DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1

Federal Acquisition Regulation; Small Entity Compliance Guide

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

ACTION: Small Entity Compliance Guide.

_____________________________________________________________

SUMMARY: This document is issued under the joint authority of the Secretary of Defense, the Administrator of General Services and the Administrator for the National Aeronautics and Space Administration as the Federal Acquisition Regulation (FAR) Council. This Small Entity Compliance Guide has been prepared in accordance with Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121). It consists of a summary of rules appearing in Federal Acquisition Circular (FAC) 97-01 which amend the FAR. The rules marked with an asterisk (*) are those for which a final regulatory flexibility analysis has been prepared in accordance with 5 U.S.C. 604. Further information regarding these rules may be obtained by referring to FAC 97-01 which precedes this notice. This document may be obtained from the Internet.

FOR FURTHER INFORMATION CONTACT: Beverly Fayson, FAR Secretariat, (202) 501-4755.

ITEM SUBJECT FAR CASE ANALYST

I Business Process Innovation 97-006 De Stefano

II FASA and the Walsh- 96-601 OÌNeill

Healey Public Contracts Act

III * Irrevocable Letters 95-301 OÌNeill

of Credit and Alternatives

to Miller Act Bonds

IV Automatic Data Processing 96-010 Olson

Equipment Leasing Costs

V * Environmentally Sound 92-054A De Stefano

Products

VI New FAR Certifications 96-329 De Stefano

VII * Service Contracting 95-311 OÌNeill

VIII ADP/Telecommunications 96-602 Nelson

Federal Supply Schedules

IX Certificate of Competency 96-002 Moss

(Interim)

X Economically Disadvantaged 97-008 Moss

Individuals

XI Minority Small Business and 95-028 Moss

Capital Ownership

XII Executive Order 12933, 94-610 OÌNeill

Nondisplacement of

Qualified Workers Under

Certain Contracts

(Interim)

XIII Designation of Hong Kong 97-019 Linfield

XIV Foreign Differential Pay 96-012 Olson

XV Local Government Lobbying 96-003 Nelson

Costs

XVI Independent Government 97-005 OÌNeill

EstimatesÛConstruction

XVII Year 2000 Compliance 96-607 Nelson

XVIII * Modification of Existing 96-606 De Stefano

Contracts under FASA and FARA

Item IÛBusiness Process Innovation (FAR Case 97-006)

This final rule amends FAR 1.102-4(e) to encourage contracting officers, in their role as members of the Government acquisition team, to take the lead in encouraging business process innovations and ensuring that business decisions are sound.

Item IIÛFASA and the Walsh-Healey Public Contracts Act (FAR Case 96-601)

The interim rule published as Item I of Federal Acquisition Circular 90-43 is converted to a final rule without change. The rule amends the FAR to eliminate the requirement that covered contractors under the Walsh-Healey Public Contracts Act must be either the manufacturer of or a regular dealer in the materials, supplies, articles, or equipment to be manufactured or used in the performance of the contract.

Item IIIÛIrrevocable Letters of Credit and Alternatives to Miller Act Bonds (FAR Case 95-301)

The interim rule published as Item XVII of FAC 90-39 is revised and finalized. The rule amends FAR Parts 28 and 52 to provide for use of Irrevocable Letters of Credit as substitutes for corporate or individual surety on Miller Act bonds, and to provide alternatives to Miller Act payment bonds for construction contracts valued at $25,000 to $100,000, which are no longer subject to the Miller Act, in accordance with Section 4104(b)(1) of the Federal Acquisition Streamlining Act of 1994 (Public Law 103-355).

Item IVÛAutomatic Data Processing Equipment Leasing Costs (FAR Case 96-010)

The interim rule published as Item I of FAC 90-44 is converted to a final rule without change. The rule amends FAR Part 31 to remove the automatic data processing equipment leasing cost principle.

Item VÛEnvironmentally Sound Products
(FAR Case 92-054A)

The interim rule published as Item II of FAC 90-27 is revised and finalized. The rule amends FAR Parts 1, 7, 10, 11, 13, 15, 23, 36, 42, and 52 to incorporate policies for the acquisition of environmentally preferable and energy-efficient products and services. The final rule differs from the interim rule in that it clarifies the acceptability of used, reconditioned, or remanufactured supplies, or former Government surplus property, proposed for use under a contract; revises the clause at 52.211-5 regarding acceptability of such material and limits its use in solicitations and contracts for commercial items; eliminates the provisions at 52.211-6 and 52.223-8 and the clause at 52.211-7; revises the clause at 52.223-9 to streamline reporting requirements regarding the recovered material content of EPA-designated items; and eliminates references to agency designation of items requiring minimum recovered material content.

Item VIÛNew FAR Certifications (FAR Case 96-329)

This final rule adds a new section at FAR 1.107 to reflect the provisions of Section 4301(b)(2) of the Clinger-Cohen Act of 1996 (Pub. L. 104-106). Section 4301(b)(2) prohibits the inclusion of a new certification requirement in the FAR for contractors or offerors unless the certification requirement is specifically imposed by statute, or unless a written justification for such certification requirement is provided to the Administrator for Federal Procurement Policy by the FAR Council and the Administrator approves in writing the inclusion of the certification.

Item VIIÛService Contracting (FAR Case 95-311)

This final rule amends FAR Parts 7, 16, 37, 42, 46, and 52 to implement Office of Federal Procurement Policy (OFPP) Policy Letter 91-2, Service Contracting. The OFPP policy letter prescribes policies and procedures for use of performance-based contracting methods.

Item VIIIÛADP/Telecommunications Federal Supply Schedules (FAR Case 96-602)

This final rule amends FAR Subpart 8.4 to clarify procedures for placing orders and obtaining price reductions under GSA Federal supply schedule contracts, and to add information regarding the ÏGSA Advantage!Ó on-line shopping service. Related amendments are made at FAR 13.202(a)(4) and 51.103.

Item IXÛCertificate of Competency (FAR Case 96-002)

This interim rule amends FAR Parts 9 and 19 to implement revisions made to the Small Business AdministrationÌs (SBA) procurement assistance programs contained in 13 CFR Part 125. The rule notably (1) increases the threshold over which contracting officers may appeal the award of a Certificate of Competency (COC) from $25,000 to $100,000; (2) updates the names of SBA offices involved in processing COCÌs; and (3) implements the requirement that compliance with the limitations on subcontracting be considered an element of responsibility. In addition, this interim rule removes language implementing Section 15(c) of the Small Business Act (15 U.S.C. 644(c)) as amended by Section 305 of Public Law 103-403, Small Business Administration Reauthorization and Amendments Act of 1994. Section 305, which authorized public and private organizations for the handicapped to participate in acquisitions set aside for small businesses, has expired.

Item XÛEconomically Disadvantaged Individuals
(FAR Case 97-008)

This final rule amends the definition of Ïsmall disadvantaged business concernÓ at FAR 19.001 to update the categories of individuals considered to be socially and economically disadvantaged. In accordance with the Small Business AdministrationÌs regulations at 13 CFR 124.105, the Maldives Islands has been added to the category of ÏSubcontinent Asian AmericansÓ; and Macao, Hong Kong, Fiji, Tonga, Kiribati, Tuvalu, and Nauru have been added to the category of ÏAsian Pacific Americans.Ó

Item XIÛMinority Small Business and Capital Ownership (FAR Case 95-028)

The interim rule published as Item VII of FAC 90-43 is revised and finalized. The rule amends the FAR to reflect changes to the Small Business AdministrationÌs (SBA) regulations at 13 CFR Parts 121 and 124, which address the Minority Small Business and Capital Ownership Development Program. The rule clarifies eligibility and procedural requirements for procurements under the 8(a) program. The final rule differs from the interim rule in that it amends FAR 19.804-2 to reflect changes that the SBA is making in its processing of 8(a) requirements.

Item XIIÛExecutive Order 12933, Nondisplacement of Qualified Workers Under Certain Contracts (FAR Case 94-610)

This interim rule adds a new FAR Subpart 22.12 implementing Executive Order 12933, Nondisplacement of Qualified Workers Under Certain Contracts, of October 20, 1994. The Executive Order and the interim rule require that workers on certain building service contracts be given the right of first refusal for employment with the successor contractor, if they would otherwise lose their jobs as a result of the award of the successor contract.

Item XIIIÛDesignation of Hong Kong (FAR Case 97-019)

This final rule amends FAR 25.401 to add Hong Kong as a designated country under the Trade Agreements Act of 1979, as directed by the United States Trade Representative.

Item XIVÛForeign Differential Pay (FAR Case 96-012)

The interim rule published as Item VI of FAC 90-44 is converted to a final rule without change. The rule amends FAR 31.205-6 to remove the prohibition on the calculation of foreign differential pay based directly on an employeeÌs specific increase in income taxes resulting from assignment overseas.

Item XVÛLocal Government Lobbying Costs (FAR Case 96-003)

The interim rule published as Item XI of FAC 90-43 is converted to a final rule without change. The rule amends FAR 31.205-22 to make allowable the costs of any lobbying activities to influence local legislation in order to directly reduce contract costs, or to avoid material impairment of the contractorÌs authority to perform the contract.

Item XVIÛIndependent Government EstimatesÛConstruction (FAR Case 97-005)

This final rule amends FAR 36.203(a) and 36.605(a) to raise the threshold for a mandatory independent Government estimate of construction costs and architect-engineer costs from $25,000 to $100,000.

Item XVIIÛYear 2000 Compliance (FAR Case 96-607)

The interim rule published as Item XIV of FAC 90-45 is revised and finalized. The rule provides guidance regarding the acquisition of information technology that is Year 2000 compliant. The final rule differs from the interim rule in that it makes clarifying revisions to the definition of ÏYear 2000 compliantÓ at FAR 39.002.

Item XVIIIÛModification of Existing Contracts under FASA and FARA (FAR Case 96-606)

The interim rule published as Item VIII of FAC 90-44 is converted to a final rule without change. The rule amends FAR 43.102 to implement subsection 10002(e) of the Federal Acquisition Streamlining Act of 1994 (Public Law 103-355) and subsections 4402(d) and (e) of the Clinger-Cohen Act of 1996 (Public Law 104-106). The rule authorizes, but does not require, contracting officers, if requested by the contractor, to modify existing contracts without requiring consideration, to incorporate changes authorized by the Act.

Dated: August 14, 1997

EDWARD C. LOEB,

Director,

Federal Acquisition Policy Division.