106(e).
(2) Schedule deliveries under the contract to occur within 18
months after the solicitation is issued.
39.103 Information technology services.
(a) When acquiring information technology services, solicitations
must not describe any minimum experience or educational requirements
for proposed contractor personnel, unless the contracting officer
determines that the needs of the agency--
(1) Cannot be met without that requirement; or
(2) Require using other than a performance-based acquisition (see
subpart 37.1).
(b) When acquiring information technology support services (e.g.,
backup and recovery services, technical support) or cybersecurity
support services (e.g., threat analysis, vulnerability analysis,
digital forensics, supply chain risk management), which are a subset of
information technology services, agencies must--
(1) Ensure any cybersecurity workforce tasks, knowledge, skills,
and work role requirements align with the NICE Framework;
(2) Ensure any cybersecurity workforce tasks, knowledge, skills,
and work role requirements comply with paragraph (a) of this section;
and
(3) Require any offers, quotes, and reporting requirements (e.g.,
contract deliverables) to align with the NICE Framework in effect at
the time of the solicitation.
39.104 ICT accessibility standards.
39.104-1 Scope.
(a) This section implements section 508 of the Rehabilitation Act
of 1973 (29 U.S.C. 794d), and the Architectural and Transportation
Barriers Compliance Board's (U.S. Access Board) ICT accessibility
standards at 36 CFR 1194.1.
(b) Further information on section 508 is available at https://www.section508.gov.
39.104-2 Policy.
When acquiring ICT, agencies must ensure that--
(a) Federal employees with disabilities have access to and use of
information and data that is comparable to the access and use by
Federal employees who are not individuals with disabilities; and
(b) Members of the public with disabilities seeking information or
services from an agency have access to and use of information and data
that is comparable to the access to and use of information and data by
members of the public who are not individuals with disabilities.
39.104-3 Applicability.
(a) General. Unless an exception at 39.104-4 or an exemption at
39.104-5 applies, acquisitions for ICT supplies and services must meet
the applicable ICT accessibility standards at 36 CFR 1194.1.
(b) Commercial products and commercial services. When acquiring
commercial products and commercial services, an agency must comply with
those ICT accessibility standards that
[[Page 37601]]
can be met with supplies or services that are available in the
commercial marketplace and that best address the agency's needs but see
39.104-5(a)(3).
(c) Legacy ICT. Any component or portion of existing ICT (i.e., ICT
that was procured, maintained, or used on or before January 18, 2018)
is not required to comply with the current ICT accessibility standards
if it--
(1) Complies with an earlier standard issued according to section
508 of the Rehabilitation Act of 1973 (29 U.S.C. 794d, which is set
forth in Appendix D to 36 CFR 1194.1); and
(2) Has not been altered (i.e., a change that affects
interoperability, the user interface, or access to information or data)
after January 18, 2018.
(d) Alterations of legacy ICT. When altering any component or
portion of existing ICT, after January 18, 2018, modify the component
or portion to conform to the current ICT accessibility standards in 36
CFR 1194.1.
39.104-4 Exceptions.
(a) The requirements in 39.104-2 do not apply to acquisitions for--
(1) National security systems. ICT operated by agencies as part of
a national security system, as defined by 40 U.S.C. 11103(a);
(2) Incidental contract items. ICT acquired by a contractor
incidental to a contract, (i.e., for in-house use by the contractor to
perform the contract); or
(3) Maintenance or monitoring spaces. The portions of ICT that are
operable parts (i.e., hardware-based user controls for activating,
deactivating, or adjusting ICT) or status indicators, and that are
located in spaces frequented only by service personnel for maintenance,
repair, or occasional monitoring of equipment.
(b) When an exception applies, the contracting officer must obtain,
as a part of the requirements documentation, written confirmation from
the requiring activity that an exception, in accordance with paragraph
(a)(1), (2), or (3) of this section, applies to the ICT supply or
service (see 7.103(b)(6)). The contracting officer must include this
documentation in the contract file.
39.104-5 Exemptions.
(a) Allowable exemptions. An agency may grant an exemption for the
following:
(1) Undue burden. When an agency determines the acquisition of ICT
conforming with all the applicable ICT accessibility standards would
impose an undue burden on the agency, compliance with the ICT
accessibility standards is only required to the extent that it would
not impose an undue burden. In determining whether conformance to one
or more ICT accessibility standards would impose an undue burden, an
agency must consider the extent to which conformance would impose
significant difficulty or expense considering the agency resources
available to the program or component for which the ICT supply or
service is being procured.
(2) Fundamental alteration. When an agency determines that
acquisition of ICT that conforms with all applicable ICT accessibility
standards would result in a fundamental alteration in the nature of the
ICT, such acquisition is required to conform only to the extent that
conformance will not fundamentally alter the nature of the ICT.
(3) Nonavailability of conforming commercial products and
commercial services. Where there are no commercial products and
commercial services that fully conform to the ICT accessibility
standards, the agency must procure the supplies or service available in
the commercial marketplace that best meets the ICT accessibility
standards consistent with the agency's needs.
(b) Alternative means of access. An agency must provide individuals
with disabilities access to and use of information and data by an
alternative means to meet the identified needs when an exemption in
paragraphs (a)(1), (2), or (3) of this section applies.
(c) Documentation. When an exemption applies, the contracting
officer must obtain, as part of the requirements documentation, a
written determination from the requiring activity explaining the basis
for the exemption in paragraphs (a)(1), (2) or (3) of this section. The
contracting officer must include this documentation in the contract
file.
(1) Undue burden. A determination of undue burden must address why
and to what extent compliance with applicable ICT accessibility
standards constitutes an undue burden.
(2) Fundamental alteration. A determination of fundamental
alteration must address the extent to which compliance with the
applicable ICT accessibility standards would fundamentally alter the
nature of the ICT.
(3) Nonavailability of conforming commercial products and
commercial services. A determination of commercial products and
commercial services nonavailability must include--
(i) A description of the market research performed;
(ii) A listing of the requirements that cannot be met; and
(iii) The rationale for determining that the ICT to be procured
best meets the ICT accessibility standards in 36 CFR 1194.1, consistent
with the agency's needs.
39.105 Positioning, navigation, and timing services.
When acquiring products, systems, or services that depend on PNT
services (e.g., Global Positioning System), the contracting officer
must work with the requiring activity to ensure the requirements
documents incorporate guidance from the Federal PNT Services
Acquisitions Guidance (available at https://www.cisa.gov/resources-tools/resources/federal-positioning-navigation-and-timing-services-acquisitions-guidance), as appropriate (see section 4(e) of Executive
Order 13905, of February 12, 2020, Strengthening National Resilience
Through Responsible Use of Positioning, Navigation, and Timing
Services).
Subpart 39.2--Evaluation and Award
39.201 ICT accessibility standards for indefinite-quantity contracts.
(a) The contracting officer is not required to confirm an exception
(see 39.104-4) or determine an exemption (see 39.104-5) before awarding
an indefinite-quantity contract.
(b) The contract must identify which supplies and services the
contractor indicates as compliant and show where to find full details
of compliance (e.g., a contractor may provide a link to a vendor's
website identifying supplies or services that are fully compliant with
ICT accessibility standards).
Subpart 39.3--Postaward
39.301 ICT accessibility standards for task orders or delivery orders.
When issuing a task order or delivery order under an indefinite-
quantity contract, the requiring activity and ordering activity must
ensure compliance with the ICT accessibility standards. For a
noncompliant ICT item, the requiring activity must document an
exception (see 39.104-4) or exemption (see 39.104-5).
PART 40--INFORMATION SECURITY AND SUPPLY CHAIN SECURITY
Sec.
40.000 Scope of part.
40.001 Definitions.
Subpart 40.1--Processing Supply Chain Risk Information
40.101 Definition.
40.102 Sharing supply chain risk information.
[[Page 37602]]
Subpart 40.2--Security Prohibitions and Exclusions
40.201 Definitions.
40.202 Prohibitions.
40.203 General procedures.
40.203-1 Assessment of proposals.
40.203-2 Disclosures.
40.203-3 Waivers and exceptions.
40.203-4 Reporting requirements.
40.204 Specific procedures.
40.204-1 FASCSA orders.
40.204-2 Covered procurement actions.
40.204-3 Sudan prohibition.
40.204-4 Iran prohibitions.
40.205 Solicitation provision and contract clause.
Subpart 40.3--Safeguarding Information
40.300 Scope.
40.301 Definitions.
40.302 Classified information.
40.302-1 National industrial security program.
40.302-2 Responsibilities of contracting officers.
40.302-3 Contract clause.
40.303 Covered Federal information.
40.303-1 Applicability.
40.303-2 Contract clause.
40.304 Controlled unclassified information (CUI).
40.304-1 Definitions.
40.304-2 Authorities.
40.304-3 Applicability.
40.304-4 Policy.
40.304-5 Procedures.
40.304-6 CUI incident reports.
40.304-7 Solicitation provision and contract clause.
Authority: 41 U.S.C. 1121(b); 40 U.S.C. 121(c); 10 U.S.C.
chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C.
3016); and 51 U.S.C. 20113.
40.000 Scope of part.
(a) This part addresses broad security requirements that apply to
acquisitions of products and services. It outlines policies and
procedures for managing information security and supply chain security
when acquiring products and services that include, but are not limited
to, information and communications technology (ICT).
(b) See parts 24 and 46 for more policies and procedures related to
managing information security and supply chain security.
(c) Information and supply chain policies and procedures that are
unrelated to security are covered in other parts of the FAR (e.g., part
22 for labor and human trafficking risks).
40.001 Definitions.
As used in this part--
Information means any communication or representation of knowledge
such as facts, data, or opinions in any medium or form, including
textual, numerical, graphic, cartographic, narrative, electronic, or
audiovisual forms (see OMB Circular A-130, Managing Information as a
Strategic Resource).
Supply chain means a linked set of resources and processes between
multiple tiers of developers that begins with the sourcing of products
and services and extends through the design, development,
manufacturing, processing, handling, and delivery of products and
services to the acquirer (see OMB Circular A-130, Managing Information
as a Strategic Resource).
Supply chain risk, as defined in 41 U.S.C. 4713(k), means the risk
that any person may sabotage, maliciously introduce unwanted
functionality, extract data, or otherwise manipulate the design,
integrity, manufacturing, production, distribution, installation,
operation, maintenance, disposition, or retirement of covered articles
so as to surveil, deny, disrupt, or otherwise manipulate the function,
use, or operation of the covered articles or information stored or
transmitted on the covered articles.
Subpart 40.1--Processing Supply Chain Risk Information
40.101 Definition.
As used in this subpart--
Supply chain risk information includes, but is not limited to,
information that describes or identifies:
(1) Functionality and features of covered articles, including
access to data and information system privileges;
(2) The user environment where a covered article is used or
installed;
(3) The ability of a source to produce and deliver covered articles
as expected;
(4) Foreign control of, or influence over, a source or covered
article (e.g., foreign ownership, personal and professional ties
between a source and any foreign entity, legal regime of any foreign
country in which a source is headquartered or conducts operations);
(5) Implications to government mission(s) or assets, national
security, homeland security, or critical functions associated with use
of a covered source or covered article;
(6) Vulnerability of Federal systems, programs, or facilities;
(7) Market alternatives to the covered source;
(8) Potential impact or harm caused by the possible loss, damage,
or compromise of a product, material, or service to an organization's
operations or mission;
(9) Likelihood of a potential impact or harm, or the possible
exploitation of a system;
(10) Security, authenticity, and integrity of covered articles and
their supply and compilation chains;
(11) Capacity to mitigate risks identified;
(12) Factors that may reflect upon the reliability of other supply
chain risk information; and
(13) Any other considerations that would factor into analyzing the
security, integrity, resilience, quality, trustworthiness, or
authenticity of covered articles or sources.
40.102 Sharing supply chain risk information.
Executive agencies must share relevant supply chain risk
information with the Federal Acquisition Security Council (FASC) if the
executive agency determines there is a reasonable basis to conclude a
substantial supply chain risk associated with a source or covered
article exists (see 41 CFR 201-1.201).
Subpart 40.2--Security Prohibitions and Exclusions
40.201 Definitions.
As used in this subpart--
American Security Drone Act-covered foreign entity means an entity
included on a list developed and maintained by the Federal Acquisition
Security Council (FASC) and published in the System for Award
Management (SAM) at https://www.sam.gov (section 1822 of Pub. L. 118-
31, 41 U.S.C. 3901 note prec.).
Backhaul means intermediate links between the core network, or
backbone network, and the subnetworks at the edge of the network (e.g.,
connecting cell phones/towers to the core telephone network). Backhaul
can be wireless (e.g., microwave) or wired (e.g., fiber optic, coaxial
cable, Ethernet).
Business operations means engaging in commerce in any form,
including by acquiring, developing, maintaining, owning, selling,
possessing, leasing, or operating equipment, facilities, personnel,
products, services, personal property, real property, or any other
apparatus of business or commerce.
Covered application means the social networking service TikTok or
any successor application or service developed or provided by ByteDance
Limited or an entity owned by ByteDance Limited.
Covered article, as defined in 41 U.S.C. 4713(k), means--
(1) Information technology, as defined in 40 U.S.C. 11101,
including cloud computing services of all types;
(2) Telecommunications equipment or telecommunications service, as
those terms are defined in section 3 of the Communications Act of 1934
(47 U.S.C. 153);
(3) The processing of information on a Federal or non-Federal
information
[[Page 37603]]
system, subject to the requirements of the Controlled Unclassified
Information program (see 32 CFR part 2002); or
(4) Hardware, systems, devices, software, or services that include
embedded or incidental information technology.
Covered foreign country means The People's Republic of China.
Covered procurement, as defined at 41 U.S.C. 4713(k), means--
(1) A source selection for a covered article involving either a
performance specification, as provided in 41 U.S.C. 3306(a)(3)(B), or
an evaluation factor, as provided in 41 U.S.C. 3306(b)(1)(A), relating
to a supply chain risk, or where supply chain risk considerations are
included in the agency's determination of whether a source is a
responsible source as defined in 41 U.S.C. 113 (see part 9);
(2) The consideration of proposals for, and issuance of a task or
delivery order for, a covered article, as provided in 41 U.S.C.
4106(d)(3), where the task or delivery order contract includes a
contract clause establishing a requirement relating to a supply chain
risk;
(3) Any contract action involving a contract for a covered article
where the contract includes a clause establishing requirements relating
to a supply chain risk; or
(4) Any other procurement in a category of procurements determined
appropriate by the Federal Acquisition Regulatory Council, with the
advice of the Federal Acquisition Security Council. The Federal
Acquisition Regulatory Council has not yet determined any categories.
Covered procurement action, as defined at 41 U.S.C. 4713(k), means
any of the following actions, if the action takes place in the course
of conducting a covered procurement--
(1) The exclusion of a source that fails to meet qualification
requirements established under 41 U.S.C. 3311 (see part 9) for the
purpose of reducing supply chain risk in the acquisition or use of
covered articles;
(2) The exclusion of a source that fails to achieve an acceptable
rating with regard to an evaluation factor providing for the
consideration of supply chain risk in the evaluation of proposals for
the award of a contract or the issuance of a task or delivery order;
(3) The determination that a source is not a responsible source as
defined in 41 U.S.C. 113 (see part 9) based on considerations of supply
chain risk; and
(4) The decision to withhold consent for a contractor to
subcontract with a particular source or to direct a contractor to
exclude a particular source from consideration for a subcontract under
the contract.
Covered telecommunications equipment or services means--
(1) Telecommunications equipment produced (i.e. manufactured,
designed, developed, or licensed intellectual property) by Huawei
Technologies Company or ZTE Corporation (or any subsidiary or affiliate
of such entities);
(2) For the purpose of public safety, security of Government
facilities, physical security surveillance of critical infrastructure,
and other national security purposes, video surveillance equipment and
telecommunications equipment produced by Hytera Communications
Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua
Technology Company (or any subsidiary or affiliate of such entities);
(3) Telecommunications services or video surveillance services
provided by such entities or using such equipment; or
(4) Telecommunications equipment, telecommunications services,
video surveillance equipment, or video surveillance services produced
or provided by an entity that the Secretary of Defense, in consultation
with the Director of National Intelligence (DNI) or the Director of the
Federal Bureau of Investigation (FBI), reasonably believes to be an
entity owned or controlled (see 31 CFR 800.208) by, or otherwise
connected to, the government of a covered foreign country.
FASCSA order means any of the following orders issued under the
Federal Acquisition Supply Chain Security Act (FASCSA) that requires
removing covered articles from executive agency information systems or
excluding one or more named sources or named covered articles from
executive agency procurement actions, as described in 41 CFR 201-
1.303(d) and (e):
(1) The Secretary of Homeland Security may issue FASCSA orders that
apply to civilian agencies, to the extent not covered by paragraph (2)
or (3) of this definition. This type of FASCSA order may be referred to
as a Department of Homeland Security (DHS) FASCSA order.
(2) The Secretary of Defense may issue FASCSA orders that apply to
the Department of Defense (DoD) and national security systems other
than sensitive compartmented information systems. This type of FASCSA
order may be referred to as a DoD FASCSA order.
(3) The Director of National Intelligence (DNI) may issue FASCSA
orders that apply to the intelligence community and sensitive
compartmented information systems, to the extent not covered by
paragraph (2) of this definition. This type of FASCSA order may be
referred to as a DNI FASCSA order.
Federal Acquisition Security Council (FASC) means the Council
established under 41 U.S.C. 1322(a).
Information technology, as defined in 40 U.S.C. 11101(6) --
(1) Means any equipment or interconnected system or subsystem of
equipment, used in the automatic acquisition, storage, analysis,
evaluation, manipulation, management, movement, control, display,
switching, interchange, transmission, or reception of data or
information by the executive agency, if the equipment is used by the
executive agency directly or is used by a contractor under a contract
with the executive agency that requires the use--
(i) Of that equipment; or
(ii) Of that equipment to a significant extent in the performance
of a service or the furnishing of a product;
(2) Includes computers, ancillary equipment (including imaging
peripherals, input, output, and storage devices necessary for security
and surveillance), peripheral equipment designed to be controlled by
the central processing unit of a computer, software, firmware and
similar procedures, services (including support services), and related
resources; but
(3) Does not include any equipment acquired by a Federal contractor
incidental to a Federal contract.
Intelligence community, as defined by 50 U.S.C. 3003(4), means--
(1) The Office of the Director of National Intelligence;
(2) The Central Intelligence Agency;
(3) The National Security Agency;
(4) The Defense Intelligence Agency;
(5) The National Geospatial-Intelligence Agency;
(6) The National Reconnaissance Office;
(7) Other offices within DoD for the collection of specialized
national intelligence through reconnaissance programs;
(8) The intelligence elements of the Army, the Navy, the Air Force,
the Marine Corps, the Space Force, the Coast Guard, the Federal Bureau
of Investigation, the Drug Enforcement Administration, and the
Department of Energy;
(9) The Bureau of Intelligence and Research of the Department of
State;
(10) The Office of Intelligence and Analysis of the Department of
the Treasury;
(11) The Office of Intelligence and Analysis of the Department of
Homeland Security; or
[[Page 37604]]
(12) Such other elements of any department or agency as may be
designated by the President, or designated jointly by the Director of
National Intelligence and the head of the department or agency
concerned, as an element of the intelligence community.
Kaspersky Lab-covered article means any hardware, software, or
service that--
(1) Is developed or provided by a Kaspersky Lab-covered entity;
(2) Includes any hardware, software, or service developed or
provided in whole or in part by a Kaspersky Lab-covered entity; or
(3) Contains components using any hardware or software developed in
whole or in part by a Kaspersky Lab-covered entity.
Kaspersky Lab-covered entity means--
(1) Kaspersky Lab;
(2) Any successor entity to Kaspersky Lab, including any change in
name, e.g., ``Kaspersky'';
(3) Any entity that controls, is controlled by, or is under common
control with Kaspersky Lab; or
(4) Any entity of which Kaspersky Lab has a majority ownership.
Marginalized populations of Sudan means--
(1) Adversely affected groups in regions authorized to receive
assistance under section 8(c) of the Darfur Peace and Accountability
Act (Pub. L. 109-344) (50 U.S.C. 1701 note); and
(2) Marginalized areas in Northern Sudan described in section 4(9)
of such Act.
National security system, as defined in 44 U.S.C. 3552, means any
information system (including any telecommunications system) used or
operated by an agency or by a contractor of an agency, or other
organization on behalf of an agency--
(1) The function, operation, or use of which involves intelligence
activities; involves cryptologic activities related to national
security; involves command and control of military forces; involves
equipment that is an integral part of a weapon or weapons system; or is
critical to the direct fulfillment of military or intelligence
missions, but does not include a system that is to be used for routine
administrative and business applications (including payroll, finance,
logistics, and personnel management applications); or
(2) Is protected at all times by procedures established for
information that have been specifically authorized under criteria
established by an Executive order or an Act of Congress to be kept
classified in the interest of national defense or foreign policy.
Sensitive compartmented information means classified information
concerning or derived from intelligence sources, methods, or analytical
processes, which is required to be handled within formal access control
systems established by the Director of National Intelligence.
Sensitive compartmented information system means a national
security system authorized to process or store sensitive compartmented
information.
Source means a non-Federal supplier, or potential supplier, of
products or services, at any tier.
Subsidiary means an entity in which more than 50 percent of the
entity is owned directly by a parent corporation or through another
subsidiary of a parent corporation.
Telecommunications equipment means equipment used to produce,
transmit, emit, or receive, or store signals, signs, writing, images,
sounds, or intelligence of any nature, by wire, cable, satellite, fiber
optics, laser, radio, or any other electronic, electric,
electromagnetic, or acoustically coupled means.
Telecommunications services means services used to produce,
transmit, emit, or receive, or store signals, signs, writing, images,
sounds, or intelligence of any nature, by wire, cable, satellite, fiber
optics, laser, radio, or any other electronic, electric,
electromagnetic, or acoustically coupled means.
Unmanned aircraft means an aircraft that is operated without the
possibility of direct human intervention from within or on the aircraft
(49 U.S.C. 44801(11)).
Unmanned aircraft system means an unmanned aircraft and associated
elements (including communication links and the components that control
the unmanned aircraft) that are required for the operator to operate
safely and efficiently in the national airspace system (49 U.S.C.
44801(12)). See 41 CFR 201-1.101 for the list of associated elements
identified by the FASC.
Video surveillance equipment means equipment used to identify or
monitor activities or information through use of imaging, visual, or
audio methods.
Video surveillance services means services used to identify or
monitor activities or information through use of imaging, visual, or
audio methods.
40.202 Prohibitions.
Agencies are prohibited from contracting, including renewing or
extending contracts, with contractors that operate, provide, or use
certain products or services that violate any of the following
prohibitions (see the clause at 52.240-3 for details regarding the
scope of each prohibition and whether there are any exceptions,
exemptions, or waiver possibilities):
(a) TikTok/ByteDance. Covered Application (Section 102 of Division
R of the Consolidated Appropriations Act, 2023 (Pub. L. 117-328)).
(b) Kaspersky. Kaspersky Lab-covered article (Section 1634 of
Division A of the National Defense Authorization Act (NDAA) for Fiscal
Year 2018 (Pub. L. 115-91).
(c) Drones. Unmanned Aircraft Systems Manufactured or Assembled by
American Security Drone Act--Covered Foreign Entities (American
Security Drone Act of 2023, within the NDAA for Fiscal Year 2024 (Pub.
L. 118-31, Div. A, Title XVIII, Subtitle B, 41 U.S.C. 3901 note
prec.)).
(d) Telecommunications and video surveillance equipment.
(Paragraphs (a)(1)(A) and (a)(1)(B) of section 889 of the John S.
McCain NDAA for Fiscal Year 2019 (Pub. L. 115-232)).
(e) Governmentwide exclusion orders. FASCSA orders (sections 1823
and 1826 of Pub. L. 118-31, 41 U.S.C. 3901 note prec.).
(f) Covered procurement actions (41 U.S.C. 4713).
(g) Office of Foreign Assets Control (OFAC) restrictions. OFAC
Restrictions (International Emergency Economic Powers Act (IEEPA) (50
U.S.C. 1701 et seq.)).
(h) Sudan prohibition. Accountability and Divestment Act of 2007
(Pub. L. 110-174).
(i) Iran prohibitions. Section 6(b)(1)(A) of Iran Sanctions Act (50
U.S.C. 1701 note) and section 6(b)(1)(B) of Iran Sanctions Act (50
U.S.C. 1701 note).
40.203 General procedures.
40.203-1 Assessment of proposals.
Except where an exemption, exception, or waiver applies, the
contracting officer should work with the program office or requiring
activity to review proposals if needed to ensure they are not proposing
delivery of a product or service in violation of the prohibitions in
40.202, such as a FASC-prohibited unmanned aircraft system (drone).
40.203-2 Disclosures.
If the offeror submits a disclosure according to 52.240-2, the
contracting officer must follow agency procedures to determine if an
exception or exemption applies with any prohibition or if a waiver may
be applicable in accordance with 40.203-3.
40.203-3 Waivers and exceptions.
(a) An acquisition may be either fully or partially covered by a
waiver or
[[Page 37605]]
exception. Partial waiver or exception coverage occurs when an
applicable waiver or exception covers only portions of the products or
services being procured or provided by a source. If the requiring
activity notifies the contracting officer that the acquisition is
partially covered by an approved exception, individual waiver, or class
waiver, then the contracting officer must work with the program office
or requiring activity to identify the products or services that are
subject to the waiver or exception in the solicitation, request for
quotation, or order.
(b) The contracting officer, in accordance with agency procedures,
must decide whether to pursue a waiver or exception or to make award to
an offeror that does not require a waiver or exception. If a full or
partial waiver or exception is being pursued, then the contracting
officer may not make an award until written approval is obtained that
the waiver or exception has been granted.
40.203-4 Reporting requirements.
If a contractor submits a report according to 52.240-3, the
contracting officer must follow agency procedures to determine if an
exception or exemption applies with any prohibition, or if a waiver may
be applicable in accordance with 40.203-3.
40.204 Specific procedures.
40.204-1 FASCSA orders.
(a) Identifying applicable FASCSA orders. Whether FASCSA orders
apply to a particular acquisition depends on the contracting office's
agency, the scope of the FASCSA order, the funding, and whether the
requirement involves certain types of information systems (see the
definition of ``FASCSA order'' at 40.201).Coordinate with the program
office or requiring activity to identify the FASCSA order(s) that apply
to the acquisition as follows:
(1) Unless the program office or requiring activity instructs the
contracting officer otherwise, FASCSA orders apply as follows:
(i) Contracts awarded by civilian agencies will be subject to DHS
FASCSA orders.
(ii) Contracts awarded by DoD will be subject to DoD FASCSA orders.
See paragraph (e)(1) of 52.240-3, Security Prohibitions and Exclusions.
(2) For acquisitions where the program office or the requiring
activity instructs the contracting officer to select specific types of
FASCSA orders, select ``yes'' or ``no'' for each applicable type of
FASCSA order. See paragraph (e)(1) of 52.240-3, Security Prohibitions
and Exclusions, with its Alternate I.
(b) Federal Supply Schedules, Governmentwide acquisition contracts,
and multi-agency contracts specific procedures.
(1) Applying FASCSA orders. An agency awarding this type of
contract must apply FASCSA orders to the basic contract award. Ordering
activity contracting officers may use this contract vehicle without
taking further steps to identify applicable FASCSA orders in the order.
The contracting officer awarding the basic contract would select
``yes'' for all FASCSA orders (i.e., ``DHS FASCSA Order'' ``DoD FASCSA
Order'' and ``DNI FASCSA Order'') (see paragraph (e)(1) of 52.240-3,
Security Prohibitions and Exclusions, with its Alternate I). If the
contracting officer becomes aware of a newly issued applicable FASCSA
order, then the agency awarding the basic contract must modify the
basic contract to remove any covered article, or any products or
services produced or provided by a source, prohibited by the newly
issued FASCSA order.
(2) Interagency acquisitions. For an interagency acquisition (see
subpart 17.5) where the funding agency differs from the awarding
agency, the funding agency must determine the applicable FASCSA orders.
(c) Updating the solicitation or contract for new FASCSA orders.
The contracting officer must update a solicitation or contract if the
program office or requiring activity determines it needs to--
(1) Amend the solicitation to include FASCSA orders in effect after
the date the solicitation was issued but before contract award; or
(2) Modify the contract to include FASCSA orders issued after the
date of contract award.
(i) Any such modification should take place within a reasonable
amount of time, but no later than 6 months from the program office or
requiring activity's determination.
(ii) If the contract is not modified within the time specified in
paragraph (c)(2)(i) of this section, then document the contract file
with the reason why the contract could not be modified within this
timeframe.
(d) Agency specific procedures. Follow agency procedures for
implementing FASCSA orders not identified in SAM.
(e) Exceptions.
(1) An executive agency required to comply with a FASCSA order may
submit a request that the order or some of its provisions not apply
to--
(i) The agency;
(ii) Specific actions of the agency or a specific class of
acquisitions;
(iii) Actions of the agency for a period of time before compliance
with the order is practicable; or
(iv) Other activities, as appropriate, that the requesting agency
identifies.
(2) The executive agency must submit a written exception request to
the official that issued the order, unless other instructions for
submission are provided by the applicable FASCSA order.
(3) Provide the following information in the exception request for
the issuing official to review and evaluate the request:
(i) Identification of the applicable FASCSA order.
(ii) A description of the exception sought, including, if limited
to only a portion of the order, a description of the order provisions
from which an exception is sought.
(iii) The name or a description sufficient to identify the covered
article or the product or service provided by a source that is subject
to the order from which an exception is sought.
(iv) Compelling justification for why an exception should be
granted, such as the impact of the order on the agency's ability to
fulfill its mission-critical functions, or considerations related to
the national interest, including national security reviews, national
security investigations, or national security agreements.
(v) Any alternative mitigations to reduce the risks addressed by
the FASCSA order.
(vi) Any other information requested by the issuing official.
40.204-2 Covered procurement actions.
(a) Agency responsibilities. Agencies must establish procedures to
ensure compliance with the requirements in 41 U.S.C. 4713. Covered
procurement actions apply to a single covered procurement or a class of
covered procurements as determined by the agency carrying out the
action.
(b) Identifying covered procurement actions. The contracting
officer must identify in the solicitation and contract any source or
specified product or service that is subject to covered procurement
action identified as applicable by the program office or requiring
activity.
(c) Updating the solicitation or contract for new covered
procurement actions. The contracting officer must update a solicitation
or contract if the program office or requiring activity determines
there is a need to--
(1) Amend the solicitation to include a source or specified product
or service
[[Page 37606]]
that is subject to a covered procurement action in effect after the
date the solicitation was issued but before contract award; or
(2) Modify the contract to include a source or specified product or
service that is subject to a covered procurement action issued after
the date of contract award.
(i) Any such modification should take place within a reasonable
amount of time, but no later than 6 months from the program office or
requiring activity's determination.
(ii) If the contract is not modified within the time specified in
paragraph (b)(2)(i) of this section, then document the contract file
with the reason why the contract could not be modified within this
timeframe.
(d) Agency specific procedures. Follow agency procedures for
implementing covered procurement actions for any source or specific
product not identified in SAM.
(e) Waivers. The contracting officer must follow agency procedures
for reviewing any waiver requests from an offeror or contractor.
40.204-3 Sudan prohibition.
(a) Waivers.
(1) The President may waive the certification within the provision
at 52.240-2(f) on a case-by-case basis if the President determines and
certifies in writing to the appropriate congressional committees that
it is in the national interest to do so.
(2) An agency seeking waiver of the requirement must submit the
request to the Administrator of the Office of Federal Procurement
Policy (OFPP), allowing sufficient time for review and approval. Upon
receipt of the waiver request, OFPP must consult with the President's
National Security Council and the Department of State to assess foreign
policy aspects of making a national interest recommendation.
(3) Agencies may request a waiver on an individual or class basis;
however, waivers are not indefinite and can be cancelled if warranted.
(i) Request a waiver only when the class of supplies is not
available from any other source, and it is in the national interest.
(ii) Prior to submitting the waiver request, the agency head must
review and clear the request.
(iii) All waiver requests must include the following information:
(A) Agency name and point of contact name, telephone number, and
email address.
(B) Offeror's name, complete mailing address, and point of contact
name, telephone number, and email address.
(C) Description/nature of product or service.
(D) The total price and length of the contract.
(E) Justification, with market research demonstrating that no other
offeror can provide the product or service and stating why the product
or service must be procured from this offeror, as well as why it is in
the national interest for the President to waive the prohibition on
contracting with this offeror that conducts restricted business
operations in Sudan, including consideration of foreign policy aspects
identified in consultation(s) pursuant to paragraph(a)(2)of this
section.
(F) Documentation regarding the offeror's past performance and
integrity.
(G) Information regarding the offeror's relationship or connection
with other firms that conduct prohibited business operations in Sudan.
(H) Any humanitarian efforts engaged in by the offeror, the human
rights impact of doing business with the offeror for which the waiver
is requested, and the extent of the offeror's business operations in
Sudan.
(4) The consultation in paragraph (a)(2) of this section and the
information in paragraph (a)(3)(iii) of this section will be considered
in determining whether to recommend that the President waive the
certification within the provision at 52.240-2(f). In accordance with
section 6(c) of the Sudan Accountability and Divestment Act of 2007,
OFPP will semiannually submit a report to Congress, on April 15th and
October 15th, on the waivers granted.
(b) Remedies. Upon the determination of a false certification
within the provision at 52.240-2(f)--
(1) The contracting officer may terminate the contract;
(2) The suspending and debarring official (SDO) may suspend the
contractor in accordance with the procedures in part 9; and
(3) The SDO may debar the contractor for a period not to exceed 3
years in accordance with the procedures in part 9.
40.204-4 Iran prohibitions.
(a) Waivers.
(1) An agency seeking a waiver of the representation and
certifications in the provision at 52.240-2(g) or the prohibition in
the clause at 52.240-3(d)(4), consistent with section 6(b)(5) of the
Iran Sanctions Act or 22 U.S.C. 8551(b), respectively, and the
Presidential Memorandum of September 23, 2010 (75 FR 67025), must
submit the request to OFPP, allowing sufficient time for review and
approval.
(2) Agencies may request a waiver on an individual or class basis;
however, waivers are not indefinite and can be cancelled, if warranted.
(i) Request a class waiver only when the class of supplies or
equipment is not available from any other source and it is in the
national interest.
(ii) Prior to submitting the waiver request, the agency head must
review and clear the request.
(3) In general, all waiver requests should include the following
information:
(i) Agency name and point of contact name, telephone number, and
email address.
(ii) Offeror's name, complete mailing address, and point of contact
name, telephone number, and email address.
(iii) Description/nature of product or service.
(iv) The total price and length of the contract.
(v) Justification, with market research demonstrating that no other
offeror can provide the product or service and stating why the product
or service must be procured from this offeror.
(A) If the offeror exports sensitive technology to the government
of Iran or any entities or individuals owned or controlled by, or
acting on behalf or at the direction of, the government of Iran,
provide rationale why it is in the national interest for the President
to waive the prohibition on contracting with this offeror, as required
by 22 U.S.C. 8551(b).
(B) If the offeror conducts activities for which sanctions may be
imposed under section 5 of the Iran Sanctions Act or engages in any
transaction that exceeds the certification transaction threshold within
the provision at 52.240-2(g)(1)(iii) with Iran's Revolutionary Guard
Corps or any of its officials, agents, or affiliates, the property and
interests in property of which are blocked pursuant to the
International Emergency Economic Powers Act, provide rationale why it
is essential to the national security interests of the United States
for the President to waive the prohibition on contracting with this
offeror, as required by section 6(b)(5) of the Iran Sanctions Act.
(vi) Documentation regarding the offeror's past performance and
integrity.
(vii) Information regarding the offeror's relationship or
connection with other firms that--
(A) Export sensitive technology to the government of Iran or any
entities or individuals owned or controlled by, or acting on behalf or
at the direction of, the government of Iran;
[[Page 37607]]
(B) Conduct activities for which sanctions may be imposed under
section 5 of the Iran Sanctions Act; or
(C) Conduct any transaction that exceeds the certification
transaction threshold within the provision at 52.240-2(g)(1)(iii) with
Iran's Revolutionary Guard Corps or any of its officials, agents, or
affiliates, the property and interests in property of which are blocked
pursuant to the International Emergency Economic Powers Act.
(viii) Describe--
(A) The sensitive technology and the entity or individual to which
it was exported (i.e., the government of Iran or an entity or
individual owned or controlled by, or acting on behalf or at the
direction of, the government of Iran);
(B) The activities in which the offeror is engaged for which
sanctions may be imposed under section 5 of the Iran Sanctions Act; or
(C) The transactions that exceed the certification transaction
threshold within the provision at 52.240-2(g)(1)(iii) with Iran's
Revolutionary Guard Corps or any of its officials, agents, or
affiliates, the property and interests in property of which are blocked
pursuant to the International Emergency Economic Powers Act.
(b) Remedies. Upon the determination of a false certification
within the provision at 52.240-2(g)(1)(ii) or at 52.240-2(g)(1)(iii),
the agency must take one or more of the following actions:
(1) The contracting officer terminates the contract in accordance
with procedures in part 49, or for commercial products and commercial
services, see part 12.
(2) The SDO suspends the contractor in accordance with the
procedures in part 9.
(3) The SDO debars the contractor for a period of at least two
years in accordance with the procedures in part 9.
40.205 Solicitation provision and contract clause.
(a) Insert the provision at 52.240-2, Security Prohibitions and
Exclusions--Representations and Certifications, in all solicitations
including those for commercial products or commercial services.
(b)(1) Except as prescribed in paragraph (b)(2), insert the clause
at 52.240-3, Security Prohibitions and Exclusions, in all solicitations
and contracts including those for commercial products or commercial
services.
(2) Insert the clause with its Alternate I including for
acquisitions of commercial products or commercial services in--
(i) Federal Supply Schedules, Governmentwide acquisition contracts,
and multi-agency contracts; and
(ii) Where the program office or the requiring activity instructs
the contracting officer to select specific types of FASCSA orders.
Subpart 40.3--Safeguarding Information
40.300 Scope.
(a) This subpart provides policies and procedures for safeguarding
classified information, controlled unclassified information (CUI), and
covered Federal information.
(b) Part 27, Patents, Data, and Copyrights, contains policy and
procedures for safeguarding classified information in patent
applications and patents.
40.301 Definitions.
As used in this subpart--
Covered contractor information system means an information system
that is owned, or operated by or for, a contractor and that processes,
stores, or transmits covered Federal information.
Covered Federal information means information provided by or
created for the Government, when that information is other than--
(1) Simple transactional information (such as that necessary to
process payments);
(2) Information already publicly released (such as on public
websites), or marked for public release, by the Government;
(3) Federally-funded basic and applied research at colleges,
universities, and laboratories in accordance with National Security
Decision Directive 189;
(4) CUI; or
(5) Classified information.
Handle or handling means any use of information, including but not
limited to accessing, processing, collecting, developing, receiving,
transmitting, storing, marking, safeguarding, transporting,
disseminating, reusing, and disposing of the information.
Information system means a discrete set of information resources
organized for the collection, processing, maintenance, use, sharing,
dissemination, or disposition of information (44 U.S.C. 3502).
40.302 Classified information.
40.302-1 National industrial security program.
This section provides policies and procedures to implement the
National Industrial Security Program according to Executive Order
12829, January 6, 1993 (58 FR 3479, January 8, 1993), titled ``National
Industrial Security Program'' (NISP). Executive Order 12829 amends
Executive Order 10865, February 20, 1960 (25 FR 1583, February 25,
1960), entitled ``Safeguarding Classified Information Within
Industry,'' as amended by Executive Order 10909, January 17, 1961 (26
FR 508, January 20, 1961). This program safeguards Federal Government
classified information. The following publications implement the
program:
(a) National Industrial Security Program Operating Manual (NISPOM)
(32 CFR part 117).
(b) DoD Manual 5220.32 Volume 1, National Industrial Security
Program: Industrial Security Procedures for Government Activities.
40.302-2 Responsibilities of contracting officers.
(a) Review all proposed solicitations to determine whether offerors
or contractors may handle classified information.
(b) Nondefense agencies that have industrial security services
agreements with DoD and DoD components must use the Contract Security
Classification Specification, DD Form 254. The contracting officer or
authorized agency representative is the approving official for the DD
Form 254 associated with the prime contract and must ensure the DD Form
254 is properly prepared, distributed by and coordinated with
requirements and security personnel, according to agency procedures.
40.302-3 Contract clause.
(a) Insert the clause at 52.240-4, Classified Information, in
solicitations and contracts when the contract may handle classified
information, including those for commercial products or commercial
services unless the conditions specified in paragraph (d) of this
section apply.
(b) If a cost contract for research and development with an
educational institution is considered, use the clause with its
Alternate I.
(c) If a construction or architect-engineer contract, including
construction that is a commercial service where employee identification
is required for security reasons use the clause with its Alternate II.
(d) If the contracting agency is not covered by the NISP and has
prescribed a clause and alternates that are substantially the same as
those at 52.240-4, the contracting officer must use the agency-
prescribed clause as required by agency procedures.
[[Page 37608]]
40.303 Covered Federal information.
40.303-1 Applicability.
This section applies to all acquisitions, including acquisitions of
commercial products or commercial services when a contractor may handle
covered Federal information or a contractor's information system may
contain covered Federal information.
40.303-2 Contract clause.
Insert the clause at 52.240-5, Covered Federal Information, in
solicitations and contracts including those for commercial products and
commercial services when the contractor or a subcontractor at any tier
may handle covered Federal information.
40.304 Controlled unclassified information (CUI).
40.304-1 Definitions.
As used in this section--
Authorized holder is an individual, agency, organization (e.g.,
contractor), or group of users that is permitted to handle CUI, in
accordance with this part.
CUI Basic means the subset of CUI for which the authorizing law,
regulation, or Governmentwide policy does not set out specific handling
or dissemination controls. CUI Basic must be handled according to the
uniform set of controls set forth in 32 CFR part 2002 and the CUI
Registry.
CUI Categories means those types of information for which laws,
regulations, or Governmentwide policies require or permit agencies to
exercise safeguarding or dissemination controls, and which has been
listed in the CUI Registry.
CUI incident means unauthorized disclosure, improper modification,
improper destruction of CUI, in any form or medium, or unauthorized
access to the information system on which the CUI resides. Improper
handling of CUI (e.g., unmarked or mismarked CUI) is not a CUI incident
unless the improper handling has resulted in an unauthorized
disclosure, improper modification, or improper destruction of CUI.
CUI Registry means the online repository for all information,
guidance, policy, and requirements on handling CUI. Among other
information, the CUI Registry identifies all approved CUI categories
and subcategories, provides general descriptions for each, identifies
the basis for controls, establishes markings, and includes guidance on
handling procedures (see https://www.archives.gov/cui).
CUI Specified means the subset of CUI for which the authorizing
law, regulation, or Governmentwide policy contains specific handling
controls that it requires or permits agencies to use and that differ
from those for CUI Basic. The CUI Registry indicates which laws,
regulations, and Governmentwide policies include such specific
requirements.
Lawful Government purpose means any activity, mission, function,
operation, or endeavor that the Government authorizes or recognizes as
within the scope of its legal authorities or the legal authorities of
non-executive branch entities such as State and local law enforcement.
Limited dissemination control means any control identified on the
CUI Registry that agencies may use to limit or specify CUI
dissemination.
On behalf of an agency means a contractor uses or operates an
information system or maintains or collects information for the purpose
of processing, storing, or transmitting Federal information, and those
activities are not incidental to providing a service or product to the
Government.
Unauthorized disclosure means when an authorized holder of CUI
intentionally or unintentionally discloses, accesses, or observes CUI
without a lawful Government purpose, in violation of restrictions
imposed by safeguarding or dissemination controls, or contrary to
limited dissemination controls.
40.304-2 Authorities.
(a) Executive Order 13556 of November 4, 2010, entitled
``Controlled Unclassified Information.''
(b) 32 CFR part 2002, Controlled Classified Information (CUI).
40.304-3 Applicability.
(a) The requirements for handling CUI in this section apply when an
offeror or contractor is expected to handle CUI, including instances
when CUI resides on or transits through contractor information systems
or within contractor facilities.
(b) The CUI requirements in the clause at 52.240-7, Controlled
Unclassified Information, and SF XXX only apply when CUI will be
involved in the contract. Offerors and contractors whose performance
does not involve CUI will not be required to receive a Standard Form
XXX and will not be subject to the requirements of FAR 52.240-6 or
52.240-7.
40.304-4 Policy.
(a) The requiring activity will identify any CUI in the SF XXX,
Controlled Unclassified Information (CUI) Requirements, which must be
incorporated in the contract. Contractors are required to safeguard
only the CUI that is identified in the SF XXX. However, see 52.240-
7(c).
(b) Applicable CUI requirements can be waived by the Government in
accordance with 32 CFR 2002.38.
40.304-5 Procedures.
(a) For each requirement, except those exclusively for the
acquisition of commercially available off-the-shelf items, the
contracting officer must obtain from the requiring activity an SF XXX
that--
(1) Identifies what CUI is involved in the contract; and
(2) Specifies if and how the contractor is to identify and mark CUI
involved in the contract (e.g., when the contractor is generating or
developing the CUI, or when the purpose of the contract is to mark
CUI).
(b)(1) If the contracting officer has a reason to question the
information on the SF XXX, the contracting officer must request that
the requiring activity verify that the SF XXX is accurate.
(2) If the requiring activity has marked the ``Yes'' box in Part A
of SF XXX, the contracting officer must incorporate the SF in the
solicitation and contract and the clause at 52.240-7, as prescribed at
40.304-6, to communicate requirements for handling CUI during contract
performance.
(3) If the requiring activity has marked the ``No'' box in Part A
of SF XXX, the contracting officer must include in the contract file a
copy of the SF XXX.
(c) If the requiring activity states that there should be
controlled access to the contents of the SF XXX or the SF XXX is marked
as CUI itself, contracting officers must follow agency procedures for
handling the SF XXX.
(d) If the contracting officer is notified or otherwise discovers
that there is, or potentially could be CUI involved in the contract and
it was not properly identified on an SF XXX, the contracting officer
must coordinate with the requiring activity to determine if the
information is CUI. If the agency determines that the information is
CUI, then the agency must take the following steps:
(1) If the agency wants the contractor to handle this kind of CUI
during performance of the contract, the contracting officer must--
(i) Coordinate with the requiring activity to have the SF XXX
updated and CUI marked;
(ii) Modify the contract to incorporate the new SF XXX and, if CUI
was not previously anticipated under the contract, to incorporate the
clause at 52.240-7; and
[[Page 37609]]
(iii) Consider any request for equitable adjustment submitted by
the contractor, as appropriate.
(2) If the agency does not want the contractor to handle this kind
of CUI, the contracting officer must coordinate with the requiring
activity to address the CUI (e.g., retrieve the CUI) and must convey
such instructions to the contractor.
(e) Refer to 3.104-4 for procedures related to the disclosure,
protection, and marking of contractor proprietary business information,
contractor bid or proposal information, and source selection
information submitted to the Government.
(f)(1) Follow agency procedures when providing any CUI to an
offeror to ensure offeror compliance with the requirements in 32 CFR
part 2002.
(2) Follow any applicable agency procedures for validating
contractor compliance with the requirements of the clause at 52.240-7.
(g) If the contracting officer is provided a disclosure in
accordance with 52.240-6(d), the contracting officer must follow agency
procedures to determine if a waiver may be granted.
40.304-6 CUI incident reports.
(a) Agencies must protect against the improper use or release of
information that includes contractor proprietary business information
or contractor-attributional information to the extent required by law.
(b) Upon notification of a CUI incident at a non-Federally-
controlled facility, the contracting officer must notify the requiring
activity of the CUI incident as soon as practicable and in accordance
with agency procedures. If the CUI incident occurs on an order against
an indefinite delivery contract, the ordering agency contracting
officer must notify the contracting officer for the indefinite delivery
contract.
(c) When the contractor is required to provide information system
images preserved under the requirements of paragraph (g)(4) of the
clause at 52.240-7, in accordance with agency procedures, the
contracting officer must provide instructions to the contractor for
submitting the system images. The contractor is required to hold the
system images for 90 days unless the Government declines interest.
(d)(1) The contracting officer must not interpret a contractor's
report of a CUI incident to mean that the contractor or a subcontractor
at any tier failed to provide adequate safeguards for CUI or otherwise
failed to meet the requirements of the clause at 52.240-7, without an
investigation resulting in determinations and findings by the agency.
(2) When a CUI incident is reported, the contracting officer must
consult with appropriate agency personnel (e.g., program office or
requiring activity) before taking any action under the contract related
to the CUI incident. When the contract includes the clause at 52.240-7,
the contracting officer must consider such CUI incidents in the context
of an overall assessment of the contractor's compliance with the
requirements of the clause at 52.240-7.
(3) The contracting officer must consult with the appropriate
agency personnel concerning any unmarked or mismarked CUI in accordance
with agency procedures if they are notified by the contractor--
(i) There is potential unmarked or mismarked CUI; or
(ii) The contractor is not able to comply with one of the
requirements in the clause at 52.240-7 due to conflict with another law
or regulation.
40.304-7 Solicitation provision and contract clause.
(a) Insert the provision at 52.240-6, Notice of Controlled
Unclassified Information Requirements, in solicitations that contain
the clause at 52.240-7.
(b) Except for solicitations and contracts solely for the
acquisition of commercially available off-the-shelf items, insert the
clause at 52.240-7, Controlled Unclassified Information, and include an
SF XXX Controlled Unclassified Information (CUI) Requirements, in
solicitations and contracts if the requiring activity has marked the
``Yes'' box in Part A of the SF XXX.
Note: The following form, Controlled Unclassified Information
(CUI), will not be published in the CFR.
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BILLING CODE 6820-EP-C
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
2. The authority citation for 48 CFR part 52 continues to read as
follows:
Authority: 41 U.S.C. 1121(b); 40 U.S.C. 121(c); 10 U.S.C.
chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C.
3016); and 51 U.S.C. 20113.
52.000 [Removed and Reserved]
0
3. Remove and reserve section 52.000.
0
4. Revise subpart 52.1 to read as follows:
Subpart 52.1--Instructions for Using Provisions and Clauses
Sec.
52.100 Scope of subpart.
52.101 Using Part 52.
52.102 [Reserved]
52.103 Identification of provisions and clauses.
52.104 Procedures for modifying and completing provisions and
clauses.
52.105 Procedures for using alternates.
52.106 [Reserved]
52.107 Provisions and clauses prescribed in subpart 52.1.
52.100 Scope of subpart.
This subpart--
[[Page 37616]]
(a) Explains how to use part 52, including provision and clause
numbers, prescriptions, and the Smart Matrix; and
(b) Describes procedures for incorporating, identifying, and
modifying provisions and clauses in solicitations and contracts, and
for using alternates.
52.101 Using Part 52.
(a) Prescriptions. Each provision or clause in subpart 52.X is
prescribed in corresponding FAR text where the topic is addressed. The
prescription includes all conditions, requirements, and instructions
for using the provision or clause and its alternates, if any.
(b) Smart Matrix. Find the provision and clause selection tool at
https://www.acquisition.gov/smart-matrix.
(c) Dates. All provisions, clauses, and alternates must be dated to
avoid ambiguity, e.g., (Feb. 2026).
52.102 [Reserved]
52.103 Identification of provisions and clauses.
(a) Standard identification. Provisions and clauses used without
deviation, must be identified by number, title, and date. Deviations
should themselves also have a date. Add ``(DEVIATION (DATE))'' after
the provision or clause date, when using an authorized deviation.
(b) Agency supplements. Provisions or clauses that supplement the
FAR must also be clearly identified by number, title, date, and name of
the regulation. Deviations should themselves also have a date. Add
``(DEVIATION (DATE))'' after the provision or clause date, when using
an authorized deviation.
(c) Local/sub-agency level supplements. Use number, title, date,
and the name of the agency or suborganization within the agency that
developed it.
52.104 Procedures for modifying and completing provisions and clauses.
Only make authorized changes. Do not modify provisions and clauses
unless the FAR specifically authorizes or requires the modification.
For example--
(a) ``The contracting officer may use a period shorter than 60 days
(but not less than 30 days) in paragraph (x) of the clause''; or
(b) ``The contracting officer may substitute the words `task order'
for the word `Schedule' wherever that word appears in the clause.'' or
(c) ``The patent number is __ [Contracting Officer fill in], and
the royalty rate is __ [Contracting Officer fill in].''
52.105 Procedures for using alternates.
(a) The FAR provides different versions of provisions and clauses
called ``alternates'' when needed for different situations. They are
titled ``Alternate I,'' ``Alternate II,'' etc.
(b) When an alternate is used, its date must be cited along with
the date of the basic provision or clause, e.g., 52.209-3 First Article
Approval-Contractor Testing (Oct 1983)-Alternate I (Dec 1983).
(c) Under certain circumstances, a provision or clause may be used
with two or more alternates. In these circumstances, each of the
applicable alternates must be cited, e.g., 52.209-3 First Article
Approval-Contractor Testing (Oct 1983)-Alternate I (Dec 1983) and
Alternate II (Feb 1984). Never use an alternate to a specific provision
or clause with a different provision or clause.
52.106 [Reserved]
52.107 Provisions and clauses prescribed in subpart 52.1.
(a) Insert the provision at 52.252-3, Alterations in Solicitation,
in solicitations, including those for commercial products and
commercial services, in order to revise or supplement, as necessary,
other parts of the solicitation that apply to the solicitation phase
only, except for any provision authorized for use with a deviation.
Include clear identification of what is being altered.
(b) Insert the clause at 52.252-4, Alterations in Contract, in
solicitations and contracts, including those for commercial products
and commercial services, in order to revise or supplement, as
necessary, other parts of the contract, or parts of the solicitations
that apply to the contract phase, except for any clause authorized for
use with a deviation. Include clear identification of what is being
altered.
(c) Insert the provision at 52.252-5, Authorized Deviations in
Provisions, in solicitations, including those for commercial products
and commercial services, that include any FAR or supplemental provision
with an authorized deviation.
(d) Insert the clause at 52.252-6, Authorized Deviations in
Clauses, in solicitations and contracts, including those for commercial
products and commercial services, that include any FAR or supplemental
clause with an authorized deviation.
0
5. Revise section 52.200 to read as follows:
52.200 Scope of subpart.
This subpart sets forth the text of all FAR provisions and clauses
and gives a cross-reference to the location in the FAR that prescribes
the provision or clause.
52.201-1 [Removed and Reserved]
0
6. Remove and reserve section 52.201-1.
0
7. Add section 52.201-2 to read as follows:
52.201-2 Computer Generated Forms.
As prescribed in 1.605, insert the following clause:
Computer Generated Forms (DATE)
(a) Any data required to be submitted on a Standard or Optional
Form may be submitted on a computer generated version of the form,
provided there is no change to the name, content, or sequence of the
data elements on the form, and provided the form carries the Standard
or Optional Form number and edition date.
(b) Unless prohibited by agency regulations, any data required to
be submitted on an agency unique form prescribed by an agency
supplement to the FAR may be submitted on a computer generated version
of the form provided there is no change to the name, content, or
sequence of the data elements on the form and provided the form carries
the agency form number and edition date.
(c) If the Contractor submits a computer generated version of a
form that is different from the required form, then the rights and
obligations of the parties will be determined based on the content of
the required form.
(End of clause)
0
8. Revise section 52.202-1 to read as follows:
52.202-1 Definitions.
As prescribed in 2.201, insert the following clause:
Definitions (DATE)
When a solicitation provision or contract clause uses a word or
term that is defined in the Federal Acquisition Regulation (FAR), the
word or term has the same meaning as the definition in FAR 2.101 in
effect at the time the solicitation was issued, unless--
(a) The solicitation, or amended solicitation, provides a different
definition;
(b) The contracting parties agree to a different definition;
(c) The part, subpart, or section of the FAR where the provision or
clause is prescribed provides a different meaning;
(d) The word or term is defined in FAR part 31, for use in the cost
principles and procedures; or
(e) The word or term defines an acquisition-related threshold, and
if the
[[Page 37617]]
threshold is adjusted for inflation as set forth in FAR 1.108, then the
changed threshold applies throughout the remaining term of the
contract, unless there is a subsequent threshold adjustment; see FAR
1.108.
(End of clause)
52.204-1 through 52.204-4 [Removed and Reserved]
0
9. Remove and reserve sections 52.204-1 through 52.204-4.
0
10. Revise section 52.204-5 to read as follows:
52.204-5 Women-Owned Business (Other Than Small Business).
As prescribed in 4.208(a), insert the following provision:
Women-Owned Business (Other Than Small Business) (DATE)
(a) Definition. Women-owned business concern, as used in this
provision, means a concern that is at least 51 percent owned by one or
more women; or in the case of any publicly owned business, at least 51
percent of its stock is owned by one or more women; and whose
management and daily business operations are controlled by one or more
women.
(b) Representation. [Complete only if the offeror is a women-owned
business concern and has not represented itself as a small business
concern in paragraph (c)(1) of FAR 52.219-1, Small Business Program
Representations, of this solicitation.] The offeror represents that it
[ballot] is a women-owned business concern.
(End of provision)
52.204-6 [Removed and Reserved]
0
11. Remove and reserve section 52.204-6.
0
12. Revise section 52.204-7 to read as follows:
52.204-7 System for Award Management--Registration.
As prescribed in 4.208(b)(1), insert the following provision:
System for Award Management--Registration (DATE)
The Offeror must have an active Federal Government contracts
registration in the System for Award Management (SAM) when submitting
an offer or quotation in response to this solicitation and at the time
of award. As part of the SAM registration process, the Government
collects information, as described in paragraphs (b) through (d) of
this provision, that is necessary to identify the Offeror and for the
Offeror to be awarded Federal Government contracts. To register in SAM,
go to https://www.sam.gov. Allow for processing time when registering
in SAM. If the Offeror is not registered in SAM, it should register
immediately after receiving this solicitation.
(a) Definitions. As used in this provision--
Commercial and Government Entity (CAGE) code has the meaning
provided in the clause at the Federal Acquisition Regulation (FAR)
52.204-13, System for Award Management--Maintenance, of this
solicitation.
Electronic Funds Transfer (EFT) indicator means a bank account
identifier to establish additional System for Award Management records
for identifying alternative EFT accounts (see FAR part 32) for the same
entity.
Highest-level owner means the entity that owns or controls an
immediate owner of the offeror, or that owns or controls one or more
entities that control an immediate owner of the offeror. No entity owns
or exercises control of the highest-level owner.
Immediate owner means an entity, other than the offeror, that has
direct control of the offeror. Indicators of control include, but are
not limited to, one or more of the following: ownership or interlocking
management, identity of interests among family members, shared
facilities and equipment, and the common use of employees. There may be
more than one immediate owner (e.g., joint ventures).
Predecessor means an entity whose assets were acquired by the
offeror or another entity (most often through merger or acquisition)
and whose affairs are now carried out by the offeror or the other
entity under a new name.
Taxpayer identification number means the number required by the
Internal Revenue Service (IRS) to be used by the offeror to report
income tax and other returns. It may be either a Social Security Number
or an Employer Identification Number.
Unique entity identifier (UEI) has the meaning provided in the
clause at FAR 52.204-13, System for Award Management--Maintenance, of
this solicitation.
(b) Identifiers. The Offeror must obtain and provide the following
identifying information:
(1) Unique entity identifier (UEI).
(i) The Offeror must obtain a UEI to register in SAM. The
Government will independently validate the existence and uniqueness of
the Offeror before assigning a UEI to the Offeror. Go to https://www.sam.gov for instructions on obtaining a UEI.
(ii) The Offeror must enter, in the block with its name and address
on the cover page of its offer, the annotation ``Unique Entity
Identifier'' followed by the UEI that identifies the Offeror's name and
address exactly as stated in the offer. The Offeror must also enter its
EFT indicator, if applicable.
(iii) The Contracting Officer will use the UEI to verify that the
Offeror has an active Federal Government contracts registration in SAM.
(2) Taxpayer identification number (TIN). The Offeror must provide
its TIN or related information to comply with debt collection
requirements of 31 U.S.C. 7701(c) and 3325(d); reporting requirements
of 26 U.S.C. 6041, 6041A, and 6050M; and implementing regulations
issued by the IRS. The Offeror must consent for TIN validation; and
(3) Commercial and Government Entity (CAGE) code.
(i) The Offeror must provide a CAGE code and legal business name
(Do not use a ``doing business as'' name) for--
(A) Itself;
(B) Its immediate owner(s), if any;
(C) Its highest-level owner, if any; and
(D) Any predecessor(s), or predecessor of an Offeror's predecessor,
that held a Federal contract or grant within the last three years.
(ii) If the Offeror is in the United States or its outlying areas
and does not already have a CAGE code assigned, the DLA CAGE Branch
will assign a CAGE code to the Offeror as a part of the SAM
registration process. For information on obtaining a CAGE code go to
https://cage.dla.mil/.
(iii) The Offeror must get from any immediate and/or highest-level
owner(s) their respective CAGE code(s) to provide the code(s) as part
of the registration (FAR 52.204-7(b)(3)(i)).
(iv) If the Offeror is located outside of the United States or its
outlying areas, and does not already have a CAGE code assigned, the
Offeror may obtain a CAGE code as indicated in the following table.
------------------------------------------------------------------------
If the Offeror is . . . Then . . .
------------------------------------------------------------------------
Located in a country that is a member Contact the appropriate
of the North Atlantic Treaty National Codification Bureau
Organization (NATO) or a sponsored (https://www.nato.int/structur/
nation. ac/135/about/contacts).
[[Page 37618]]
Located in a country that is not a Contact the NATO Support and
member of NATO or a sponsored nation. Procurement Agency (NSPA)
(https://eportal.nspa.nato.int/AC135Public/scage/CageList.aspx).
------------------------------------------------------------------------
(c) Representations and certifications.
(1) The following FAR solicitation provisions contain entity-level
representations and certifications that the Offeror must submit as part
of their Federal Government contracts registration in SAM:
------------------------------------------------------------------------
Provision Title Date
------------------------------------------------------------------------
52.204-5...................... Women-Owned Business DATE.
(Other Than Small
Business).
52.209-2...................... Prohibition on DATE.
Contracting with
Inverted Domestic
Corporations--Repres
entation.
52.209-5...................... Certification DATE.
Regarding
Responsibility
Matters.
52.209-11..................... Representation by DATE.
Corporations
Regarding Delinquent
Tax Liability or a
Felony Conviction
under any Federal
Law.
52.219-1...................... Small Business DATE.
Program
Representations.
52.219-1 Alt I................ Small Business DATE.
Program
Representations,
with its Alternate I.
52.219-1 Alt II............... Small Business DATE.
Program
Representations,
with its Alternate
II.
52.226-2...................... Historically Black DATE.
College or
University and
Minority Institution
Representation.
------------------------------------------------------------------------
(2) By submitting its offer, the Offeror verifies that, as of the
date of its offer, its representations and certifications posted
electronically in SAM for the provisions listed in paragraph (c)(1) of
this provision are current, accurate, and complete. The Offeror's
representations and certifications in SAM are hereby incorporated by
reference into its offer.
(d) Other information. The Offeror must provide more information on
its business operations and type that is necessary to be considered for
award of certain contracts and financial information necessary to
receive payment under contracts.
(End of provision)
Alternate I (DATE). As prescribed in 4.208(b)(1), replace the first
sentence of the introductory paragraph of the basic provision with the
following sentences:
The Offeror must have an active Federal Government contracts
registration in the System for Award Management (SAM) as soon as
possible. If registration is not possible when submitting an offer or
quotation, the awardee must be registered in SAM according to the
requirements of the Alternate I of clause at FAR 52.204-13, System for
Award Management-Maintenance.
52.204-8 [Removed and Reserved]
0
13. Remove and reserve section 52.204-8.
0
14. Revise sections 52.204-9 and 52.204-10 to read as follows:
52.204-9 Personal Identity Verification of Contractor Personnel.
As prescribed in 4.208(d), insert the following clause:
Personal Identity Verification of Contractor Personnel (DATE)
(a) Policy. The Contractor must comply with agency personal
identity verification procedures identified in the contract that
implement Homeland Security Presidential Directive-12 (HSPD-12), Office
of Management and Budget guidance M-05-24, and Federal Information
Processing Standards Publication (FIPS PUB) Number 201.
(b) Returning identification to the Government. The Contractor must
account for all forms of Government-provided identification issued to
the Contractor employees in connection with performance under this
contract. The Contractor must return such identification to the issuing
agency at the earliest of any of the following, unless otherwise
determined by the Government:
(1) When no longer needed for contract performance.
(2) Upon completion of the Contractor employee's employment.
(3) Upon contract completion or termination.
(c) Remedy for noncompliance. The Contracting Officer may delay
final payment under a contract if the Contractor fails to comply with
these requirements.
(d) Subcontracts. The Contractor must insert the substance of this
clause, including this paragraph (d), in subcontracts, including those
for commercial products (other than commercially available off-the-
shelf items) or commercial services, when the subcontractor's employees
are required to have routine physical access to a Federally-controlled
facility and/or routine access to a Federal information system. The
prime Contractor must return its subcontractors' identifications to the
issuing agency in accordance to the terms in paragraph (b) of this
clause, unless otherwise approved in writing by the Contracting
Officer.
(End of clause)
52.204-10 Reporting Executive Compensation and First-Tier Subcontract
Awards.
As prescribed in 4.208(e), insert the following clause:
Reporting Executive Compensation and First-Tier Subcontract Awards
(DATE)
(a) Definitions. As used in this clause:
Executive means officers, managing partners, or any other employees
in management positions.
First-tier subcontract means a subcontract awarded directly by the
Contractor to acquire supplies or services (including construction),
other than those for commercial products or commercial services, for
performing a prime contract. It does not include the Contractor's
supplier agreements with vendors, such as long-term arrangements for
materials or supplies that benefit multiple contracts and/or the costs
of which are normally applied to a contractor's general and
administrative expenses or indirect costs.
Month of award means the month in which the Contracting Officer
signs a contract or the month in which the Contractor signs a first-
tier subcontract.
Total compensation means the cash and noncash dollar value earned
by the executive during the Contractor's preceding fiscal year and
includes the information described at 17 CFR 229.402(c)(2).
(b) Requirement. Section 2(d)(2) of the Federal Funding
Accountability and Transparency Act of 2006 (Pub. L. 109-282), as
amended by section 6202 of the
[[Page 37619]]
Government Funding Transparency Act of 2008 (Pub. L. 110-252), requires
the Contractor to report information on subcontract awards. The law
requires all reported information be made public; therefore, the
Contractor is responsible for notifying its subcontractors that the
required information will be made public. Nothing in this clause
requires disclosing classified information.
(c) Reporting. Unless otherwise directed by the Contracting
Officer, or as provided in paragraph (f) of this clause, the Contractor
must report the following in the System for Award Management at https://www.sam.gov as follows:
(1) Executive compensation of the prime contractor. The Contractor
must report the names and total compensation of each of the five most
highly compensated executives for its preceding completed fiscal year,
if--
(i) In the Contractor's preceding fiscal year, the Contractor
received--
(A) 80 percent or more of its annual gross revenues from Federal
contracts (and subcontracts); loans, grants (and subgrants);
cooperative agreements; and other forms of Federal financial
assistance; and
(B) $25,000,000 or more in annual gross revenues from Federal
contracts (and subcontracts); loans, grants (and subgrants);
cooperative agreements; and other forms of Federal financial
assistance; and
(ii) The public does not have access to information about the
compensation of the executives through periodic reports filed under
section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15
U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of
1986. (To determine if the public has access to the compensation
information, see the U.S. Security and Exchange Commission total
compensation filings at http://www.sec.gov/answers/execomp.htm.).
(2) First-tier subcontract information. The Contractor must report
the following information by the end of the month following the month
of award of each first-tier subcontract award:
(i) Unique entity identifier for the subcontractor receiving the
award and for the subcontractor's ultimate parent company, if the
subcontractor has a parent company.
(ii) Name of the subcontractor.
(iii) Amount of the subcontract award.
(iv) Date of the subcontract award.
(v) A description of the products or services (including
construction) being provided under the subcontract, including the
overall purpose and expected outcomes or results of the subcontract.
(vi) The subcontract number assigned by the Prime Contractor.
(vii) Subcontractor's physical address.
(viii) Subcontractor's primary performance location.
(ix) The prime contract number, and order number if applicable.
(x) Awarding agency name and code.
(xi) Funding agency name and code.
(xii) Government contracting office code.
(xiii) The applicable North American Industry Classification System
code.
(3) Executive compensation of the first-tier subcontractor. The
Contractor must report by the end of the month following the month of
award of a first-tier subcontract award and annually thereafter
(calculated from the prime contract award date) the names and total
compensation of each of the five most highly compensated executives for
that subcontractor in the subcontractor's preceding completed fiscal
year, if--
(i) In the subcontractor's preceding fiscal year, the subcontractor
received--
(A) 80 percent or more of its annual gross revenues from Federal
contracts (and subcontracts); loans, grants (and subgrants);
cooperative agreements; and other forms of Federal financial
assistance; and
(B) $25,000,000 or more in annual gross revenues from Federal
contracts (and subcontracts); loans, grants (and subgrants);
cooperative agreements; and other forms of Federal financial
assistance; and
(ii) The public does not have access to information about the
compensation of the executives through periodic reports filed under
section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15
U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of
1986 (see http://www.sec.gov/answers/execomp.htm).
(d) Restriction. The Contractor must not split or break down
subcontracts to a value below the threshold at the Federal Acquisition
Regulation 4.208(e), on the date of subcontract award, to avoid the
reporting requirements in paragraph (c) of this clause.
(e) Duration. Continued reporting on first-tier subcontracts is not
required unless one of the reported data elements changes during the
performance of the subcontract. The Contractor is not required to make
further reports after a first-tier subcontract expires.
(f) Exceptions.
(1) If the Contractor in the previous tax year had gross income
from all sources under $300,000, the Contractor is exempt from the
requirement to report subcontractor awards.
(2) If a subcontractor in the previous tax year had gross income
from all sources under $300,000, the Contractor does not need to report
awards for that subcontractor.
(g) Prepopulated data. The SAM Subaward Reporting will prepopulate
with some information from the SAM Contract Awards Management. If the
SAM Contract Awards Management information is incorrect, the Contractor
should notify the Contracting Officer. If the SAM information is
incorrect, the Contractor is responsible for correcting this
information.
(End of clause)
52.204-12 [Removed and Reserved]
0
15. Remove and reserve section 52.204-12.
0
16. Revise sections 52.204-13 through 52.204-15 to read as follows:
52.204-13 System for Award Management--Maintenance.
As prescribed in 4.208(b)(2), use the following clause:
System for Award Management Maintenance (DATE)
(a) Definitions. As used in this clause--
Commercial and Government Entity code means--
(1) An identifier assigned to entities located in the United States
or its outlying areas by the Defense Logistics Agency (DLA) Commercial
and Government Entity (CAGE) Branch to identify a commercial or
government entity by unique location (referred to as ``CAGE code''); or
(2) An identifier assigned by a member of the North Atlantic Treaty
Organization (NATO) or by the NATO Support and Procurement Agency to
entities located outside the United States and its outlying areas that
the DLA CAGE Branch records and maintains in the CAGE master file
(referred to as ``NCAGE code'').
Unique Entity Identifier (UEI) means an identifier used to identify
a specific commercial, nonprofit, or Government entity.
(b) Active registration.
(1) The Contractor must maintain an active Federal Government
contracts registration in the System for Award Management (SAM) at
https://www.sam.gov during contract performance and through final
payment under this contract. To maintain an active registration in SAM,
the Contractor must review at least annually its registration in SAM
and validate that the information is current, accurate, and complete.
(2) The Contractor is responsible for the currency, accuracy, and
completeness of the information
[[Page 37620]]
provided within SAM, and for any liability resulting from the
Government's reliance on inaccurate or incomplete information. Updating
SAM does not alter the terms and conditions of this contract and is not
a substitute for a properly executed contractual document.
(c) Novation and change-of-name agreements.
(1) If the Contractor has legally changed its business name or
``doing business as'' name (whichever is shown on the contract), or has
transferred the assets used to perform the contract, but has not
completed the necessary requirements regarding novation and change-of-
name agreements in part 42 of the Federal Acquisition Regulation (FAR),
the Contractor must provide the responsible Contracting Officer a
minimum of one business day's written notification of its intention to
--
(i) Change the legal business name in SAM;
(ii) Comply with the requirements of FAR part 42; and
(iii) Agree in writing to the timeline and procedures specified by
the responsible Contracting Officer. The Contractor must provide with
its written notification sufficient documentation to support the
legally changed name.
(2) If the Contractor fails to comply with the requirements of
paragraph (c)(1) of this clause, or fails to perform the agreement at
paragraph (c)(1)(iii) of this clause, and, in the absence of a properly
executed novation or change-of-name agreement, the SAM information that
shows the Contractor to be other than the Contractor indicated in the
contract will be considered to be incorrect information within the
meaning of the ``Suspension of Payment'' paragraph of the electronic
funds transfer (EFT) clause of this contract.
(d) Assignees.
(1) The Contractor must not change the legal business name or
address for EFT payments or manual payments, as appropriate, in the SAM
record to reflect an assignee for the purpose of assignment of claims
(see FAR part 32). Assignees must be separately registered in SAM.
(2) Information provided to the Contractor's SAM record that
indicates payments, including those made by EFT, to an ultimate
recipient other than that Contractor will be incorrect information
within the meaning of the ``Suspension of Payment'' paragraph of the
EFT clause of this contract.
(e) Unique entity identifier (UEI). The Contractor must ensure that
its UEI is maintained throughout the life of the contract.
(f) Commercial and Government Entity (CAGE) code. The Contractor
must ensure that the CAGE code is maintained throughout the life of the
contract. To update a CAGE code, the Contractor must initiate the
change by updating its SAM registration.
(g) Communicating changes. The Contractor must communicate any
change to its UEI or CAGE code to the Contracting Officer within 30
days after the change, so a modification can be issued to update the
UEI or CAGE code on this contract. A change in the UEI does not
necessarily require a novation.
(End of clause)
Alternate I (DATE). As prescribed in 4.208(b)(2), replace paragraph
(b) of the basic clause with the following paragraph (b):
(b) Active registration.
(1) If the Contractor was unable to register for Federal Government
contracts in the System for Award Management (SAM) at https://www.sam.gov before award, the Contractor must register in SAM within 30
days after contract award or at least three days before submitting the
first invoice, whichever occurs first.
(2) The Contractor must maintain an active Federal Government
contracts registration in SAM during contract performance and through
final payment under this contract. To maintain an active registration
in SAM, the Contractor must review at least annually its registration
in SAM and validate that the information is current, accurate, and
complete.
(3) The Contractor is responsible for the currency, accuracy, and
completeness of the information provided within SAM, and for any
liability resulting from the Government's reliance on inaccurate or
incomplete information. Updating SAM does not alter the terms and
conditions of this contract and is not a substitute for a properly
executed contractual document.
52.204-14 Service Contract Reporting Requirements.
As prescribed in 4.208(f)(2), insert the following clause:
Service Contract Reporting Requirements (DATE)
(a) Definition. As used in this clause--
First-tier subcontract means a subcontract awarded directly by the
Contractor to acquire supplies or services (including construction),
other than those for commercial products or commercial services, for
performing a prime contract. It does not include the Contractor's
supplier agreements with vendors, such as long-term arrangements for
materials or supplies that benefit multiple contracts and/or the costs
of which are normally applied to a contractor's general and
administrative expenses or indirect costs.
(b) Requirement. The Contractor must report, according to
paragraphs (c) and (d) of this clause, annually by October 31, for
services performed under this contract during the preceding Government
fiscal year (October 1-September 30).
(c) Report elements. The Contractor must report the following
information:
(1) Contract number and, as applicable, order number.
(2) The total dollar amount invoiced for services performed during
the previous Government fiscal year under the contract.
(3) The number of Contractor direct labor hours expended on the
services performed during the previous Government fiscal year.
(4) Data reported by subcontractors under paragraph (f) of this
clause.
(d) Remedies. The Contractor must submit the information required
in paragraph (c) of this clause in the System for Award Management
(SAM) at https://www.sam.gov (see SAM User Guide). If the Contractor
fails to submit the report in a timely manner, the Contracting Officer
will exercise appropriate contractual remedies. In addition, the
Contracting Officer will make the Contractor's failure to comply with
the reporting requirements a part of the Contractor's performance
information under the Federal Acquisition Regulation (FAR) part 42.
(e) Review. Agencies will review Contractor-reported information
for reasonableness and consistency with available contract information.
If the agency believes that revisions to the Contractor's reported
information are warranted, the agency will notify the Contractor. The
Contractor must revise the report, or put its reason in writing for the
agency.
(f) Subcontracts.
(1) The Contractor must require each first-tier subcontractor with
first-tier subcontract(s) each valued at or more than the thresholds at
FAR 4.304(b), to provide the following detailed information to the
Contractor in sufficient time to submit the report:
(i) Subcontract number (including subcontractor name and unique
entity identifier); and
(ii) The number of first-tier subcontractor direct-labor hours
expended on the services performed during the previous Government
fiscal year.
[[Page 37621]]
(2) The Contractor must tell the subcontractor that the information
will be made available to the public as required by section 743 of
Division C of the Consolidated Appropriations Act, 2010.
(End of clause)
52.204-15 Service Contract Reporting Requirements for Indefinite-
Delivery Contracts.
As prescribed in 4.208(f)(3), insert the following clause:
Service Contract Reporting Requirements for Indefinite-Delivery
Contracts (DATE)
(a) Definition. As used in this clause--
First-tier subcontract means a subcontract awarded directly by the
Contractor to acquire supplies or services (including construction),
other than those for commercial products or commercial services, for
performing a prime contract. It does not include the Contractor's
supplier agreements with vendors, such as long-term arrangements for
materials or supplies that benefit multiple contracts and/or the costs
of which are normally applied to a contractor's general and
administrative expenses or indirect costs.
(b) Requirement. The Contractor must report, according to
paragraphs (c) and (d) of this clause, annually by October 31, for
services performed during the preceding Government fiscal year (October
1-September 30) under this contract for orders that exceed the
thresholds established in FAR 4.304(b).
(c) Report elements. The Contractor must report the following
information:
(1) Contract number and order number.
(2) The total dollar amount invoiced for services performed during
the previous Government fiscal year under the order.
(3) The number of Contractor direct labor hours expended on the
services performed during the previous Government fiscal year.
(4) Data reported by subcontractors under paragraph (f) of this
clause.
(d) Remedies. The Contractor must submit the information required
in paragraph (c) of this clause in the System for Award Management
(SAM) at https://www.sam.gov (see SAM User Guide). If the Contractor
fails to submit the report in a timely manner, the Contracting Officer
will exercise appropriate contractual remedies. In addition, the
Contracting Officer will make the Contractor's failure to comply with
the reporting requirements a part of the Contractor's performance
information under the Federal Acquisition Regulation (FAR) part 42.
(e) Review. Agencies will review Contractor-reported information
for reasonableness and consistency with available contract information.
If the agency believes that revisions to the Contractor's reported
information are warranted, the agency will notify the Contractor. The
Contractor must revise the report, or put its reason in writing for the
agency.
(f) Subcontracts.
(1) The Contractor must require each first-tier subcontractor with
first-tier subcontract(s) each valued at or more than the thresholds at
FAR 4.304(b), to provide the following detailed information to the
Contractor in sufficient time to submit the report:
(i) Subcontract number (including subcontractor name and unique
entity identifier); and
(ii) The number of first-tier subcontractor direct-labor hours
expended on the services performed during the previous Government
fiscal year.
(2) The Contractor must tell the subcontractor that the information
will be made available to the public as required by section 743 of
Division C of the Consolidated Appropriations Act, 2010.
(End of clause)
52.204-16 through 52.204-18 [Removed and Reserved]
0
17. Remove and reserve sections 52.204-16 through 52.204-18.
0
18. Revise section 52.204-19 to read as follows:
52.204-19 Incorporation by Reference of Representations and
Certifications.
As prescribed in 4.208(g), insert the following clause:
Incorporation by Reference of Representations and Certifications (DATE)
The Contractor's representations and certifications, including
those completed electronically via the System for Award Management
(SAM), are incorporated by reference into the contract.
(End of clause)
52.204-20 through 52.204-30 [Removed and Reserved]
0
19. Remove and reserve sections 52.204-20 through 52.204-30.
0
20. Add sections 52.204-XX and 52.204-YY to read as follows:
52.204-XX Offeror Identification.
As prescribed in 4.208(c)(1), insert the following provision:
Offeror Identification (DATE)
If the Offeror will not have an active Federal Government contracts
registration in the System for Award Management (https://www.sam.gov)
when submitting its offer, it must complete paragraphs (c) and (d) of
this provision and include its responses with its offer.
(a) Definitions. As used in this provision--
Commercial and Government Entity (CAGE) code has the meaning
provided in the clause at the Federal Acquisition Regulation (FAR)
52.204-YY, Contractor Identification, of this solicitation.
Common parent means that corporate entity that owns or controls an
affiliated group of corporations that files its Federal income tax
returns on a consolidated basis, and of which the offeror is a member.
Electronic Funds Transfer (EFT) indicator means a bank account
identifier to establish additional System for Award Management records
for identifying alternative EFT accounts (see FAR part 32) for the same
entity.
Highest-level owner means the entity that owns or controls an
immediate owner of the offeror, or that owns or controls one or more
entities that control an immediate owner of the offeror. No entity owns
or exercises control of the highest-level owner.
Immediate owner means an entity, other than the offeror, that has
direct control of the offeror. Indicators of control include, but are
not limited to, one or more of the following: ownership or interlocking
management, identity of interests among family members, shared
facilities and equipment, and the common use of employees. There may be
more than one immediate owner (e.g., joint ventures).
Predecessor means an entity whose assets were acquired by the
offeror or another entity (most often through merger or acquisition)
and whose affairs are now carried out by the offeror or the other
entity under a new name.
Taxpayer Identification Number means the number required by the
Internal Revenue Service (IRS) to be used by the offeror to report
income tax and other returns. It may be either a Social Security Number
or an Employer Identification Number.
Unique entity identifier (UEI) has the meaning provided in the
clause at FAR 52.204-YY, Contractor Identification, of this
solicitation.
(b) Unique entity identifier (UEI).
(1) The Offeror must enter, in the block with its name and address
on the cover page of its offer, the annotation ``Unique Entity
Identifier'' followed by
[[Page 37622]]
the UEI that identifies the Offeror's name and address exactly as
stated in the offer. The Offeror must also enter its EFT indicator, if
applicable.
(2) If the Offeror does not have a UEI, it must go to https://www.sam.gov to obtain one. The Government will independently validate
the existence and uniqueness of the Offeror before assigning a UEI.
(c) Taxpayer identification. The Offeror must provide with its
offer the following information that is necessary to comply with debt
collection requirements of 31 U.S.C. 7701(c) and 3325(d); reporting
requirements of 26 U.S.C. 6041, 6041A, and 6050M; and the implementing
IRS regulations:
(1) Taxpayer identification number (TIN).
[square] TIN: ___;
[square] TIN has been applied for; or
[square] TIN is not required because:
[square] Offeror is a nonresident alien, foreign corporation, or
foreign partnership that does not have income effectively connected
with the conduct of a trade or business in the United States and does
not have an office or place of business or a fiscal paying agent in the
United States;
[square] Offeror is an agency or instrumentality of a foreign
government; or
[square] Offeror is an agency or instrumentality of the Federal
Government.
(2) Type of organization.
[square] Sole proprietorship;
[square] Partnership;
[square] Corporate entity (not tax-exempt);
[square] Corporate entity (tax-exempt);
[square] Government entity (Federal, State, or local);
[square] Foreign government;
[square] International organization per 26 CFR 1.6049-4; or
[square] Other.
(3) Common parent.
[square] Offeror is not owned or controlled by a common parent as
defined in paragraph (a) of this provision; or
[square] Name and TIN of common parent:
Name: ___
TIN: ___
(4) The TIN provided in paragraph (c)(1) of this provision may be
matched with IRS records to verify the accuracy of the Offeror's TIN.
The Government may use the TIN to collect and report on any delinquent
amounts arising out of the Offeror's relationship with the Government
(31 U.S.C. 7701(c)(3)).
(d) Commercial and Government Entity (CAGE) code.
(1) The Offeror must provide its CAGE code with its offer with its
name and location address or otherwise include it prominently in its
offer. The CAGE code must be for that name and location address. Insert
the word ``CAGE'' before the code. The Offeror may obtain a CAGE code
as indicated in the following table.
------------------------------------------------------------------------
If the Offeror is . . . Then . . .
------------------------------------------------------------------------
Located in the United States or its Submit a request to the DLA
outlying areas. CAGE Branch via https://cage.dla.mil.
Located outside the United States and Contact the appropriate
its outlying areas and its country is National Codification Bureau
a member of the North Atlantic Treaty (https://www.nato.int/structur/
Organization (NATO) or a sponsored ac/135/about/contacts).
nation.
Located outside the United States and Contact the NATO Support and
its outlying areas and its country is Procurement Agency (NSPA)
not a member of NATO or a sponsored (https://eportal.nspa.nato.int/
nation. AC135Public/scage/
CageList.aspx).
------------------------------------------------------------------------
(2) The Offeror must provide the CAGE code and legal business name
(Do not use a ``doing business as'' name) for--
(i) Its immediate owner(s), if any;
(ii) Its highest-level owner, if any; and
(iii) Any predecessor(s), or predecessor of an Offeror's
predecessor, that held a Federal contract or grant within the last
three years.
------------------------------------------------------------------------
Legal business
Owner type CAGE code name
------------------------------------------------------------------------
Immediate owner.................
Highest-level owner.............
Predecessor *...................
------------------------------------------------------------------------
* Predecessor CAGE code may be marked ``Unknown.''
(3) If the Offeror has more than one immediate owner (such as a
joint venture), give the information for each owner (or joint venture
participant). If the Offeror has more than one predecessor, provide
information for each predecessor in reverse chronological order.
(End of provision)
52.204-YY Contractor Identification.
As prescribed in 4.208(c)(2), insert the following clause:
Contractor Identification (DATE)
(a) Definitions. As used in this clause--
Commercial and Government Entity code means--
(1) An identifier assigned to entities located in the United States
or its outlying areas by the Defense Logistics Agency (DLA) Commercial
and Government Entity (CAGE) Branch to identify a commercial or
government entity by unique location (referred to as ``CAGE code''); or
(2) An identifier assigned by a member of the North Atlantic Treaty
Organization (NATO) or by the NATO Support and Procurement Agency
(NSPA) to entities located outside the United States and its outlying
areas that the DLA CAGE Branch records and maintains in the CAGE master
file (referred to as ``NCAGE code'').
Unique entity identifier means an identifier used to identify a
specific commercial, nonprofit, or Government entity.
(b) Unique entity identifier (UEI). The Contractor must ensure that
its UEI is maintained throughout the life of the contract.
(c) Commercial and Government Entity (CAGE) code. The Contractor
must ensure that the CAGE code is maintained throughout the life of the
contract. The Contractor must request changes to a CAGE code as
indicated in the following table.
[[Page 37623]]
------------------------------------------------------------------------
If the Contractor is . . . Then . . .
------------------------------------------------------------------------
Registered in the System for Award Initiate the change by updating
Management (SAM). its SAM registration.
Located in the United States or its Submit a change request to the
outlying areas and is not registered DLA CAGE Branch via https://
in SAM. cage.dla.mil.
Located outside the United States and Request a change by contacting
its outlying areas and is not the appropriate National
registered in SAM. Codification Bureau (https://www.nato.int/structur/ac/135/about/contacts about/contacts) or NSPA
(https://eportal.nspa.nato.int/AC135Public/scage/CageList.aspx).
------------------------------------------------------------------------
(d) Communicating changes. The Contractor must communicate any
change to its UEI or CAGE code to the Contracting Officer within 30
days after the change, so a modification can be issued to update the
UEI or CAGE code on this contract. A change in the UEI does not
necessarily require a novation.
(End of clause)
21. Revise sections 52.233-1 through 52.233-4 to read as follows:
52.233-1 Disputes.
As prescribed in 33.206(a), insert the following clause:
Disputes (DATE)
(a) As used in this clause--
Claim means a written demand or written assertion by one of the
contracting parties seeking, as a matter of right, the payment of money
in a sum certain, the adjustment or interpretation of contract terms,
or other relief arising under or relating to this contract. However, a
written demand or written assertion by the Contractor seeking the
payment of money exceeding $100,000 is not a claim under 41 U.S.C.
chapter 71 until certified. A voucher, invoice, or other routine
request for payment that is not in dispute when submitted is not a
claim under 41 U.S.C. chapter 71. The submission may be converted to a
claim under 41 U.S.C. chapter 71, by complying with the submission and
certification requirements of this clause, if it is disputed either as
to liability or amount or is not acted upon in a reasonable time.
Defective certification means a certification that alters or
otherwise deviates from the language in paragraph (d)(2)(iii) of this
clause or which is not executed by a person authorized to bind the
contractor with respect to the claim. Failure to certify must not be
deemed to be a defective certification.
(b) This contract is subject to 41 U.S.C. chapter 71, Contract
Disputes.
(c) Except as provided in 41 U.S.C. chapter 71, all disputes
arising under or relating to this contract must be resolved under this
clause.
(d)(1) A claim by the Contractor must be made in writing and,
unless otherwise stated in this contract, submitted within 6 years
after accrual of the claim to the Contracting Officer for a written
decision. A claim by the Government against the Contractor must be
subject to a written decision by the Contracting Officer.
(2)(i) The Contractor must provide the certification specified in
paragraph (d)(2)(iii) of this clause when submitting any claim
exceeding $100,000.
(ii) The certification requirement does not apply to issues in
controversy that have not been submitted as all or part of a claim.
(iii) The certification must state as follows: ``I certify that the
claim is made in good faith; that the supporting data are accurate and
complete to the best of my knowledge and belief; that the amount
requested accurately reflects the contract adjustment for which the
Contractor believes the Government is liable; and that I am authorized
to certify the claim on behalf of the Contractor.''
(3) The certification may be executed by any person authorized to
bind the Contractor with respect to the claim.
(e) For Contractor claims of $100,000 or less, the Contracting
Officer must, if requested in writing by the Contractor, render a
decision within 60 days of the request. For Contractor-certified claims
over $100,000, the Contracting Officer must, within 60 days, decide the
claim or notify the Contractor of the date by which the decision will
be made.
(f) The Contracting Officer's decision will be final unless the
Contractor appeals or files a suit as provided in 41 U.S.C. chapter 71.
(g) If the claim by the Contractor is submitted to the Contracting
Officer or a claim by the Government is presented to the Contractor,
the parties, by mutual consent, may agree to use alternative dispute
resolution (ADR). If the Contractor refuses an offer for ADR, the
Contractor must inform the Contracting Officer, in writing, of the
Contractor's specific reasons for rejecting the offer.
(h)(1) The Government must pay interest on the amount found due and
unpaid from the date that--
(i) The Contracting Officer receives the claim (certified, if
required); or
(ii) Payment otherwise would be due, if that date is later, until
the date of payment.
(2) For claims having defective certifications, interest must be
paid from the date that the Contracting Officer initially receives the
claim. Simple interest on claims must be paid at the rate, fixed by the
Secretary of the Treasury as provided in the Act, which applies to the
period during which the Contracting Officer receives the claim and then
at the rate that applies for each 6-month period as fixed by the
Treasury Secretary while the claim is pending.
(i) The Contractor must proceed diligently with performance of this
contract, pending final resolution of any request for relief, claim,
appeal, or action arising under or relating to the contract, and comply
with any decision of the Contracting Officer.
(End of clause)
52.233-2 Service of Protest.
As prescribed in 33.107(a), insert the following provision:
Service of Protest (DATE)
(a) Protests, (as defined in FAR 33.102), that are filed directly
with an agency, and copies of any protests that are filed with the
Government Accountability Office (GAO), must be served on the
Contracting Officer identified in the solicitation by obtaining written
and dated acknowledgment of receipt from them.
(b) The copy of any protest must be received in the office
designated above within one day of filing a protest with the GAO.
(End of provision)
52.233-3 Protest After Award.
As prescribed in 33.107(b), insert the following clause:
Protest After Award (DATE)
(a) Upon receipt of a stop-work order, the Contractor must
immediately comply with its terms and take all reasonable steps to
minimize incurring costs allocable to the work covered by the order
during the period of work stoppage. After receiving the final decision
in the protest, the Contracting Officer must either--
(1) Cancel the stop-work order; or
(2) Terminate the work covered by the order as provided in the
Default, or the Termination for Convenience of the Government, clause
of this contract.
(b) If a stop-work order issued under this clause is canceled
either before or
[[Page 37624]]
after a final decision in the protest, the Contractor must resume work.
The Contracting Officer must make an equitable adjustment in the
delivery schedule or contract price, or both, and the contract must be
modified, in writing, accordingly, if--
(1) The stop-work order results in an increase in the time required
for, or in the Contractor's cost properly allocable to, the performance
of any part of this contract; and
(2) The Contractor asserts its right to an adjustment within 30
days after the end of the period of work stoppage; provided, that if
the Contracting Officer decides the facts justify the action, the
Contracting Officer may receive and act upon a proposal submitted at
any time before final payment under this contract.
(c) If a stop-work order is not canceled and the work covered by
the order is terminated for the convenience of the Government, the
Contracting Officer must allow reasonable costs resulting from the
stop-work order in arriving at the termination settlement.
(d) If a stop-work order is not canceled and the work covered by
the order is terminated for default, the Contracting Officer must
allow, by equitable adjustment or otherwise, reasonable costs resulting
from the stop-work order.
(e) The Government's rights to terminate this contract at any time
are not affected by action taken under this clause.
(f) If, as the result of the Contractor's intentional or negligent
misstatement, misrepresentation, or miscertification, a protest related
to this contract is sustained, and the Government pays costs, the
Government may require the Contractor to reimburse the Government the
amount of such costs. In addition to any other remedy available, and
pursuant to the requirements of subpart 32.6, the Government may
collect this debt by offsetting the amount against any payment due the
Contractor under any contract between the Contractor and the
Government.
(End of clause)
Alternate I (DATE). As prescribed in 33.107(b), substitute in
paragraph (a)(2) the words ``the Termination clause of this contract''
for the words ``the Default, or the Termination for Convenience of the
Government clause of this contract.'' In paragraph (b) substitute the
words ``an equitable adjustment in the delivery schedule, the estimated
cost, the fee, or a combination thereof, and in any other terms of the
contract that may be affected'' for the words ``an equitable adjustment
in the delivery schedule or contract price, or both.''
52.233-4 Applicable Law for Breach of Contract Claim.
As prescribed in 33.206(b), insert the following clause:
Applicable Law for Breach of Contract Claim (DATE)
United States law will apply to resolve any claim of breach of this
contract.
(End of clause)
52.239-1 and 52.240-1 [Removed and Reserved]
0
22. Remove and reserve sections 52.239-1 and 52.240-1.
0
23. Add sections 52.240-2, 52.240-3, 52.240-4, 52.240-5, 52.240-6, and
52.240-7 to read as follows:
52.240-2 Security Prohibitions and Exclusions--Representations and
Certifications
As prescribed in 40.205(a), insert the following provision:
Security Prohibitions and Exclusions--Representations and
Certifications (DATE)
(a) Definitions. As used in this provision--
Backhaul, covered article, covered procurement, covered procurement
action, covered telecommunications equipment or services, critical
technology, FASCSA order, Intelligence community, interconnection
arrangements, national security system, roaming, sensitive
compartmented information, sensitive compartmented information system,
source, and substantial or essential component have the meanings
provided in the clause 52.240-3, Security Prohibitions and Exclusions.
Business operations means engaging in commerce in any form,
including by acquiring, developing, maintaining, owning, selling,
possessing, leasing, or operating equipment, facilities, personnel,
products, services, personal property, real property, or any other
apparatus of business or commerce.
Marginalized populations of Sudan means--
(1) Adversely affected groups in regions authorized to receive
assistance under section 8(c) of the Darfur Peace and Accountability
Act (Pub. L. 109-344) (50 U.S.C. 1701 note); and
(2) Marginalized areas in Northern Sudan described in section 4(9)
of such Act.
Restricted business operations means business operations in Sudan
that include power production activities, mineral extraction
activities, oil-related activities, or the production of military
equipment, as those terms are defined in the Sudan Accountability and
Divestment Act of 2007 (Pub. L. 110-174). Restricted business
operations do not include business operations that the person (as that
term is defined in Section 2 of the Sudan Accountability and Divestment
Act of 2007) conducting the business can demonstrate--
(1) Are conducted under contract directly and exclusively with the
regional government of southern Sudan;
(2) Are conducted under specific authorization from the Office of
Foreign Assets Control in the Department of the Treasury, or are
expressly exempted under Federal law from the requirement to be
conducted under such authorization;
(3) Consist of providing goods or services to marginalized
populations of Sudan;
(4) Consist of providing goods or services to an internationally
recognized peacekeeping force or humanitarian organization;
(5) Consist of providing goods or services that are used only to
promote health or education; or
(6) Have been voluntarily suspended.
Sensitive technology--
(1) Means hardware, software, telecommunications equipment, or any
other technology that is to be used specifically--
(i) To restrict the free flow of unbiased information in Iran; or
(ii) To disrupt, monitor, or otherwise restrict speech of the
people of Iran; and
(2) Does not include information or informational materials the
export of which the President does not have the authority to regulate
or prohibit pursuant to section 203(b)(3) of the International
Emergency Economic Powers Act (50 U.S.C. 1702(b)(3)).
(b) Procedures.
(1) Covered telecommunications and video surveillance. The Offeror
must review the list of excluded parties in SAM at https://www.sam.gov
for entities excluded from receiving federal awards for ``covered
telecommunications equipment or services.''
(2) FASCSA Orders.
(i) The Offeror must search in SAM for the phrase ``FASCSA order''
for any covered article, or any products or services produced or
provided by a source, if there is an applicable FASCSA order described
in paragraph (e) of FAR 52.240-3, Security Prohibitions and Exclusions.
(ii) The Offeror must review the solicitation for any FASCSA orders
that are not in SAM but are effective and apply to the solicitation and
resultant contract (see FAR 40.204-1(c)(2)).
[[Page 37625]]
(iii) FASCSA orders issued after the date of solicitation do not
apply unless added by an amendment to the solicitation.
(3) Covered procurement actions.
(i) The Offeror must search SAM for the phrase ``covered
procurement action'' for any source or specified product or service
that is subject to a covered procurement action described in paragraph
(e) to determine if any products or services are prohibited.
(ii) The Offeror must review the solicitation for any source or
specified product or service that is subject to any covered procurement
action that is not in SAM but are effective and apply to the
solicitation and resultant contract (see FAR 40.204-2).
(iii) A source or specified product or service that is subject to a
covered procurement actions issued after the date of solicitation does
not apply unless added by an amendment to the solicitation.
(c) Covered telecommunications equipment or services
representations. By submission of its offer, the Offeror represents
that, after conducting a reasonable inquiry (that looks at any
information in the Offeror's possession that is accessible but does not
need to include an internal or third-party audit)--
(1) It will not provide covered telecommunications equipment or
services to the Government in the performance of any contract,
subcontract, or other contractual instrument resulting from this
solicitation, except as waived by the solicitation, or as disclosed in
paragraph (h); and
(2) It does not use covered telecommunications equipment or
services, or use any equipment, system, or service that uses covered
telecommunications equipment or services, except as waived by the
solicitation, or as disclosed in paragraph (h).
(d) FASCSA representation. By submission of this offer, the Offeror
represents that it has conducted a reasonable inquiry, and that the
offeror does not propose to provide or use in response to this
solicitation any covered article, or any products or services produced
or provided by a source, if the covered article or the source is
prohibited by an applicable FASCSA order in effect on the date the
solicitation was issued, unless excepted by the solicitation, or as
disclosed in paragraph (h). A reasonable inquiry will look at any
information in the offeror's possession that is accessible but does not
need to include an internal or third-party audit.
(e) Covered procurement action representation. By submission of
this offer, the Offeror represents that it has conducted a reasonable
inquiry, and that the Offeror does not propose to provide or use in
response to this solicitation any products or services that are
prohibited by an applicable covered procurement action in effect on the
date the solicitation was issued, except as waived by the solicitation,
or as disclosed in paragraph (h). A reasonable inquiry will look at any
information in the Offeror's possession that is accessible but does not
need to include an internal or third-party audit.
(f) Sudan certification. By submission of its offer, the Offeror
certifies, after conducting a reasonable inquiry (that looks at any
information in the offeror's possession that is accessible but does not
need to include an internal or third-party audit), that the Offeror
does not conduct any restricted business operations in Sudan.
(g) Iran representation and certifications.
(1) Except as provided in paragraph (g)(2) of this provision or if
a waiver has been granted in accordance with FAR 40.203-3, the offeror,
after conducting a reasonable inquiry (that looks at any information in
the Offeror's possession that is accessible but does not need to
include an internal or third-party audit), by submission of its offer
--
(i) Represents, to the best of its knowledge and belief, that the
Offeror does not export any sensitive technology to the government of
Iran or any entities or individuals owned or controlled by, or acting
on behalf or at the direction of, the government of Iran;
(ii) Certifies that the Offeror, or any person (as defined at
section 15 of the Iran Sanctions Act of 1996, Pub. L. 104-172, 50
U.S.C. 1701 note) owned or controlled by the offeror, does not engage
in any activities for which sanctions may be imposed under section 5 of
the Act. These sanctioned activities are in the areas of development of
the petroleum resources of Iran, production of refined petroleum
products in Iran, sale and provision of refined petroleum products to
Iran, and contributing to Iran's ability to acquire or develop certain
weapons or technologies; and
(iii) Certifies that the Offeror, and any person owned or
controlled by the offeror, does not knowingly engage in any transaction
that exceeds $15,000 with Iran's Revolutionary Guard Corps or any of
its officials, agents, or affiliates, the property and interests in
property of which are blocked pursuant to the International Emergency
Economic Powers Act (50 U.S.C. 1701 et seq.) (see OFAC's Specially
Designated Nationals and Blocked Persons List at https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx)
(2) Exception for trade agreements. The representation and
certification requirements of paragraph (g)(1) of this provision do not
apply if--
(i) This solicitation includes a trade agreements notice or
certification (e.g., 52.225-6, Trade Agreements Certificate); and
(ii) The Offeror has certified that all the offered products to be
supplied are designated country end products or designated country
construction material.
(iii) The Offeror must email questions concerning sensitive
technology to the Department of State at [email protected].
(h) Disclosure.
(1) If the Offeror is not able to represent compliance with the
prohibitions in paragraphs (c), (d), or (e) then the Offeror must
disclose to the contracting officer within 72 hours the following
information for each product or service not compliant:
(i) Contract number and order number, if applicable.
(ii) Identification of whether this disclosure relates to paragraph
(c) on covered telecommunication equipment or services, to paragraph
(d) on FASCSA orders, or paragraph (e) on covered procurement actions.
(iii) A description of the products or services that the Contractor
identifies or has reason to suspect are prohibited (include brand;
model number, such as the original equipment manufacturer (OEM) number,
manufacturer part number, or wholesaler number; and item description,
as applicable).
(iv) The entity that produced the product or service (include
entity name, UEI, CAGE code, facilities responsible for design,
fabrication, assembly, packaging, and test of the product, and whether
the entity was the OEM or a distributor (provide manufacturer codes and
distributor codes used for the product)).
(v) Description of the functionality of the product or service and
how that functionality impacts the risk to the product or service.
(vi) An explanation of any factors relevant to determining if the
product or service should be permitted by an applicable exception,
exemption, or waiver (if the offeror would like the Government to
consider a waiver or exception).
(vii) Whether alternative products or services are available that
would be compliant with the prohibition.
[[Page 37626]]
(viii) If the product or service is related to item maintenance,
include the following information on the item being maintained:
(A) Brand.
(B) Model number, OEM number, manufacturer part number, or
wholesaler number.
(C) Item description, as applicable.
(ix) Any readily available information about mitigation actions
undertaken or recommended.
(2) If the disclosure provided does not contain any of the
information required by paragraph (h)(1), and the offeror later
discovers new information that is required by paragraph (h)(1), then
the Offeror must submit a subsequent disclosure within 72 hours of
discovering the new information.
(i) Executive agency review of disclosures. The Contracting Officer
will review disclosures provided in paragraph (h) to determine if any
applicable waiver or exception may be sought. The Contracting Officer
may choose not to pursue a waiver and may instead make an award to an
Offeror that does not require a waiver.
(End of provision)
52.240-3 Security Prohibitions and Exclusions.
As prescribed in 40.205(b), insert the following clause:
Security Prohibitions and Exclusions (DATE)
(a) Definitions. As used in this clause--
American Security Drone Act-covered foreign entity means an entity
included on a list that the Federal Acquisition Security Council (FASC)
develops and maintains and publishes in SAM at https://www.sam.gov
(section 1822 of Pub. L. 118-31, 41 U.S.C. 3901 note prec.).
Backhaul means intermediate links between the core network, or
backbone network, and the small subnetworks at the edge of the network
(e.g., connecting cell phones/towers to the core telephone network).
Backhaul can be wireless (e.g., microwave) or wired (e.g., fiber optic,
coaxial cable, Ethernet).
Covered application means the social networking service TikTok or
any successor application or service developed or provided by ByteDance
Limited or an entity owned by ByteDance Limited.
Covered article, as defined in 41 U.S.C. 4713(k), means--
(1) Information technology, as defined in 40 U.S.C. 11101,
including cloud computing services of all types;
(2) Telecommunications equipment or telecommunications service, as
those terms are defined in section 3 of the Communications Act of 1934
(47 U.S.C. 153);
(3) The processing of information on a Federal or non-Federal
information system, subject to the requirements of the Controlled
Unclassified Information program (see 32 CFR part 2002); or
(4) Hardware, systems, devices, software, or services that include
embedded or incidental information technology.
Covered foreign country means The People's Republic of China.
Covered procurement, as defined at 41 U.S.C. 4713(k), means--
(1) A source selection for a covered article involving either a
performance specification, as provided in 41 U.S.C. 3306(a)(3)(B), or
an evaluation factor, as provided in 41 U.S.C. 3306(b)(1)(A), relating
to a supply chain risk, or where supply chain risk considerations are
included in the agency's determination of whether a source is a
responsible source as defined in 41 U.S.C. 113 (see part 9);
(2) The consideration of proposals for, and issuance of a task or
delivery order for, a covered article, as provided in 41 U.S.C.
4106(d)(3), where the task or delivery order contract includes a
contract clause establishing a requirement relating to a supply chain
risk;
(3) Any contract action involving a contract for a covered article
where the contract includes a clause establishing requirements relating
to a supply chain risk; or
(4) Any other procurement in a category of procurements determined
appropriate by the Federal Acquisition Regulatory Council, with the
advice of the Federal Acquisition Security Council.
Covered procurement action, as defined at 41 U.S.C. 4713(k), means
any of the following actions, if the action takes place in the course
of conducting a covered procurement:
(1) The exclusion of a source that fails to meet qualification
requirements established under 41 U.S.C. 3311 (see part 9) for the
purpose of reducing supply chain risk in the acquisition or use of
covered articles.
(2) The exclusion of a source that fails to achieve an acceptable
rating with regard to an evaluation factor providing for the
consideration of supply chain risk in the evaluation of proposals for
the award of a contract or the issuance of a task or delivery order.
(3) The determination that a source is not a responsible source as
defined in 41 U.S.C. 113 (see part 9) based on considerations of supply
chain risk.
(4) The decision to withhold consent for a contractor to
subcontract with a particular source or to direct a contractor to
exclude a particular source from consideration for a subcontract under
the contract.
Covered telecommunications equipment or services means--
(1) Telecommunications equipment produced (i.e. manufactured,
designed, developed, or licensed intellectual property) by Huawei
Technologies Company or ZTE Corporation (or any subsidiary or affiliate
of such entities);
(2) For the purpose of public safety, security of Government
facilities, physical security surveillance of critical infrastructure,
and other national security purposes, video surveillance equipment and
telecommunications equipment produced by Hytera Communications
Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua
Technology Company (or any subsidiary or affiliate of such entities);
(3) Telecommunications services or video surveillance services
provided by such entities or using such equipment; or
(4) Telecommunications equipment, telecommunications services,
video surveillance equipment, or video surveillance services produced
or provided by an entity that the Secretary of Defense, in consultation
with the Director of National Intelligence (DNI) or the Director of the
Federal Bureau of Investigation (FBI), reasonably believes to be an
entity owned or controlled (see 31 CFR 800.208) by, or otherwise
connected to, the government of a covered foreign country.
Critical technology means a technology in whose absence a system
cannot adequately operate or function.
FASC-prohibited unmanned aircraft system means an unmanned aircraft
system manufactured or assembled by an American Security Drone Act--
covered foreign entity.
FASCSA order means any of the following orders issued under the
Federal Acquisition Supply Chain Security Act (FASCSA) requiring
removing covered articles from executive agency information systems or
excluding one or more named sources or named covered articles from
executive agency procurement actions, as described in 41 CFR 201-
1.303(d) and (e):
(1) The Secretary of Homeland Security may issue FASCSA orders that
apply to civilian agencies, to the extent not covered by paragraph (2)
or (3) of this definition. This type of FASCSA order may be referred to
as a DHS FASCSA order.
(2) The Secretary of Defense may issue FASCSA orders that apply to
DoD
[[Page 37627]]
and national security systems other than sensitive compartmented
information systems. This type of FASCSA order may be referred to as a
DoD FASCSA order.
(3) DNI may issue FASCSA orders that apply to the intelligence
community and sensitive compartmented information systems, to the
extent not covered by paragraph (2) of this definition. This type of
FASCSA order may be referred to as a DNI FASCSA order.
Information technology, as defined in 40 U.S.C. 11101(6)--
(1) Means any equipment or interconnected system or subsystem of
equipment, used in the automatic acquisition, storage, analysis,
evaluation, manipulation, management, movement, control, display,
switching, interchange, transmission, or reception of data or
information by the executive agency, if the equipment is used by the
executive agency directly or is used by a contractor under a contract
with the executive agency that requires the use--
(i) Of that equipment; or
(ii) Of that equipment to a significant extent in the performance
of a service or the furnishing of a product;
(2) Includes computers, ancillary equipment (including imaging
peripherals, input, output, and storage devices necessary for security
and surveillance), peripheral equipment designed to be controlled by
the central processing unit of a computer, software, firmware and
similar procedures, services (including support services), and related
resources; but
(3) Does not include any equipment acquired by a Federal contractor
incidental to a Federal contract.
Intelligence community, as defined by 50 U.S.C. 3003(4), means the
following--
(1) The Office of the Director of National Intelligence;
(2) The Central Intelligence Agency;
(3) The National Security Agency;
(4) The Defense Intelligence Agency;
(5) The National Geospatial-Intelligence Agency;
(6) The National Reconnaissance Office;
(7) Other offices within DoD for the collection of specialized
national intelligence through reconnaissance programs;
(8) The intelligence elements of the Army, the Navy, the Air Force,
the Marine Corps, the Space Force, the Coast Guard, the Federal Bureau
of Investigation, the Drug Enforcement Administration, and the
Department of Energy;
(9) The Bureau of Intelligence and Research of the Department of
State;
(10) The Office of Intelligence and Analysis of the Department of
the Treasury;
(11) The Office of Intelligence and Analysis of the Department of
Homeland Security; or
(12) Such other elements of any department or agency as may be
designated by the President, or designated jointly by the Director of
National Intelligenceand the head of the department or agency
concerned, as an element of the intelligence community.
Interconnection arrangements means arrangements governing the
physical connection of two or more networks to allow the use of
another's network to hand off traffic where it is ultimately delivered
(e.g., connecting a customer of telephone provider A to a customer of
telephone company B) or sharing data and other information resources.
Kaspersky Lab-covered article means any hardware, software, or
service that--
(1) Is developed or provided by a Kaspersky Lab-covered entity;
(2) Includes any hardware, software, or service developed or
provided in whole or in part by a Kaspersky Lab-covered entity; or
(3) Contains components using any hardware or software developed in
whole or in part by a Kaspersky Lab-covered entity.
Kaspersky Lab-covered entity means--
(1) Kaspersky Lab;
(2) Any successor entity to Kaspersky Lab, including any change in
name, e.g., ``Kaspersky'';
(3) Any entity that controls, is controlled by, or is under common
control with Kaspersky Lab; or
(4) Any entity of which Kaspersky Lab has a majority ownership.
National security system, as defined in 44 U.S.C. 3552, means any
information system (including any telecommunications system) used or
operated by an agency or by a contractor of an agency, or other
organization on behalf of an agency--
(1) The function, operation, or use of which involves intelligence
activities; involves cryptologic activities related to national
security; involves command and control of military forces; involves
equipment that is an integral part of a weapon or weapons system; or is
critical to the direct fulfillment of military or intelligence
missions, but does not include a system that is to be used for routine
administrative and business applications (including payroll, finance,
logistics, and personnel management applications); or
(2) Is protected at all times by procedures established for
information that have been specifically authorized under criteria
established by an Executive order or an Act of Congress to be kept
classified in the interest of national defense or foreign policy.
Roaming means cellular communications services (e.g., voice, video,
data) received from a visited network when unable to connect to the
facilities of the home network either because signal coverage is too
weak, traffic is too high, or home network is not located in that
geographic area.
Sensitive compartmented information means classified information
concerning or derived from intelligence sources, methods, or analytical
processes, which is required to be handled within formal access control
systems established by the Director of National Intelligence.
Sensitive compartmented information system means a national
security system authorized to process or store sensitive compartmented
information.
Source means a non-Federal supplier, or potential supplier, of
products or services, at any tier.
System means a regularly interacting or interdependent group of
items or components forming a unified whole.
Subsidiary means an entity in which more than 50 percent of the
entity is owned directly by a parent corporation or through another
subsidiary of a parent corporation.
Substantial or essential component means any component necessary
for the proper function or performance of a piece of equipment, system,
or service. A component that is used only in connection with an
ancillary function of a piece of equipment, system, or service is not
substantial or essential.
Telecommunications equipment means equipment used to produce,
transmit, emit, or receive, or store signals, signs, writing, images,
sounds, or intelligence of any nature, by wire, cable, satellite, fiber
optics, laser, radio, or any other electronic, electric,
electromagnetic, or acoustically coupled means.
Telecommunications services means services used to produce,
transmit, emit, or receive, or store signals, signs, writing, images,
sounds, or intelligence of any nature, by wire, cable, satellite, fiber
optics, laser, radio, or any other electronic, electric,
electromagnetic, or acoustically coupled means.
Unmanned aircraft means an aircraft that is operated without the
possibility of direct human intervention from within or on the aircraft
(49 U.S.C. 44801(11)).
Unmanned aircraft system means an unmanned aircraft and associated
elements (including communication links and the components that control
the unmanned aircraft) that are required
[[Page 37628]]
for the operator to operate safely and efficiently in the national
airspace system (49 U.S.C. 44801(12)). See 41 CFR 201-1.101 for the
list of associated elements identified by the FASC.
Video surveillance equipment means equipment used to identify or
monitor activities or information through use of imaging, visual, or
audio methods.
Video surveillance services means services used to identify or
monitor activities or information through use of imaging, visual, or
audio methods.
(b) Prohibitions on providing or using specific products or
services in performance of contract. Unless a waiver or exception
applies, the Contractor is prohibited from providing any products or
services to the Government or using in the performance of the contract
any of the following:
(1) A covered application on any information technology owned or
managed by the Government, or on any information technology used or
provided by the Contractor under this contract, including equipment
provided by the Contractor's employees (section 102 of Division R of
the Consolidated Appropriations Act, 2023 (Pub. L. 117-328));
(2) A Kaspersky Lab-covered article (Section 1634 of Division A of
the National Defense Authorization Act for Fiscal Year 2018 (Pub. L.
115-91));
(3) Covered telecommunications equipment or services used as a
substantial or essential component of any system, or as critical
technology as part of any system (paragraphs (a)(1)(A) of section 889
of the John S. McCain National Defense Authorization Act for Fiscal
Year 2019 (Pub. L. 115-232)). This does not prohibit contractors from--
(i) Providing a service to the Government that connects to the
facilities of a third-party, such as backhaul, roaming, or
interconnection arrangements; or
(ii) Providing or using telecommunications equipment that does not
have the capability to route or redirect (i.e. directs or programs
equipment to make a determination of where to send) user data traffic
or cannot permit visibility (i.e. access to content in a comprehensible
form) into any user data or packets that such equipment transmits or
otherwise handles.
(c) Prohibition on unmanned aircraft systems manufactured or
assembled by American Security Drone Act--covered foreign entities.
(1) Prohibition. The Contractor is prohibited from--
(i) Delivering any FASC-prohibited unmanned aircraft system, which
includes unmanned aircraft (i.e., drones) and associated elements
(sections 1823 and 1826 of American Security Drone Act of 2023, within
the National Defense Authorization Act for Fiscal Year 2024, Pub. L.
118-31, Div. A, Title XVIII, Subtitle B, 41 U.S.C. 3901 note prec.);
(ii) On or after December 22, 2025, operating a FASC-prohibited
unmanned aircraft system in the performance of the contract (section
1824 of Pub. L. 118-31); and
(iii) On or after December 22, 2025, using Federal funds to procure
or operate a FASC-prohibited unmanned aircraft system (section 1825 of
Pub. L. 118-31).
(2) Procedures. The Contractor must search SAM for the FASC-
maintained list of American Security Drone Act--covered foreign
entities before proposing, or using in performance of the contract, any
unmanned aircraft system. Also, the Contractor must ensure any effort
or expenditure associated with a FASC-prohibited unmanned aircraft
system is consistent with a corresponding exemption, exception, or
waiver determination expressly stated in the contract.
(3) Exemptions, exceptions, and waivers. The prohibitions in
paragraph (c) of this clause do not apply where the agency has
determined an exemption, exception, or waiver applies, and the contract
indicates that such a determination has been made. See sections 1823
through 1825 and 1832 of Public Law 118-31 for statutory requirements
pertaining to exemptions, exceptions, and waivers.
(d) Prohibition on using or providing specific products or services
or conducting certain transactions regardless of connection to
contract.
(1) Certain telecommunications and video surveillance equipment,
systems, or services.
(i) Unless an applicable waiver has been issued by the Government,
the Contractor cannot use any equipment, systems, or services that uses
covered telecommunications equipment or services as a substantial or
essential component of any system, or as critical technology as part of
any system (paragraph (a)(1)(B) of section 889 of the John S. McCain
National Defense Authorization Act for Fiscal Year 2019 (Pub. L. 115-
232)). For purposes of this specific prohibition only, the following
activities are not individually considered use of covered
telecommunications equipment or services: commercial sales,
maintenance, testing services, warranty services, and employee's use of
personal equipment.
(ii) This prohibition applies to using covered telecommunications
equipment or services, regardless of whether that use is in performance
of work under a Federal contract. This does not prohibit the contractor
from using--
(A) A service that connects to the facilities of a third party,
such as backhaul, roaming, or interconnection arrangements; or
(B) Telecommunications equipment that does not have the capability
to route or redirect (i.e. directs or programs equipment to make a
determination of where to send) user data traffic or cannot permit
visibility (i.e. access to content in a comprehensible form) into any
user data or packets that such equipment transmits or otherwise
handles.
(2) Office of Foreign Assets Control restrictions.
(i) Except as authorized by OFAC in the Department of the Treasury,
the Contractor must not acquire, for use in the performance of this
contract, any supplies or services if any proclamation, Executive
order, or statute administered by OFAC, or if OFAC's implementing
regulations at 31 CFR chapter V, would prohibit such a transaction by a
person subject to the jurisdiction of the United States.
(ii) Except as authorized by OFAC, most transactions involving
Cuba, Iran, and Sudan are prohibited, as are most imports from Burma or
North Korea, into the United States or its outlying areas.
(A) For lists of entities and individuals subject to economic
sanctions, see OFAC's List of Specially Designated Nationals and
Blocked Persons at https://home.treasury.gov/policy-issues/financial-sanctions/specially-designated-nationals-and-blocked-persons-list-sdn-human-readable-lists.
(B) For more information about these restrictions, as well as
updates, see OFAC's regulations at 31 CFR chapter V and at https://home.treasury.gov/policy-issues/office-of-foreign-assets-control-sanctions-programs-and-information.
(C) To conduct electronic screens of potential parties to regulated
transactions, see the consolidated screening list at https://www.trade.gov/consolidated-screening-list, which consolidates multiple
export screening lists of the Departments of Commerce, State, and the
Treasury.
(3) Sudan prohibition. The Contractor is prohibited from conducting
any restricted business operations in Sudan in accordance with the
Sudan Accountability and Divestment Act of 2007 (Pub. L. 110-174).
(4) Iran prohibitions.
[[Page 37629]]
(i) Unless an exception applies according to paragraph (d)(4)(iii)
or the Government grants a waiver, the contractor must not engage in
certain activities or transactions relating to Iran (section 6(b)(1)(A)
of Iran Sanctions Act (50 U.S.C. 1701 note).
(ii) Unless an exception applies according to paragraph (d)(4)(iii)
or the Government grants a waiver, contractor must not export certain
sensitive technology to Iran, as determined by the President, and has
an active exclusion in SAM (22 U.S.C. 8515).
(iii) The prohibition in paragraphs (d)(4)(i) and (d)(4)(ii) do not
apply if the acquisition is subject to trade agreements and the offeror
certifies that all the offered products are designated country end
products or designated country construction material (see part 25).
(iv) Unless an exception applies or the Government grants a waiver,
contractors are prohibited from knowingly engaging in any significant
transaction (i.e., over $15,000) with Iran's Revolutionary Guard Corps
or any of its officials, agents, or affiliates, the property and
interests in property of which are blocked according to the
International Emergency Economic Powers Act (section 6(b)(1)(B) of Iran
Sanctions Act (50 U.S.C. 1701 note)).
(e) Governmentwide exclusion and removal orders.
(1) Unless the Government has issued an applicable waiver,
contractors must not provide or use as part of the performance of the
contract any covered article, or any products or services produced or
provided by a source, if the covered article or the source is
prohibited by an applicable FASCSA order as follows:
(i) For solicitations and contracts awarded by a Department of
Defense contracting office, DoD FASCSA orders apply.
(ii) For all other solicitations and contracts, DHS FASCSA orders
apply.
(2) The Contractor must search for the phrase ``FASCSA order'' in
the System for Award Management (SAM) at https://www.sam.gov to locate
applicable FASCSA orders.
(3) The Government may identify in the solicitation other FASCSA
orders that are not in SAM, which are effective and apply to the
solicitation and resulting contract.
(4) A FASCSA order issued after the date of solicitation applies to
this contract only if added by an amendment to the solicitation or
modification to the contract (see FAR 40.204-1(c)).
(f) Covered procurement actions. Unless the Government has issued
an applicable waiver, the contractor must not provide or use any
products or services in performance of the contract that are prohibited
by an applicable covered procurement action that has been identified in
the solicitation or posted in SAM at www.sam.gov (41 U.S.C. 4713).
(g) Reasonable inquiry. The contractor must conduct a reasonable
inquiry to determine if there are any prohibited products or services.
The inquiry will look at any information in the entity's possession
that is accessible but does not need to include an internal or third-
party audit.
(h) Removal of prohibited products and services. For Federal Supply
Schedules, Governmentwide acquisition contracts, multi-agency contracts
or any other procurement instrument intended for use by multiple
agencies, upon notification from the Contracting Officer, during the
performance of the contract, the Contractor must promptly make any
necessary changes or modifications to remove any product or service
produced or provided by a source that this clause prohibits.
(i) General report.
(1) If the Contractor identifies or is notified by any source,
(including a subcontractor at any tier), that any product or service
provided or used (or to be provided or used) during contract
performance does not comply with any prohibition in this clause, then
the Contractor must report the following information, or as much
information is known, in writing to the contracting office as
identified in paragraph (i)(2) within 72 hours:
(i) Contract number and order number, if applicable;
(ii) The specific prohibition the product or service is not
complying with;
(iii) A description of the products or services that the Contractor
identifies or has reason to suspect is prohibited (include brand; model
number, such as the original equipment manufacturer (OEM) number,
manufacturer part number, or wholesaler number; and item description,
as applicable);
(iv) The entity that produced the product or service (include
entity name, UEI, CAGE code, facilities responsible for design,
fabrication, assembly, packaging, and test of the product, and whether
the entity was the OEM or a distributor (provide manufacturer codes and
distributor codes used for the product));
(v) Description of the functionality of the product or service and
how that functionality impacts the risk to the product or service;
(vi) An explanation of any factors relevant to determining if the
product or service should be permitted by an applicable exception,
exemption, or waiver (if the contractor would like the Government to
consider a waiver, and asks for such a waiver);
(vii) Whether alternative products or services are available that
would comply with the prohibition;
(viii) If the product or service is related to item maintenance,
include the following information on the item being maintained:
(A) Brand;
(B) Model number, OEM number, manufacturer part number, or
wholesaler number; and
(C) Item description, as applicable.
(ix) Any readily available information about mitigation actions
implemented or recommended.
(2) If a report must be submitted to a contracting office, the
Contractor must submit the report to the Contracting Officer or for
indefinite delivery contracts, the Contractor must report to both the
contracting officer for the indefinite delivery contract and the
contracting officer for any affected order.
(3) If the report provided does not contain any of the information
required by paragraph (i)(1) of this clause, and the contractor later
discovers new information that is required by paragraph (h)(1) of this
clause, then the contractor must submit a subsequent report within 72
hours of discovering the new information.
(4) The contractor must also report the information in paragraph
(i)(1) if the contractor wishes to ask for a waiver of the requirements
of a new FASCSA order or covered procurement action being applied
through modification.
(j) New FASCSA orders and covered procurement actions report.
(1) During contract performance, the Contractor must review SAM at
least once every three months, or as advised by the Contracting
Officer, to check for covered articles subject to FASCSA order(s) or
for products or services produced by a source subject to FASCSA
order(s) not currently identified under paragraph (e) of this clause,
or products or services prohibited by an applicable covered procurement
action.
(2) If the Contractor identifies a new FASCSA order(s) or covered
procurement actions that could impact their supply chain, then the
Contractor must conduct a reasonable inquiry to identify whether a
covered article or product or service produced or provided by a source
subject to the FASCSA order(s) or whether a product or service
prohibited by an applicable covered procurement action was provided to
the
[[Page 37630]]
Government or used during contract performance. The inquiry will look
at any information in the entity's possession that is accessible but
does not need to include an internal or third-party audit.
(3) The Contractor must submit a report to the contracting office
identified in paragraph (i)(2) of this clause if the Contractor
identifies, including through any notification by a subcontractor at
any tier, that a covered article or product or service produced or
provided by a source was provided to the Government or used during
contract performance and is subject to a FASCSA order(s) or covered
procurement action. For indefinite delivery contracts, the Contractor
must report to both the contracting office for the indefinite delivery
contract and the contracting office for any affected order. The
Contractor must report the following information within 72 hours for
each covered article or each product or service produced or provided by
a source, where the covered article or source is subject to a FASCSA
order or covered procurement action:
(i) Contract number and order number, if applicable;
(ii) Name of the covered article or source subject to a FASCSA
order or covered procurement action;
(iii) The specific FASCSA order or covered procurement action the
product or service does not comply with;
(iv) The elements of (i)(1)(iii) through (ix) of this clause.
(k) Subcontracts. The Contractor must include the substance of this
clause, including this paragraph (k) but excluding paragraphs (d)(1)
and (j)(1), in subcontracts at any tier under this contract, including
those for commercial products and commercial services.
Alternate I (DATE). As prescribed in 40.205(b), substitute the
following paragraph (e)(1) for paragraph (e)(1) of the basic clause:
(e) Governmentwide exclusion and removal orders.
(1) Contractors are prohibited from providing or using as part of
the performance of the contract any covered article, or any products or
services produced or provided by a source, if the covered article or
the source is prohibited by any applicable FASCSA orders identified by
the checkbox(es) in this paragraph (e)(1). [Contracting Officer must
select either ``yes'' or ``no'' for each of the following types of
FASCSA orders:]
Yes [ballot] No [ballot] DHS FASCSA Order
Yes [ballot] No [ballot] DoD FASCSA Order
Yes [ballot] No [ballot] DNI FASCSA Order
52.240-4 Classified Information.
As prescribed in 40.302-3, insert the following clause:
Classified Information (DATE)
(a) Definition. As used in this clause--
Handle or handling means any use of information, including but not
limited to accessing, processing, collecting, developing, receiving,
transmitting, storing, marking, safeguarding, transporting,
disseminating, reusing, and disposing of the information.
(b) Applicability. This clause applies to the extent that the
Contractor handles information classified Confidential, Secret, or Top
Secret on this contract.
(c) Requirement. The Contractor must comply with--
(1) The Security Agreement (DD Form 441), including the National
Industrial Security Program Operating Manual (32 CFR part 117); and
(2) Any revisions to that manual, notice of which has been
furnished to the Contractor.
(d) Changes. If, after the date of this contract, the security
classification or security requirements under this contract are changed
by the Government and if the changes cause an increase or decrease in
security costs or otherwise affect any other term or condition of this
contract, the contract must be subject to an equitable adjustment as if
the changes were directed under the Changes clause of this contract.
(e) Subcontracts. The Contractor must include the substance of this
clause, including this paragraph (e) but excluding any reference to the
Changes clause of this contract, in subcontracts at any tier under this
contract that involves access to classified information, including
those for commercial products or commercial services.
(f) Identification. A subcontractor requiring access to classified
information under a contract must be identified with a CAGE code on the
DD Form 254. The Contractor must require a subcontractor that handles
classified information to provide its CAGE code with its name and
location address or otherwise include it prominently in the proposal.
Each location of subcontractor performance listed on the DD Form 254 is
required to reflect a corresponding unique CAGE code for each listed
location unless the work is being performed at a Government facility,
in which case the agency location code must be used. The CAGE code must
be for that name and location address. Insert the word ``CAGE'' before
the number. The CAGE code is required prior to award. The contractor
must ensure that subcontractors maintain their CAGE code(s) throughout
the life of the contract.
(End of clause)
Alternate I (DATE). As prescribed in 40.302-3(b), add the following
paragraphs (f), (g), and (h) to the basic clause:
(f) Continue performance. (1) If a change in security requirements,
as provided in paragraphs (b) and (c), results in a change in the
security classification of this contract or any of its elements from an
unclassified status or a lower classification to a higher
classification, or in more restrictive area controls than previously
required, then the Contractor must exert every reasonable effort
compatible with the Contractor's established policies to continue
performing the work under the contract to comply with the change in
security classification or requirements.
(2) If, despite reasonable efforts, the Contractor determines that
continuing work under this contract is not practical because of the
change in security classification or requirements, the Contractor must
notify the Contracting Officer in writing. Until the Contracting
Officer resolves this problem, the Contractor must continue
safeguarding all classified material as required by this contract.
(g) Mutually satisfactory method. After receiving the written
notification, the Contracting Officer must explore the circumstances
surrounding the proposed change in security classification or
requirements and must try to work out a mutually satisfactory method so
the Contractor can continue doing the work under this contract.
(h) Termination. If, 15 days after receipt by the Contracting
Officer of the notification of the Contractor's stated inability to
proceed, the application to this contract of the change in security
classification or requirements has not been withdrawn or a mutually
satisfactory method for continuing performance of work under this
contract has not been agreed upon, the Contractor may request the
Contracting Officer to terminate the contract in whole or in part. The
Contracting Officer must terminate the contract in whole or in part, as
may be appropriate, and the termination must be deemed a termination
under the terms of the Termination for the Convenience of the
Government clause.
Alternate II (DATE). As prescribed in 40.302-3(c), add the
following paragraph (f) to the basic clause:
(f) Identification. The Contractor is responsible for furnishing to
each employee, and for requiring each employee engaged on the work to
[[Page 37631]]
display, such identification as may be approved and directed by the
Contracting Officer. All prescribed identification must immediately be
delivered to the Contracting Officer, for cancellation upon the release
of any employee. When required by the Contracting Officer, the
Contractor must obtain and submit fingerprints of all persons employed
or to be employed on the project.
52.240-5 Covered Federal Information.
As prescribed in 40.303-2, insert the following clause:
Covered Federal Information (DATE)
(a) Definitions. As used in this clause--
Covered contractor information system means an information system
that is owned, operated, or used by a contractor that processes,
stores, or transmits covered Federal information.
Covered Federal information means information provided by or
created for the Government, when that information is other than--
(1) Simple transactional information (such as that necessary to
process payments);
(2) Information already publicly released (such as on public
websites), or marked for public release, by the Government;
(3) Federally-funded basic and applied research at colleges,
universities, and laboratories in accordance with National Security
Decision Directive 189;
(4) CUI; or
(5) Classified information.
Handle or handling means any use of information, including but not
limited to accessing, processing, collecting, developing, receiving,
transmitting, storing, marking, safeguarding, transporting,
disseminating, reusing, and disposing of the information.
Information means any communication or representation of knowledge
such as facts, data, or opinions, in any medium or form, including
textual, numerical, graphic, cartographic, narrative, or audiovisual
(Committee on National Security Systems Instruction (CNSSI) 4009).
Information system means a discrete set of information resources
organized for the collection, processing, maintenance, use, sharing,
dissemination, or disposition of information (44 U.S.C. 3502).
(b) Handling requirements.
(1) Covered contractor information systems requirements. The
Contractor must safeguard its covered contractor information systems by
implementing, at minimum, the following security controls:
(i) Limit information system access to authorized users, processes
acting on behalf of authorized users, or devices (including other
information systems).
(ii) Limit information system access to the types of transactions
and functions that authorized users are permitted to execute.
(iii) Verify and control/limit connections to and use of external
information systems.
(iv) Control information posted or processed on publicly accessible
information systems.
(v) Identify information system users, processes acting on behalf
of users, or devices.
(vi) Authenticate (or verify) the identities of those users,
processes, or devices, as a prerequisite to allowing access to
organizational information systems.
(vii) Sanitize or destroy information system media containing
covered Federal Information before disposal or release for reuse.
(viii) Limit physical access to organizational information systems,
equipment, and the respective operating environments to authorized
individuals.
(ix) Escort visitors and monitor visitor activity; maintain audit
logs of physical access; and control and manage physical access
devices.
(x) Monitor, control, and protect organizational communications
(i.e., information transmitted or received by organizational
information systems) at the external boundaries and key internal
boundaries of the information systems.
(xi) Implement subnetworks for publicly accessible system
components that are physically or logically separated from internal
networks.
(xii) Identify, report, and correct information and information
system flaws in a timely manner.
(xiii) Provide protection from malicious code (i.e., firewalls,
virus detection, etc.) at appropriate locations within organizational
information systems.
(xiv) Update malicious code (i.e., firewalls, virus detection,
etc.) protection mechanisms when new releases are available.
(xv) Perform periodic scans of the information system and real-time
scans of files from external sources as files are downloaded, opened,
or executed.
(2) Other handling requirements. The contractor must protect
covered Federal information from unauthorized disclosure when handled
outside of a covered contractor information system.
(c) Subcontracts. The Contractor must include the substance of this
clause, including this paragraph (c), in subcontracts under this
contract (including subcontracts for the acquisition of commercial
products, other than commercially available off-the-shelf items, or
commercial services), in which the subcontractor may handle covered
Federal information.
(End of clause)
52.240-6 Notice of Controlled Unclassified Information Requirements.
As prescribed in 40.304-7(a), insert the following provision:
Notice of Controlled Unclassified Information Requirements (DATE)
(a) Definitions. As used in this provision, authorized holder,
contractor-attributional information, contractor bid or proposal
information, controlled unclassified information (CUI), CUI incident,
handling, and unauthorized disclosure have the meaning provided in the
clause 52.240-7, Controlled Unclassified Information.
(b) Government-provided information. (1) The Offeror must not use
Government-provided information for its own purposes, whether or not
the information is marked as CUI, unless the information is in the
public domain, or unless the information was lawfully made available to
the Offeror by someone other than the Government.
(2) If Offeror is required to handle CUI, the Government will
provide agency procedures on handling the CUI to ensure compliance with
the requirements in 32 CFR part 2002. Offerors must comply with these
agency procedures for handling CUI.
(c) Reporting Unmarked CUI, mismarked CUI, and CUI incidents.
(1) The Offeror should notify the Contracting Officer within 72
hours of discovery if the Offeror discovers any information within the
scope of this solicitation the Offeror has knowledge indicating the
information is CUI that--
(i) Is not marked;
(ii) Is not properly marked;
(iii) Is not identified on the SF XXX; or
(iv) Is involved in a CUI incident.
(2) The Offeror should safeguard any information the Offeror has
evidence indicating the information is CUI that is not identified in
the SF XXX or is not marked or properly marked as required in the SF
XXX until a contracting officer makes a determination.
(d) Plan of Action and Milestones Disclosure. If the offeror is not
compliant with any of the requirements in 52.240-7, the offeror must
submit a disclosure as part of their offer to the Contracting Officer
that identifies all requirements the offeror is not compliant with and
a plan of action and milestones for the offeror to meet the applicable
requirements.
[[Page 37632]]
(End of provision)
52.240-7 Controlled Unclassified Information.
As prescribed in 40.304-7(b), insert the following clause:
Controlled Unclassified Information (DATE)
(a) Identifying controlled unclassified information. The SF XXX,
Controlled Unclassified Information (CUI) Requirements, that is
incorporated into this contract identifies what controlled unclassified
information (CUI) is involved in the contract. The Contractor is
required to safeguard only the CUI that is identified in the SF XXX.
However, see paragraph (c) of this clause.
(b) Definitions. As used in this clause-
Authorized holder is an individual, agency, organization (e.g.,
contractor), or group of users that is permitted to handle CUI, in
accordance with this part.
Adequate security means security protections commensurate with the
risk of harm resulting from unauthorized access, use, disclosure,
disruption, modification, or destruction of information.
Cloud computing means a model for enabling ubiquitous, convenient,
on-demand network access to a shared pool of configurable computing
resources (e.g., networks, servers, storage, applications, and
services) that can be rapidly provisioned and released with minimal
management effort or service provider interaction. Cloud computing is
characterized by on-demand self-service, broad network access, resource
pooling, rapid elasticity, and measured service; and includes service
models such as software-as-a-service, infrastructure-as-a-service, and
platform-as-a-service (NIST SP 800-145).
Contractor-attributional information means information that
identifies the Contractor or its employees directly or identifies them
indirectly by grouping information that can be traced back to the
Contractor (e.g., program description or facility locations).
Contractor bid or proposal information means any of the following
information submitted to a Federal agency as part of or in connection
with a bid or proposal to enter into a Federal agency procurement
contract, if that information has not been previously made available to
the public or disclosed publicly:
(1) Cost or pricing data as defined by 10 U.S.C. 3701(1), with
respect to procurements subject to that section, and 41 U.S.C.
3501(a)(2), with respect to procurements subject to that section.
(2) Indirect costs and direct labor rates.
(3) Proprietary information about manufacturing processes,
operations, or techniques marked by the Contractor in accordance with
applicable law or regulation.
(4) Information marked by the Contractor as ``Contractor bid or
proposal information'' in accordance with applicable law or regulation.
(5) Information marked in accordance with 52.215-1(e).
Controlled unclassified information (CUI) means information that
the Government creates or possesses, or that an entity creates or
possesses for or on behalf of the Government, that a law, regulation,
or Governmentwide policy requires or permits an agency to handle using
safeguarding or dissemination controls. CUI does not include--
(1) Information a Contractor possesses and maintains in its own
systems that did not come from, or was not created by or specifically
for, an executive branch agency or an entity acting for an agency (see
32 CFR 2002.4); or
(2) Federally-funded basic and applied research at colleges,
universities, and laboratories in accordance with National Security
Decision Directive 189; or
(3) Information a Contractor creates or possesses that a law,
regulation, or Governmentwide policy does not specifically require the
Contractor to handle using safeguarding or dissemination controls.
CUI Basic means the subset of CUI for which the authorizing law,
regulation, or Governmentwide policy does not set out specific handling
or dissemination controls. CUI Basic must be handled according to the
uniform set of controls set forth in 32 CFR part 2002 and the CUI
Registry.
CUI categories means those types of information for which laws,
regulations, or Governmentwide policies require or permit agencies to
exercise safeguarding or dissemination controls, and which has been
listed in the CUI Registry.
CUI incident means unauthorized disclosure, improper modification,
improper destruction of CUI, in any form or medium, or unauthorized
access to the information system on which the CUI resides. Improper
handling of CUI (e.g., unmarked or mismarked CUI) is not a CUI incident
unless the improper handling has resulted in an unauthorized
disclosure, improper modification, or improper destruction of CUI.
CUI Registry means the online repository for all information,
guidance, policy, and requirements on handling CUI. Among other
information, the CUI Registry identifies all approved CUI categories
and subcategories, provides general descriptions for each, identifies
the basis for controls, establishes markings, and includes guidance on
handling procedures (see https://archives.gov/cui).
CUI Specified means the subset of CUI for which the authorizing
law, regulation, or Governmentwide policy contains specific handling
controls that it requires or permits agencies to use and that differ
from those for CUI Basic. The CUI Registry indicates which laws,
regulations, and Governmentwide policies include such specific
requirements.
External service provider means external people, technology, or
facilities that an organization utilizes for provision and management
of IT and/or cybersecurity services on behalf of the organization.
Federal information system means an information system used or
operated by an executive agency, by a contractor of an executive
agency, or by another organization on behalf of an executive agency (40
U.S.C. 11331).
Handle or handling means any use of CUI, including but not limited
to accessing, processing, collecting, developing, receiving,
transmitting, storing, marking, safeguarding, transporting,
disseminating, re-using, and disposing of the information.
Information means any communication or representation of knowledge
such as facts, data, or opinions in any medium or form, including
textual, numerical, graphic, cartographic, narrative, electronic, or
audiovisual forms (see Office of Management and Budget (OMB) Circular
No. A-130, Managing Information as a Strategic Resource).
Information system means a discrete set of information resources
organized for the collection, processing, maintenance, use, sharing,
dissemination, or disposition of information (44 U.S.C. 3502(8)).
Lawful Government purpose means any activity, mission, function,
operation, or endeavor that the Government authorizes or recognizes as
within the scope of its legal authorities or the legal authorities of
non-executive branch entities such as state and local law enforcement.
Limited dissemination control means any control identified on the
CUI Registry that agencies may use to limit or specify CUI
dissemination.
On behalf of an agency means a Contractor uses or operates an
information system or maintains or
[[Page 37633]]
collects information for the purpose of processing, storing, or
transmitting Federal information, and those activities are not
incidental to providing a service or product to the Government.
Unauthorized disclosure means when an authorized holder of CUI
intentionally or unintentionally discloses, accesses, or observes CUI
without a lawful Government purpose, in violation of restrictions
imposed by safeguarding or dissemination controls, or contrary to
limited dissemination controls.
(c) Identifying and reporting information the Contractor has
evidence indicating the information is potentially CUI.
(1) The Contractor must notify the Contracting Officer within 72
hours of discovery if--
(i) The Contractor discovers any information that the Contractor
has knowledge indicating the information is CUI that is not identified
in the SF XXX or is not marked or properly marked as required in the SF
XXX;
(ii) There is any inconsistency between this clause and an SF XXX
incorporated into the contract.
(2) The Contractor must safeguard any information the Contractor
has knowledge indicating the information is CUI that is not identified
in the SF XXX or is not marked or properly marked as required in the SF
XXX until the Contracting Officer makes a determination. If such
information is involved in a CUI incident the contractor must also
comply with paragraph (e) of this clause.
(3) The Contractor is not entitled to use Government-provided
information for its own purposes, whether or not the information is
marked as CUI, unless the information is in the public domain, or
unless the information was lawfully made available to the Contractor by
someone other than the Government.
(4) The Contractor must appropriately identify information the
Contractor owns and provides to the Government (e.g., contractor bid or
proposal information, contractor-attributional information, or
contractor proprietary business information). The Government will
determine in accordance with agency procedures whether the information
provided by the Contractor must be handled by the Government as CUI or
entitled to other protections by the Government (e.g., contractor-
attributional information associated with a CUI incident).
(d) Handling CUI.
(1) The Contractor must handle CUI that the Government identifies
in the SF XXX and ensure handling is consistent with applicable
requirements in 32 CFR 2002.14, 32 CFR 2002.16, 32 CFR 2002.18, 32 CFR
2002.20, and SF XXX.
(i) This includes CUI that the Government provides to the
Contractor or CUI that the Contractor handles in performance of the
contract.
(ii) For CUI located within a Federally-controlled facility, the
Contractor must ensure that any Contractor employees handling CUI
within Federally-controlled facilities comply with the requirements
identified within Part B on the SF XXX.
(iii) For CUI located within a non-Federally-controlled facility,
the Contractor must ensure that any Contractor employees handling CUI
within the non-Federally-controlled facility comply with the
requirements identified in Part C of the SF XXX.
(iv) When information is not identified as CUI, it may be covered
Federal information requiring information system security controls in
accordance with Federal Acquisition Regulation clause 52.240-5, Covered
Federal Information.
(2) The Contractor is not responsible for handling unmarked or
mismarked CUI unless doing so is specifically included in the SF XXX,
such as when the Contractor generates or develops CUI that has been
designated by the Government. For marking required by the SF XXX, the
contractor must use the Banner Format and Marking Notes in the CUI
Registry to mark the applicable CUI categories using the indicators in
the SF XXX.
(3) Contractors operating information systems that access, use,
process, store, maintain, or transmit CUI identified in the contract,
must implement the following requirements:
(i) When the Contractor is operating an information system
identified in the SF XXX as a Federal information system--
(A) The Contractor must comply with agency-identified security
requirements from the latest version of National Institute of Standards
and Technology (NIST) Special Publication (SP) 800-53 and any CUI
Specified requirements identified in the SF XXX; and
(B) If using cloud computing services, the Contractor must comply
with agency-identified security requirements, but at no less than the
Federal Risk and Authorization Management Program (FedRAMP) Moderate
baseline (https://www.fedramp.gov/rev5/documents-templates/).
(ii) When the Contractor is operating a non-Federal information
system, except for out-of-scope assets as identified in paragraph (A),
the Contractor must comply with the requirements in paragraphs (B)
through (F)--
(A) The following assets are out-of-scope:
(1) An endpoint hosting a virtual desktop infrastructure client
configured to prevent any processing, storage, or transmission of CUI
beyond the keyboard/video/mouse sent to the virtual desktop
infrastructure client).
(2) Commercial communications networks that transmit government and
non-government information using the same equipment, protocols, and
methodologies, without regard to the source or recipient of the
information.
(B) Comply with the security requirements of NIST SP 800-171
Revision 3, ``Protecting Controlled Unclassified Information in Non-
Federal Information Systems and Organizations'' (available via the
internet at https://dx.doi.org/10.6028/NIST.SP.800-171). The
organizational defined parameters (ODP) provided at the web page at
https://dowcio.war.gov/Portals/0/Documents/CMMC/OrgDefinedParmsNISTSP800-171.pdf must be applied for applicable NIST SP
800-171 Revision 3 security requirements;
(C) Comply with all security requirements for CUI Specified
identified by the agency in the SF XXX;
(D) Comply with any requirements from NIST SP 800-172, Enhanced
Security Requirements for Protecting Controlled Unclassified
Information, identified by the agency for a critical program or high-
value asset. For any requirements in NIST SP 800-172 identified by the
agency, the organizational defined parameters (ODP) provided elsewhere
in this solicitation, as described in part D of SF XXX, must be applied
for applicable security requirements;
(E) Ensure that, if the Contractor uses a cloud service provider to
store, process, or transmit any CUI identified in SF XXX--
(1) The cloud computing service provider meets security
requirements equivalent to those established by the Government for
FedRAMP Moderate baseline (https://www.fedramp.gov/rev5/documents-templates/); and
(2) The additional requirements in paragraph (d)(3)(ii)(D) of this
clause are met; and
(F) Make the system security plan available (plan must identify use
of any external service provider handling CUI), and any associated
plans of action required by NIST SP 800-171, for any planned
implementations or mitigations to the Government upon request to
demonstrate the Contractor's implementation or planned
[[Page 37634]]
implementation of the security requirements.
(e) CUI incidents.
(1) For CUI in a Federally-controlled facility, the Contractor must
report CUI incidents in accordance with agency policy as specified in
the SF XXX.
(2) For CUI in a non-Federally-controlled facility, the Contractor
must report any CUI incident (except for any CUI incident involving a
FedRAMP authorized cloud computing service provider that is reported in
accordance with FedRAMP Incident Communication Procedures) within 72
hours of discovery to https://dibnet.dod.mil for DoD contracts and to
CISA for non-DoD contracts at https://www.cisa.gov/reporting-cyber-incident and provide a notification to the contracting officer and next
higher tier contractor (if applicable) that a CUI incident report has
been submitted.
(i) The contractor must submit in the first report as many of the
applicable data elements as identified in the applicable website that
are available at the time.
(ii) If the first report does not contain all of the applicable
data elements or some of the information changes after the
investigation is substantially complete, the contractor must submit a
subsequent report containing the updated or new information.
(3) When the Contractor discovers a CUI incident, the Contractor
must--
(i) Determine and inventory what CUI was or could have been
improperly accessed, created, collected, used, processed, stored,
maintained, disseminated, disclosed, or disposed of;
(ii) Construct a timeline of user activity;
(iii) Determine methods and techniques used to access CUI; and
(iv) Cooperate and exchange information with agency officials, as
determined necessary by the agency, in order to effectively report and
manage a CUI incident.
(4) If the CUI incident has occurred on an information system,
preserve and protect available images of all known affected information
systems and all relevant monitoring and packet capture data until the
Government declines interest or 90 days from the date of the submission
of the report passes without the Government requesting the media and
data, whichever is sooner.
(5) The reporting requirements of this clause do not relieve the
Contractor from the requirement to follow any applicable laws,
regulations, or policies outside of this clause.
(f) Resolving Conflicts with Other Laws or Regulations. Contractors
must notify the contracting officer within 72 hours of determining that
they are not able to comply with any of the requirements in this clause
due to conflict with another law or regulation.
(g) Subcontracts. The Contractor must include in each subcontract
at any tier under this contract that will require access to or the
ability to access CUI identified in the SF XXX, Controlled Unclassified
Information (CUI) Requirements, including those for commercial products
(other than those for commercially available off-the-shelf items) or
commercial services--
(1) The substance of this clause, including this paragraph (g),
without alteration except to identify the parties; and
(2) Any applicable information within the SF XXX to indicate to the
subcontractor what CUI applies to the subcontract.
(End of clause)
52.252-1 and 52.252-2 [Removed and Reserved]
24. Remove and reserve sections 52.252-1 and 52.252-2.
25. Revise sections 52.252-3 through 52.252-6 to read as follows:
52.252-3 Alterations in Solicitation.
As prescribed in 52.107(a), insert the following provision:
Alterations in Solicitation (DATE)
Portions of this solicitation are altered as follows: ___
(End of provision)
52.252-4 Alterations in Contract.
As prescribed in 52.107(b), insert the following clause:
Alterations in Contract (DATE)
Portions of this contract are altered as follows: ___
(End of clause)
52.252-5 Authorized Deviations in Provisions.
As prescribed in 52.107(c), insert the following provision:
Authorized Deviations in Provisions (DATE)
(a) The use in this solicitation of any Federal Acquisition
Regulation (48 CFR chapter 1) provision with an authorized deviation is
indicated by the addition of (DEVIATION) after the date of the
provision.
(b) The use in this solicitation of any __ [insert regulation name]
(48 CFR chapter __) provision with an authorized deviation is indicated
by the addition of (DEVIATION) after the name of the regulation.
(End of provision)
52.252-6 Authorized Deviations in Clauses.
As prescribed in 52.107(d), insert the following clause:
Authorized Deviations in Clauses (DATE)
(a) The use in this solicitation or contract of any Federal
Acquisition Regulation (48 CFR Chapter 1) clause with an authorized
deviation is indicated by the addition of (DEVIATION) after the date of
the clause.
(b) The use in this solicitation or contract of any __ [insert
regulation name] (48 CFR __) clause with an authorized deviation is
indicated by the addition of (DEVIATION) after the name of the
regulation.
(End of clause)
52.253-1 [Removed and Reserved]
0
26. Remove and reserve section 52.253-1.
Subpart 52.3 [Removed and Reserved]
0
27. Remove and reserve subpart 52.3, consisting of section 52.300 and
52.301.
PART 53 [Removed and Reserved]
0
28. Remove and reserve part 53, consisting of sections 53.000, 53.001,
subparts 53.1, 53.2, and 53.3.
[FR Doc. 2026-12559 Filed 6-22-26; 8:45 am]
BILLING CODE 6820-EP-P