fac90_43

[Federal Register: December 20, 1996 (Volume 61, Number 246)]

[Rules and Regulations]

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[[Page 67407]]

_______________________________________________________________________

Part III

Department of Defense

General Services Administration

National Aeronautics and Space Administration

_______________________________________________________________________

48 CFR Chapter 1

Federal Acquisition Regulations; Final Rules

[[Page 67408]]

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1

[Federal Acquisition Circular 90-43]

Federal Acquisition Regulation; Introduction of Miscellaneous

Amendments

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Summary presentation of final and interim rules.

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SUMMARY: This document serves to introduce and relate together the

interim and final rule documents which follow and which comprise

Federal Acquisition Circular (FAC) 90-43. The Civilian Agency

Acquisition Council and the Defense Acquisition Regulations Council

have agreed to issue FAC 90-43 to amend the Federal Acquisition

Regulation (FAR) to implement changes in the areas listed below. All

references, in this FAC, to the Federal Acquisition Reform Act of 1996

(FARA) also include the Clinger/Cohen Act which FARA was subsequently

named.

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Item Subject FAR case Analyst

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I FASA and the Walsh- 96-601 O'Neill.

Healey Public

Contracts Act

(Interim).

II Individual and Class 96-004 O'Neill.

Deviations.

III Use of Data Universal 95-307 Klein.

Numbering System as

Primary Contractor

Identification

(Interim).

IV Inapplicability of 96-310 Olson.

Cost Accounting

Standards to

Contracts and

Subcontracts for

Commercial Items.

V Allowable Cost and 93-024 Olson.

Payment Clause.

VI Mentor/Protege Program 93-308 Klein.

VII Minority Small 95-028 Klein.

Business and Capital

Ownership (Interim).

VIII Extension of Small 96-328 Moss.

Business

Competitiveness

Demonstration Program.

IX Morale, Health, 92-613 Olson.

Welfare Costs/

Contractor Overhead

Certification.

X Impairment of Long- 95-003 Olson.

Lived Assets.

XI Local Government 96-003 Olson.

Lobbying Costs

(Interim).

XII Clause Flowdown....... 92-035 Olson.

XIII Collection of FASA- 95-310 Klein.

Related Information

within the Federal

Procurement Data

System.

XIV Technical Amendments.. N/A N/A.

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DATES: For effective dates and comment dates, see individual documents

which appear elsewhere in this separate part.

FOR FURTHER INFORMATION CONTACT: The analyst whose name appears in

relation to each FAR case or subject area. For general information,

contact the FAR Secretariat, Room 4035, GS Building, Washington, DC,

20405 (202) 501-4755. Please cite FAC 90-43 and FAR case number(s).

SUPPLEMENTARY INFORMATION: Federal Acquisition Circular 90-43 amends

the Federal Acquisition Regulation (FAR) as specified below:

Case Summaries

For the actual revisions and/or amendments to these FAR cases,

refer to the specific item number and subject set forth in the

documents following these item summaries.

Item I--FASA and the Walsh-Healey Public Contracts Act (FAR Case 96-

601)

This interim rule amends the Federal Acquisition Regulation (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. Section 7201

of the Federal Acquisition Streamlining Act of 1994 (Public Law 103-

355) amended the Walsh-Healey Public Contracts Act to repeal the

``manufacturer'' or ``regular dealer'' requirement.

Item II--Individual and Class Deviations (FAR Case 96-004)

This final rule amends the FAR to eliminate the requirements for

all agencies to submit copies of approved individual deviations to the

FAR Secretariat and for DOD and NASA to submit copies of approved class

deviations to the FAR Secretariat.

Item III--Use of Data Universal Numbering System as Primary Contractor

Identification (FAR Case 95-307)

This interim rule amends the FAR by adding a new solicitation

provision at 52.204-6, and revising Standard Forms 294 and 295 to

replace the Contractor Establishment Code with the Data Universal

Numbering System number as the means of identifying contractors in the

Federal Procurement Data System.

Item IV--Inapplicability of Cost Accounting Standards to Contracts and

Subcontracts for Commercial Items (FAR Case 96-310)

This final rule amends FAR Part 12 to implement Section 4205 of the

Clinger-Cohen Act of 1996 (Pub. L. 104-106) (formerly Federal

Acquisition Reform Act (FARA)). Section 4205 amends 41 U.S.C. 422(f) to

provide that the statutory requirement for mandatory use of Cost

Accounting Standards (CAS) need not apply to contracts or subcontracts

for the acquisition of commercial items. While CAS generally will not

apply to acquisitions of commercial items, CAS requirements may be

invoked as a matter of policy by the CAS Board, pursuant to the

authority provided in 41 U.S.C. 422.

Item V--Allowable Cost and Payment Clause (FAR Case 93-024)

This final rule amends the FAR to clarify that reimbursement of

subcontract costs under cost-type contracts generally will not be made

to a large business contractor until the contractor has made payment to

the subcontractor.

[[Page 67409]]

Item VI--Mentor/Protege Program (FAR Case 93-308)

The interim rule published as Item X of FAC 90-37 is finalized with

minor clarifying changes. The rule permits a mentor firm under the DOD

Pilot Mentor/Protege Program to be granted credit toward subcontracting

goals for certain costs incurred in providing developmental assistance

to its protege firms, and to award subcontracts on a noncompetitive

basis to its protege firms.

Item VII--Minority Small Business and Capital Ownership (FAR Case

95-028)

This interim rule amends the FAR to reflect revisions to the Small

Business Administration's 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.

Item VIII--Extension of Small Business Competitiveness Demonstration

Program (FAR Case 96-328)

This final rule amends FAR Subpart 19.10 to implement Section 108,

Title I (Amendments to Small Business Administration Act), of the

National Defense Authorization Act for Fiscal Year 1997 (Pub. L. 104-

208). Section 108 extends the Small Business Competitiveness

Demonstration Program (15 U.S.C. 644 note) until September 30, 1997.

Item IX--Morale, Health, Welfare Costs/Contractor Overhead

Certification (FAR Case 92-613)

This final rule amends the cost principle at FAR 31.205-1, Public

Relations and Advertising Costs, by removing from paragraph (f)(5) the

parenthetical reference to other cost principles to eliminate any

confusion as to which cost principle governs.

Item X--Impairment of Long-Lived Assets (FAR Case 95-003)

This final rule amends the FAR to clarify the cost allowability

rules concerning the recognition of losses when carrying values of

impaired assets are written down for financial reporting purposes.

Item XI--Local Government Lobbying Costs (FAR Case 96-003)

This interim rule amends the FAR to make allowable the costs of

lobbying activities to influence local legislation in order to directly

reduce contract costs or to avoid material impairment of the

contractor's authority to perform the contract.

Item XII--Clause Flowdown (FAR Case 92-035)

This final rule amends the FAR by eliminating requirements for

prime contractors to flow down clause provisions to their

subcontractors or suppliers from FAR clauses 52.215-26, 52.216-5,

52.216-6, 52.216-16, 52.216-17, 52.222-1, 52.236-21, 52.244-2(i),

52.246-23, 52.246-24, and 52.246-25.

Item XIII--Collection of FASA-Related Information Within the Federal

Procurement Data System (FAR Case 95-310)

This final rule amends the FAR to change the Standard Form 279,

Federal Procurement Data System (FPDS)--Individual Contract Action

Report, and Standard Form 281, Federal Procurement Data System (FPDS)--

Summary Contract Action Report ($25,000 or Less), to incorporate new

information categories required by the Federal Acquisition Streamlining

Act of 1994.

Item XIV--Technical Amendments

These technical amendments have been made to correct typographical

errors, FAR citations, and clause dates.

Dated: December 11, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Federal Acquisition Circular

Number 90-43

Federal Acquisition Circular (FAC) 90-43 is issued under the

authority of the Secretary of Defense, the Administrator of General

Services, and the Administrator for the National Aeronautics and Space

Administration.

FAR cases 96-601, 93-308, 95-307, 96-328, 95-310, 95-028 and 96-003

are effective December 20, 1996. FAR case 96-310 is effective January

1, 1997. FAR cases 96-004, 93-024, 92-613, 95-003 and 92-035 are

effective February 18, 1997.

Dated: December 10, 1996.

Eleanor R. Spector,

Director, Defense Procurement.

Dated: December 10, 1996.

Ada M. Ustad,

Deputy Associate Administrator, Office of Acquisition Policy.

Dated: December 10, 1996.

Tom Luedtke,

Deputy Associate Administrator for Procurement, National Aeronautics

and Space Administration.

[FR Doc. 96-32000 Filed 12-19-96; 8:45 am]

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DEPARTMENT OF DEFENSE

48 CFR Parts 1, 9, 14, 19, 22, 33, and 52

[FAC 90-43, FAR Case 96-601, Item I]

RIN 9000-AH31

Federal Acquisition Regulation; FASA and the Walsh-Healey Public

Contracts Act

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comment.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed to an interim rule amending

the Federal Acquisition Regulation (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. Section 7201 of the Federal

Acquisition Streamlining Act of 1994 (Public Law 103-355) amended the

Walsh-Healey Public Contracts Act to repeal the ``manufacturer'' or

``regular dealer'' requirement. This regulatory action was not subject

to Office of Management and Budget review under Executive Order 12866,

dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

DATES: Effective Date: December 20, 1996.

Comment Date: Comments should be submitted to the FAR Secretariat

at the address shown below on or before February 18, 1997 to be

considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to:

General Services Administration, FAR Secretariat (MVRS), 18th & F

Streets, NW, Room 4035, Attn: Ms. Beverly Fayson, Washington, DC 20405.

Please cite FAC 90-43, FAR case 96-601, in all correspondence related

to this case.

FOR FURTHER INFORMATION CONTACT: Mr. Jack O'Neill at (202) 501-3856 in

reference to this FAR case. For general information, contact the FAR

Secretariat, Room 4035, GS Building, Washington, DC 20405 (202) 501-

4755. Please cite FAC 90-43, FAR case 96-601.

SUPPLEMENTARY INFORMATION:

A. Background

On August 5, 1996 (61 FR 40714), the Department of Labor (DOL)

published a final rule implementing the changes

[[Page 67410]]

made by the Federal Acquisition Streamlining Act of 1994 (FASA) to the

Walsh-Healey Public Contracts Act (PCA). The FAR is being revised at

this time, consistent with the DOL final rule.

B. Regulatory Flexibility Act

The interim rule is not expected to 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, et seq., because the rule

merely amends the FAR to conform to revisions to DOL regulations

reflecting repeal of the ``manufacturer'' and ``regular dealer''

requirements under the PCA. DOL has determined that the revisions to

its regulations will not have a significant economic impact on a

substantial number of small entities. Accordingly, these conforming FAR

amendments are not expected to have a significant economic impact. An

Initial Regulatory Flexibility Analysis has, therefore, not been

performed. Comments are invited from small businesses and other

interested parties. Comments from small entities concerning the

affected FAR parts also will be considered in accordance with 5 U.S.C.

610. Such comments must be submitted separately and cite 5 U.S.C 601,

et seq. (FAR case 96-601), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

D. Determination to Issue an Interim Rule

A determination has been made under the authority of the Secretary

of Defense (DOD), the Administrator of General Services (GSA), and the

Administrator of the National Aeronautics and Space Administration

(NASA) that urgent and compelling reasons exist to promulgate this

interim rule without prior opportunity for public comment, because

implementation of this change is required by Section 7201 of the

Federal Acquisition Streamlining Act of 1994 and Department of Labor

regulations. However, pursuant to Public Law 98-577 and FAR 1.501,

public comments received in response to this interim rule will be

considered in the formulation of the final rule.

List of Subjects in 48 CFR Parts 1, 9, 14, 19, 22, 33, and 52

Government procurement.

Dated: December 11, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 1, 9, 14, 19, 22, 33, and 52 are amended as

set forth below:

1. The authority citation for 48 CFR Parts 1, 9, 14, 19, 22, 33,

and 52 continues to read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM

1.106 [Amended]

2. The table in section 1.106 is amended under the ``FAR Segment''

and ``OMB Control Number'' columns by removing the entry for ``22.606-

2(b)''.

PART 9--CONTRACTOR QUALIFICATIONS

9.103 [Amended]

3. Section 9.103 paragraph (b) is amended in the third sentence by

removing ``and Determinations of Eligibility''.

9.104-1 [Amended]

4. Section 9.104-1 is amended in paragraphs (a), (e), and (f) by

revising the citation ``9.104-3(b)'' to read ``9.104-3(a)''; and in

paragraph (c) by revising the citation ``9.104-3(c)'' to read ``9.104-

3(b)''.

9.104-3 [Amended]

5. Section 9.104-3 is amended by removing paragraph (a), and by

redesignating paragraphs (b) through (e) as (a) through (d),

respectively.

9.702 [Amended]

6. Section 9.702 is amended by removing paragraph (d), and by

redesignating paragraphs (e) and (f) as (d) and (e), respectively.

PART 14--SEALED BIDDING

14.205-1 [Amended]

7. Section 14.205-1(d)(2) is amended by removing ``(the

manufacturer or regular dealer)''.

PART 19--SMALL BUSINESS PROGRAMS

19.001 [Amended]

8. Section 19.001 is amended by removing the definition for

``Determination of eligibility''.

19.102 [Amended]

9. Section 19.102(f)(1) is amended by removing the fifth sentence,

and in the last sentence by removing ``regular dealer'' and inserting

``nonmanufacturer'' in its place.

Subpart 19.6--Certificates of Competency

10. The subpart heading for Subpart 19.6 is revised to read as set

forth above.

19.601 [Amended]

11. Section 19.601 is amended by removing paragraph (c) and by

redesignating paragraph (d) as (c).

19.803 [Amended]

12. Section 19.803(a)(3) is amended by removing the last sentence.

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

22.601 [Reserved]

13. Section 22.601 is removed and reserved.

14. Section 22.602 is revised to read as follows:

22.602 Statutory requirements.

Except for the exemptions at 22.604, all contracts subject to the

Walsh-Healey Public Contracts Act (the Act) (41 U.S.C. 35-45) and

entered into by any executive department, independent establishment, or

other agency or instrumentality of the United States, or by the

District of Columbia, or by any corporation (all the stock of which is

beneficially owned by the United States) for the manufacture or

furnishing of materials, supplies, articles, and equipment (referred to

in this subpart as supplies) in any amount exceeding $10,000, shall

include or incorporate by reference the stipulations required by the

Act pertaining to such matters as minimum wages, maximum hours, child

labor, convict labor, and safe and sanitary working conditions.

22.604-2 [Amended]

15. Section 22.604-2 is amended by removing paragraph (b) and by

redesignating paragraph (c) as (b).

22.606 [Reserved]

22.606-1 and 22.606-2 [Removed]

16. Section 22.606 and subsections 22.606-1 and 22.606-2 are

removed and 22.606 is reserved.

22.607 [Reserved]

17. Section 22.607 is removed and reserved.

18. Section 22.608 is revised to read as follows:

[[Page 67411]]

22.608 Procedures.

(a) Award. When a contract subject to the Act is awarded, the

contracting officer, in accordance with regulations or instructions

issued by the Secretary of Labor and individual agency procedures,

shall furnish to the contractor DOL publication WH-1313, Notice to

Employees Working on Government Contracts.

(b) Breach of stipulation. In the event of a violation of a

stipulation required under the Act, the contracting officer shall, in

accordance with agency procedures, notify the appropriate regional

office of the DOL, Wage and Hour Division (see 22.609), and furnish any

information available.

22.608-1 through 22.608-6 [Removed]

19. Subsections 22.608-1 through 22.608-6 are removed.

22.609 [Amended]

20.-21. Section 22.610 is revised to read as follows:

22.610 Contract clause.

The contracting officer shall insert the clause at 52.222-20,

Walsh-Healey Public Contracts Act, in solicitations and contracts

covered by the Act (see 22.603, 22.604, and 22.605).

PART 33--PROTESTS, DISPUTES, AND APPEALS

22. Section 33.102(a) is amended by revising the last sentence to

read as follows:

33.102 General.

(a) * * * (See 19.302 for protests of small business status.)

* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

52.219-14 [Amended]

23. Section 52.219-14 is amended by revising the clause date to

read ``(DEC 1996)'' and in paragraph (b)(2) by removing ``regular

dealer in'' and inserting ``nonmanufacturer of'' in its place.

52.222-19 [Reserved]

24. Section 52.222-19 is removed and reserved.

52.222-20 [Amended]

25. Section 52.222-20 is amended in the introductory text by

revising ``22.610(b)'' to read ``22.610'', by revising the clause date

to read ``(DEC 1996)'', and in paragraph (a) by twice removing

``representations and''.

[FR Doc. 96-32001 Filed 12-19-96; 8:45 am]

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DEPARTMENT OF DEFENSE

48 CFR Part 1

[FAC 90-43; FAR Case 96-004; Item II]

RIN 9000-AH32

Federal Acquisition Regulation; Individual and Class Deviations

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed on a final rule to amend

the Federal Acquisition Regulation (FAR) to eliminate the requirements

for all agencies to submit copies of approved individual deviations to

the FAR Secretariat, and for DOD and NASA to submit copies of approved

class deviations to the FAR Secretariat. This regulatory action was not

subject to Office of Management and Budget review under Executive Order

12866, dated September 30, 1993, and is not a major rule under 5 U.S.C.

804.

EFFECTIVE DATE: February 18, 1997.

FOR FURTHER INFORMATION CONTACT: Mr. Jack O'Neill at (202) 501-3856 in

reference to this FAR case. For general information, contact the FAR

Secretariat, Room 4035, GS Building, Washington, DC 20405 (202) 501-

4755. Please cite FAC 90-43, FAR case 96-004.

SUPPLEMENTARY INFORMATION:

A. Background

DOD and NASA monitor approved deviations to the FAR and recommend

revisions to the regulation as appropriate. Accordingly, collection of

their deviations by the FAR Secretariat is no longer considered

necessary. Furthermore, collection of individual deviations approved by

all agencies is no longer considered necessary and is being deleted

from the regulation.

B. Regulatory Flexibility Act

The final rule does not constitute a significant FAR revision

within the meaning of FAR 1.501 and Public Law 98-577, and publication

for public comments is not required. Therefore, the Regulatory

Flexibility Act does not apply. However, comments from small entities

concerning the affected FAR part will be considered in accordance with

5 U.S.C. 610. Such comments must be submitted separately and cite 5

U.S.C. 601, et seq. (FAC 90-43, FAR case 96-004), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 1

Government procurement.

Dated: December 11, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Part 1 is amended as set forth below:

PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM

1. The authority citation for 48 CFR Part 1 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

2. Section 1.403 is amended by revising the last sentence to read

as follows:

1.403 Individual deviations.

* * * The justification and agency approval shall be documented in

the contract file.

3. Section 1.404 is amended by revising the last sentence of the

introductory text to read as follows:

1.404 Class deviations.

* * * For civilian agencies other than NASA, a copy of each

approved class deviation shall be furnished to the FAR Secretariat.

* * * * *

4. Section 1.405 is amended by revising paragraphs (d) and (e) to

read as follows:

1.405 Deviations pertaining to treaties and executive agreements.

* * * * *

(d) For civilian agencies other than NASA, a copy of the text

deviation authorized under paragraph (b) or (c) of this section shall

be transmitted to the FAR Secretariat through a central agency control

point.

(e) For civilian agencies other than NASA, if a deviation required

to comply with a treaty or an executive agreement is not authorized by

paragraph (b) or (c) of this section, then the request for deviation

shall be processed through the FAR Secretariat to the Civilian Agency

Acquisition Council.

[FR Doc. 96-32002 Filed 12-19-96; 8:45 am]

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DEPARTMENT OF DEFENSE

48 CFR Parts 4, 52, and 53

[FAC 90-43, FAR Case 95-307, Item III]

RIN 9000-AH33

Federal Acquisition Regulation; Use of Data Universal Numbering

System as Primary Contractor Identification

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comment.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed to an interim rule which

amends the FAR by adding a new solicitation provision at 52.204-6, and

by revising Standard Forms 294 and 295, to replace the Contractor

Establishment Code (CEC) with the Data Universal Numbering System

(DUNS) number as the means of identifying contractors in the Federal

Procurement Data System. This regulatory action was not subject to

Office of Management and Budget (OMB) review under Executive Order

12866, dated September 30, 1993, and is not a major rule under 5 U.S.C.

804.

DATES: Effective Date: December 20, 1996.

Comment Date: Comments should be submitted to the FAR Secretariat

at the address shown below on or before February 18, 1997 to be

considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to:

General Services Administration, FAR Secretariat (MVRS), 18th & F

Streets, NW, Room 4035, Attn: Ms. Beverly Fayson, Washington, DC 20405.

Please cite FAC 90-43, FAR case 95-307, in all correspondence related

to this case.

FOR FURTHER INFORMATION CONTACT: Ms. Linda Klein at (202) 501-3775 in

reference to this FAR case. For general information, contact the FAR

Secretariat, Room 4035, GS Building, Washington, DC 20405 (202) 501-

4755. Please cite FAC 90-43, FAR case 95-307.

SUPPLEMENTARY INFORMATION:

A. Background

This interim rule amends FAR Parts 4, 52, and 53 (i.e., block 2 of

Standard Form (SF) 294, Subcontracting Report for Individual Contracts,

and SF 295, Summary Subcontract Report). Federal agencies report data

to the Federal Procurement Data Center, which collects, processes, and

disseminates official statistical data on Federal contracting.

B. Regulatory Flexibility Act

The interim rule is not expected to 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, et seq., because the rule

merely replaces the CEC with the DUNS number to identify contractors in

the Federal Procurement Data System. It is estimated that it will take

each contractor only 5 minutes to request a DUNS number from Dun and

Bradstreet. An Initial Regulatory Flexibility Analysis has, therefore,

not been performed. Comments are invited from small businesses and

other interested parties. Comments from small entities concerning the

affected FAR parts also will be considered in accordance with 5 U.S.C.

610. Such comments must be submitted separately and cite 5 U.S.C. 601,

et seq. (FAR case 95-307), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act (Pub. L. 96-511) is deemed to apply

because the interim rule contains information collection requirements.

Contractors will now have to obtain/report a contractor identification

number (i.e., DUNS number). Accordingly, a request for approval of a

new information collection requirement has been submitted to the Office

of Management and Budget under 44 U.S.C. 3501, et seq.

D. Determination To Issue an Interim Rule

A determination has been made under the authority of the Secretary

of Defense (DOD), the Administrator of General Services (GSA), and the

Administrator of the National Aeronautics and Space Administration

(NASA) that urgent and compelling reasons exist to promulgate this

interim rule without prior opportunity for public comment. The Federal

Procurement Data System (FPDS) reporting requirements are currently

being revised to conform to the requirements of Section 10004 of the

Federal Acquisition Streamlining Act of 1994 (FASA). This rule

implements a determination made by the Office of Federal Procurement

Policy to use the DUNS number for FPDS reporting purposes in place of

the CEC and to identify vendors in the Federal Acquisition Computer

Network (FACNET) vendor registration database. Agencies may begin

reporting the DUNS number with FY 1996 first quarter submissions to the

Federal Procurement Data Center. For this reason, and because of the

interrelationship of this revision and the FASA-related changes to the

FPDS, publication of an interim rule is considered necessary. However,

pursuant to Pub. L. 98-577 and FAR 1.501, public comments received in

response to this interim rule will be considered in the formulation of

the final rule.

List of Subjects in 48 CFR Parts 4, 52, and 53

Government procurement.

Dated: December 11, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 4, 52, and 53 are amended as set forth

below:

1. The authority citation for 48 CFR Parts 4, 52, and 53 continues

to read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

PART 4--ADMINISTRATIVE MATTERS

2. Section 4.602(d) is revised to read as follows:

4.602 Federal Procurement Data System.

* * * * *

(d) The contracting officer shall report a Contractor

Identification Number for each successful offeror. A Data Universal

Numbering System (DUNS) number, which is a nine-digit number assigned

by Dun and Bradstreet Information Services to an establishment, is the

Contractor Identification Number for Federal contractors. The DUNS

number reported must identify the successful offeror's name and address

exactly as stated in the offer and resultant contract. The contracting

officer shall ask the offeror to provide its DUNS number by using the

provision prescribed at 4.603(a). If the successful offeror does not

provide its number, the contracting officer shall contact the offeror

and obtain the DUNS number.

3. Section 4.603 is revised to read as follows:

4.603 Solicitation provisions.

(a) The contracting officer shall insert the provision at 52.204-6,

Contractor Identification Number--Data Universal Numbering System

(DUNS) Number, in solicitations that are expected to result in a

requirement for the generation of an SF 279, Federal Procurement Data

System (FPDS)--Individual Contract Action Report (see 4.602(c)), or

similar agency form.

(b) The contracting officer shall insert the provision at 52.204-5,

Women-Owned Business, in all solicitations that are not set aside for

small business concerns and that exceed the simplified acquisition

threshold, when the contract

[[Page 67413]]

is to be performed inside the United States, its territories or

possessions, Puerto Rico, the Trust Territory of the Pacific Islands,

or the District of Columbia.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

4. Section 52.204-5, introductory text, is revised to read as

follows:

52.204-5 Women-Owned Business.

As prescribed in 4.603(b), insert the following provision:

* * * * *

5. Section 52.204-6 is added to read as follows:

52.204-6 Contractor Identification Number--Data Universal Numbering

System (DUNS) Number.

As prescribed in 4.603(a), insert the following provision:

CONTRACTOR IDENTIFICATION NUMBER--DATA UNIVERSAL NUMBERING SYSTEM

(DUNS) NUMBER (DEC 1996)

(a) Contractor Identification Number, as used in this provision,

means ``Data Universal Numbering System (DUNS) number,'' which is a

nine-digit number assigned by Dun and Bradstreet Information

Services.

(b) Contractor identification is essential for complying with

statutory contract reporting requirements. Therefore, the offeror is

requested to enter, in the block with its name and address on the

Standard Form 33 or similar document, the annotation ``DUNS''

followed by the DUNS number which identifies the offeror's name and

address exactly as stated in the offer.

(c) If the offeror does not have a DUNS number, it should

contact Dun and Bradstreet directly to obtain one. A DUNS number

will be provided immediately by telephone at no charge to the

offeror. For information on obtaining a DUNS number, the offeror

should call Dun and Bradstreet at 1-800-333-0505. The offeror should

be prepared to provide the following information:

(1) Company name.

(2) Company address.

(3) Company telephone number.

(4) Line of business.

(5) Chief executive officer/key manager.

(6) Date the company was started.

(7) Number of people employed by the company.

(8) Company affiliation.

(d) Offerors located outside the United States may obtain the

location and phone number of the local Dun and Bradstreet

Information Services office from the Internet Home Page at http://

www.dbisna.com/dbis/customer/custlist.htm. If an offeror is unable

to locate a local service center, it may send an e-mail to Dun and

Bradstreet at globalinfo@dbisma.com.

(End of provision)

PART 53--FORMS

53.219 [Amended]

6. Section 53.219 is amended in paragraphs (a) and (b) by revising

``(Rev Oct 1995)'' to read ``(REV. 10/96)''.

7. Section 53.301-294 is revised to read as follows:

53.301-294 Subcontracting Report for Individual Contracts

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[[Page 67414]]

[GRAPHIC] [TIFF OMITTED] TR20DE96.000

[[Page 67415]]

[GRAPHIC] [TIFF OMITTED] TR20DE96.001

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[[Page 67416]]

8. Section 53.301-295 is revised to read as follows:

53.301-295 Summary Subcontract Report

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[GRAPHIC] [TIFF OMITTED] TR20DE96.002

[[Page 67417]]

[GRAPHIC] [TIFF OMITTED] TR20DE96.003

[FR Doc. 96-32003 Filed 12-19-96; 8:45 am]

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[[Page 67418]]

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DEPARTMENT OF DEFENSE

48 CFR Part 12

[FAC 90-43; FAR Case 96-310; Item IV]

RIN 9000-AH01

Federal Acquisition Regulation; Inapplicability of Cost

Accounting Standards to Contracts and Subcontracts for Commercial Items

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed on a final rule to amend

the Federal Acquisition Regulation (FAR) to implement Section 4205 of

the Clinger-Cohen Act of 1996 (Public Law 104-106) (formerly the

Federal Acquisition Reform Act (FARA)). Section 4205 amends Section

26(f) of the Office of Federal Procurement Policy (OFPP) Act (41 U.S.C.

422(f)) by noting the current applicability of Cost Accounting

Standards (CAS) to contracts and subcontracts for commercial items.

This regulatory action was not subject to Office of Management and

Budget review under Executive Order 12866, dated September 30, 1993,

and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: January 1, 1997.

FOR FURTHER INFORMATION CONTACT: Mr. Jeremy Olson at (202) 501-3221 in

reference to this FAR case. For general information, contact the FAR

Secretariat, Room 4035, GS Building, Washington, DC 20405 (202) 501-

4755. Please cite FAC 90-43, FAR case 96-310.

SUPPLEMENTARY INFORMATION:

A. Background

This final rule amends FAR Part 12 to implement Section 4205 of the

Clinger-Cohen Act of 1996 (Public Law 104-106). Section 4205 amends

Section 26(f) of the OFPP Act (41 U.S.C. 422(f)), making the

application of CAS to commercial items ``nonmandatory''. Therefore, the

new coverage at FAR 12.214 indicates that CAS generally will not apply

to commercial items unless so indicated at 48 CFR 9903.201. A cross-

reference to FAR 12.214 is added at 12.503(c) and 12.504(c), to further

clarify the effect of Section 4205.

A proposed rule was published in the Federal Register on June 21,

1996 (61 FR 32312). Three sources submitted comments in response to the

proposed rule. All comments were considered in the development of the

final rule.

B. Regulatory Flexibility Act

The Department of Defense, the General Services Administration, and

the National Aeronautics and Space Administration certify that this

final rule will not 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, et seq., because contracts and

subcontracts with small businesses are exempt from Cost Accounting

Standards requirements.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 12

Government procurement.

Dated: December 11, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Part 12 is amended as set forth below:

PART 12--ACQUISITION OF COMMERCIAL ITEMS

1. The authority citation for 48 CFR Part 12 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

2. Section 12.214 is added to read as follows:

12.214 Cost Accounting Standards.

Cost Accounting Standards (CAS) generally will not apply to

commercial items. If CAS does apply pursuant to 48 CFR 9903.201 (FAR

Appendix B), the contracting officer shall insert the appropriate

provisions and clauses as prescribed in that section.

3. Section 12.503(c)(3) is revised to read as follows:

12.503 Applicability of certain laws to Executive agency contracts for

the acquisition of commercial items.

* * * * *

(c) * * *

(3) 41 U.S.C. 422, Cost Accounting Standards (48 CFR chapter 99)

(see 12.214).

* * * * *

4. Section 12.504(c)(3) is revised to read as follows:

12.504 Applicability of certain laws to subcontracts for the

acquisition of commercial items.

* * * * *

(c) * * *

(3) 41 U.S.C. 422, Cost Accounting Standards (48 CFR chapter 99)

(see 12.214).

[FR Doc. 96-32004 Filed 12-19-96; 8:45 am]

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DEPARTMENT OF DEFENSE

48 CFR Parts 16 and 52

[FAC 90-43; FAR Case 93-024; Item V]

RIN 9000-AG74

Federal Acquisition Regulation; Allowable Cost and Payment Clause

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed on a final rule to amend

the Federal Acquisition Regulation (FAR) to clarify that reimbursement

of subcontract costs under cost-type contracts generally will not be

made to a large business contractor until the contractor has made

payment to the subcontractor. This regulatory action was not subject to

Office of Management and Budget review under Executive Order 12866,

dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: February 18, 1997.

FOR FURTHER INFORMATION CONTACT: Mr. Jeremy Olson at (202) 501-3221 in

reference to this FAR case. For general information, contact the FAR

Secretariat, Room 4035, GS Building, Washington, DC 20405 (202) 501-

4755. Please cite FAC 90-43, FAR case 93-024.

SUPPLEMENTARY INFORMATION:

A. Background

The Office of Federal Procurement Policy SWAT Team on Civilian

Agency Contracting, in its report of December 3, 1992, entitled

``Improving Contracting Practices and Management Controls on Cost-Type

Federal Contracts'', recommended several FAR revisions which were

viewed to have Government-wide benefit. One area identified for

clarification was the payment provisions in FAR clauses 52.216-7,

Allowable Cost and Payment, and 52.232-7, Payments under Time-and-

Materials and Labor-Hour

[[Page 67419]]

Contracts. The SWAT team concluded that these clauses did not clearly

convey the Government's intent that payments to subcontractors by large

business prime contractors were not billable to the Government until

the contractor had actually paid the subcontractors.

This final rule amends FAR 52.216-7, Allowable Cost and Payment,

and FAR 52.232-7, Payments under Time-and-Materials and Labor-Hour

Contracts, to clarify that payments to subcontractors by large business

prime contractors are not billable until the contractors have actually

paid the subcontractors. The rule exempts, however, contractors who are

awarded construction contracts that include the clauses at FAR 52.216-

7, Allowable Cost and Payment, and FAR 52.232-27, Prompt Payment for

Construction Contracts. Alternate I of FAR 52.216-7 provides for

reimbursement of construction prime contractors for subcontract costs

prior to the subcontractors actually being paid, as long as the prime

contractor has included a provision in its subcontracts that requires

that the subcontractor be paid within seven days of the prime

contractor's receipt of payment from the Government.

A proposed rule was published in the Federal Register on December

21, 1995 (60 FR 66472). Five sources submitted public comments. All

comments were considered in developing the final rule.

B. Regulatory Flexibility Act

The Department of Defense, the General Services Administration, and

the National Aeronautics and Space Administration certify that this

final rule will not 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, et seq., because the rule only applies

to large business prime contractors under time-and-materials, labor-

hour, and cost-reimbursement type contracts.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 16 and 52

Government procurement.

Dated: December 11, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 16 and 52 are amended as set forth below:

1. The authority citation for 48 CFR Parts 16 and 52 continues to

read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

PART 16--TYPES OF CONTRACTS

2. Section 16.307(a) is amended by redesignating the text as

paragraph (a)(1) and adding paragraph (a)(2) to read as follows:

Sec. 16.307 Contract clauses.

(a)(1) * * *

(2) If the contract is a construction contract and contains the

clause at 52.232-27, Prompt Payment for Construction Contracts, the

contracting officer shall use the clause at 52.216-7 with its Alternate

I.

* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

3. Section 52.216-7 is amended by revising the clause date and

paragraph (b)(1)(iii), and by adding Alternate I to read as follows:

52.216-7 Allowable Cost and Payment.

* * * * *

ALLOWABLE COST AND PAYMENT (FEB 1997)

* * * * *

(b) * * *

(1) * * *

(iii) The amount of progress and other payments that have been

paid by cash, check, or other form of payment to the Contractor's

subcontractors under similar cost standards.

* * * * *

(End of clause)

Alternate I (FEB 1997). As prescribed in 16.307(a)(2),

substitute the following paragraph (b)(1)(iii) for paragraph

(b)(1)(iii) of the basic clause:

(iii) The amount of progress and other payments to the

Contractor's subcontractors that either have been paid, or that the

Contractor is required to pay pursuant to the clause of this

contract entitled ``Prompt Payment for Construction Contracts.''

Payments shall be made by cash, check, or other form of payment to

the Contractor's subcontractors under similar cost standards.

4. Section 52.232-7 is amended by revising the clause date and the

second sentence of paragraph (b)(2) to read as follows:

Sec. 52.232-7 Payments under Time-and-Materials and Labor-Hour

Contracts.

* * * * *

PAYMENTS UNDER TIME-AND-MATERIALS AND LABOR-HOUR CONTRACTS (FEB 1997)

* * * * *

(b) * * *

(2) * * * Reimbursable costs in connection with subcontracts

shall be limited to the amounts paid to the subcontractor for items

and services purchased directly for the contract only when cash,

checks, or other form of payment has been made for such purchased

items or services; however, this requirement shall not apply to a

Contractor that is a small business concern.* * *

* * * * *

[FR Doc. 96-32005 Filed 12-19-96; 8:45 am]

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DEPARTMENT OF DEFENSE

48 CFR Parts 19 and 52

[FAC 90-43; FAR Case 93-308; Item VI]

RIN 9000-AG70

Federal Acquisition Regulation; Mentor Protege Program

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

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

ACTION: Interim rule adopted as final with a change.

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed on a final rule continuing

an interim rule which amended the FAR. The interim rule published as

Item X of FAC 90-37 is finalized with minor clarifying revisions. This

final rule permits a mentor firm under the DOD Pilot Mentor-Protege

Program to be granted credit toward subcontracting goals for certain

costs incurred in providing developmental assistance to its Proteg3

firms and to award subcontracts on a noncompetitive basis to its

Protege firms. This regulatory action was not subject to Office of

Management and Budget review under Executive Order 12866, dated

September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: February 18, 1997.

FOR FURTHER INFORMATION CONTACT: Ms. Linda Klein at (202) 501-3775 in

reference to this FAR case. For general information, contact the FAR

Secretariat, Room 4035, GS Building, Washington, DC 20405 (202) 501-

4755. Please cite FAC 90-43, FAR case 93-308.

SUPPLEMENTARY INFORMATION:

A. Background

This rule implements Section 814(c) of Public Law 102-190, which

amended

[[Page 67420]]

the Small Business Act at 15 U.S.C. 637(d)(11) to authorize certain

costs incurred by mentor firms under the DOD Pilot Mentor-Protege

Program to be credited toward subcontracting goals for awards to small

disadvantaged businesses. This rule also further implements Section

831(f)(2) of Public Law 101-510, which permits mentor firms to award

subcontracts on a noncompetitive basis to its Proteges under DOD or

other contracts. An interim rule was published in the Federal Register

on January 26, 1996 (61 FR 2637). One comment was received in response

to the interim rule. As a result, in the second sentence of 19.702(d),

the word ``firms'' was revised to read ``Protege agreement'', and the

address and telephone number were corrected. The clause at 52.244-5 is

adopted as final without change.

B. Regulatory Flexibility Act

The Department of Defense, the General Services Administration, and

the National Aeronautics and Space Administration certify that this

final rule will not 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, et seq., because the rule only applies

to participants in the DOD Pilot Mentor-Protege Program. Presently,

approximately 100 mentor firms and 240 protege firms are enrolled in

the program.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 19 and 52

Government procurement.

Dated: December 11, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Accordingly, the interim rule amending 48 CFR Parts 19 and 52 and

published at 61 FR 2637, January 26, 1996, is adopted as a final rule

with the following changes:

1. The authority citation for 48 CFR Parts 19 and 52 continues to

read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

PART 19-SMALL BUSINESS PROGRAMS

2. Section 19.702 is amended by revising the last sentence of

paragraph (d) to read as follows:

Sec. 19.702 Statutory requirement.

* * * * *

(d) * * * However, the mentor-Protege agreement must have been

approved by the Office of Small and Disadvantaged Business Utilization,

Office of the Deputy Under Secretary of Defense (International and

Commercial Programs) DUSD(I&CP)SADBU, Room 2A338, 3061 Defense

Pentagon, Washington, DC 20301-3061, (703) 697-9383, before

developmental assistance costs may be credited against subcontract

goals.

PART 52-SOLICITATION PROVISIONS AND CONTRACT CLAUSES

Sec. 52.244-5 [Amended]

3. The clause date for 52.244-5 is revised to read ``(DEC 1996)''.

[FR Doc. 96-32006 Filed 12-19-96; 8:45 am]

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DEPARTMENT OF DEFENSE

48 CFR Parts 19 and 52

[FAC 90-43, FAR Case 95-028, Item VII]

RIN 9000-AH34

Federal Acquisition Regulation; Minority Small Business and

Capital Ownership

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comment.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed to an interim rule that

amends the Federal Acquisition Regulation (FAR) to reflect changes to

the Small Business Administration's (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. This

regulatory action was not subject to Office of Management and Budget

review under Executive Order 12866, dated September 30, 1993, and is

not a major rule under 5 U.S.C. 804.

DATES: Effective Date: December 20, 1996.

Comment Date: Comments should be submitted to the FAR Secretariat

at the address shown below on or before February 18, 1997 to be

considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to:

General Services Administration, FAR Secretariat (MVRS), 18th & F

Streets, NW, Room 4035, Attn: Ms. Beverly Fayson, Washington, DC 20405.

Please cite FAC 90-43, FAR case 95-028, in all correspondence

related to this case.

FOR FURTHER INFORMATION CONTACT: Ms. Linda Klein at (202) 501-3775 in

reference to this FAR case. For general information, contact the FAR

Secretariat, Room 4035, GS Building, Washington, DC 20405 (202) 501-

4755. Please cite FAC 90-43, FAR case 95-028.

SUPPLEMENTARY INFORMATION:

A. Background

On June 7, 1995, SBA published changes in their regulations at 13

CFR Parts 121 and 124, which cover the Minority Small Business and

Capital Ownership Development Program (60 FR 29969). As a result of

these modifications, the FAR has some inconsistencies regarding who is

eligible for a particular 8(a) procurement. Amended FAR sections

include: 19.801, 19.804-2, 19.804-3, 19.805-1, 19.805-2, 19.808-1,

19.809, 19.811-1, 19.811-3, 52.219-1, 52.219-11 (Alternate I), 52.219-

12 (Alternate I), 52.219-17, and 52.219-18 (Alternate II).

B. Regulatory Flexibility Act

This interim rule is not expected to 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, et seq. This rule does

not impose any new requirements on contractors. The rule amends the FAR

to reflect changes at 13 CFR 121 and 124 designed to streamline the

operation of the 8(a) program and to ease certain restrictions

perceived to be burdensome on Program Participants. The FAR is changed

to eliminate inconsistencies with respect to who is eligible for

particular 8(a) procurements; to eliminate obsolete definitions; and to

eliminate coverage on certain aspects of the 8(a) program that are

obsolete. An Initial Regulatory Flexibility Analysis has, therefore,

not been performed. Comments are invited from small businesses and

other interested parties. Comments from small entities concerning the

affected FAR parts also will be considered in accordance with 5 U.S.C.

610. Such comments must be submitted separately and cite 5 U.S.C

[[Page 67421]]

601, et seq. (FAR case 95-028), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

D. Determination To Issue an Interim Rule

A determination has been made under the authority of the Secretary

of Defense (DOD), the Administrator of General Services (GSA), and the

Administrator of the National Aeronautics and Space Administration

(NASA) that urgent and compelling reasons exist to promulgate this

interim rule without prior opportunity for public comment. This action

is necessary in order to implement the changes in the Small Business

Administration (SBA) Minority Small Business and Capital Ownership

Development Program that are applicable for all 8(a) requirements

accepted by the SBA on or after August 7, 1995. However, pursuant to

Public Law 98-577 and FAR 1.501, public comments received in response

to this interim rule will be considered in the formulation of the final

rule.

List of Subjects in 48 CFR Parts 19 and 52

Government procurement.

Dated: December 11, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 19 and 52 are amended as set forth below:

1. The authority citation for 48 CFR Parts 19 and 52 continues to

read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

PART 19--SMALL BUSINESS PROGRAMS

19.801 [Reserved]

2. Section 19.801 is removed and reserved.

3. Section 19.804-2 is amended by revising paragraph (b) and adding

(c) to read as follows:

19.804-2 Agency offering.

* * * * *

(b)(1) An agency offering a construction requirement should submit

it to the SBA District Office for the geographical area where the work

is to be performed.

(2) Sole source requirements, other than construction, should be

forwarded directly to the district office that services the nominated

firm. If the contracting officer is not nominating a specific firm, the

offering letter should be sent to SBA Headquarters, Office of Minority

and Capital Ownership Development, 409 3rd Street, SW, Washington, DC

20416.

(c) In order to ensure consistency and uniformity, all requirements

for 8(a) competition shall be offered to and processed by the Division

of Business Development, SBA Headquarters. All requirements, including

construction, shall be synopsized in the Commerce Business Daily by the

cognizant procuring agency. For construction, the synopsis shall

include the geographical area of the competition as determined by the

Assistant Administrator, Division of Business Development, in

consultation with the local SBA district office where the work is to be

performed.

19.804-3 [Amended]

4. Section 19.804-3 is amended by removing paragraph (c).

5. Section 19.805-1 is amended by redesignating paragraph (c) as

(d) and revising the last sentence, and by adding a new paragraph (c).

The added and revised text reads as follows:

19.805-1 General.

* * * * *

(c) A proposed 8(a) requirement with an estimated value exceeding

the applicable competitive threshold amount shall not be divided into

several requirements for lesser amounts in order to use 8(a) sole

source procedures for award to a single firm.

(d) * * * Agency recommendations for competition below the

threshold may be included in the offering letter or may be submitted by

separate correspondence to the SBA Headquarters.

6. Section 19.805-2 is amended by revising the introductory text of

paragraph (c) to read as follows:

19.805-2 Procedures.

* * * * *

(c) The SBA will determine the eligibility of the firms for award

of the contract. Eligibility will be determined by the SBA as of the

time of submission of initial offers which include price. Eligibility

is based on Section 8(a) Program criteria.

* * * * *

7. Section 19.808-1(b) is revised to read as follows:

19.808-1 Sole source.

* * * * *

(b) The SBA should participate, whenever practicable, in

negotiating the contracting terms. When mutually agreeable, the SBA may

authorize the contracting activity to negotiate directly with the 8(a)

contractor. Whether or not direct negotiations take place, the SBA is

responsible for approving the resulting contract before award.

8. Section 19.809 is amended by revising the fourth sentence to

read as follows:

19.809 Preaward considerations.

* * * Within 15 working days of the receipt of the referral or a

longer period agreed to by the SBA and the contracting activity, the

SBA local district office that services the 8(a) firm will advise the

contracting officer as to the SBA's willingness to certify its

competency to perform the contract using the 8(a) concern in question

as its subcontractor. * * *

19.811-1 [Amended]

9. Section 19.811-1 is amended by removing paragraph (b)(5).

10. Section 19.811-3 is amended by revising paragraphs (a), (b),

and (d)(1); by removing (d)(2); and by redesignating (d)(3) as (d)(2),

and in newly-designated (d)(2) by revising ``Alternate III'' to read

``Alternate II''. The revised text reads as follows:

19.811-3 Contract clauses.

(a) The contracting officer shall insert the clause at 52.219-11,

Special 8(a) Contract Conditions, in contracts between the SBA and the

agency when the acquisition is accomplished using the procedures of

19.811-1(a) and (b).

(b) The contracting officer shall insert the clause at 52.219-12,

Special 8(a) Subcontract Conditions, in contracts between the SBA and

its 8(a) contractor when the acquisition is accomplished using the

procedures of 19.811-1(a) and (b).

* * * * *

(d) * * *

(1) The clause at 52.219-18 with its Alternate I will be used when

competition is to be limited to 8(a) concerns within one or more

specific SBA districts pursuant to 19.804-2.

* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

11. Section 52.219-1 is amended by revising the provision date, and

in paragraph (c) by adding, in alphabetical order, the definition for

``Joint venture'' to read as follows:

[[Page 67422]]

52.219-1 Small Business Program Representations.

* * * * *

SMALL BUSINESS PROGRAM REPRESENTATIONS (DEC 1996)

* * * * *

(c) Definitions. Joint venture, for purposes of a small

disadvantaged business (SDB) set-aside or price evaluation

preference (as prescribed at 13 CFR 124.321), is a concern that is

owned and controlled by one or more socially and economically

disadvantaged individuals entering into a joint venture agreement

with one or more business concerns and is considered to be

affiliated for size purposes with such other concern(s). The

combined annual receipts or employees of the concerns entering into

the joint venture must meet the applicable size standard

corresponding to the SIC code designated for the contract. The

majority of the venture's earnings must accrue directly to the

socially and economically disadvantaged individuals in the SDB

concern(s) in the joint venture. The percentage of the ownership

involvement in a joint venture by disadvantaged individuals must be

at least 51 percent.

* * * * *

(End of provision)

52.219-11 [Amended]

12. Section 52.219-11 is amended by removing Alternate I.

52.219-12 [Amended]

13. Section 52.219-12 is amended by removing Alternate I.

14. Section 52.219-17 is amended by revising the clause date and by

adding paragraphs (a)(5) and (c) to read as follows:

52.219-17 Section 8(a) Award.

* * * * *

SECTION 8(a) AWARD (DEC 1996)

(a) * * *

(5) That the subcontractor awarded a subcontract hereunder shall

have the right of appeal from decisions of the cognizant Contracting

Officer under the ``Disputes'' clause of the subcontract.

* * * * *

(c) The offeror/subcontractor agrees that it will not

subcontract the performance of any of the requirements of this

subcontract to any lower tier subcontractor without the prior

written approval of the SBA and the cognizant Contracting Officer of

the __________ [insert name of contracting agency].

(End of clause)

52.219-18 [Amended]

15. Section 52.219-18 is amended by removing Alternate II and by

redesignating Alternate III as Alternate II.

[FR Doc. 96-32007 Filed 12-19-96; 8:45 am]

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DEPARTMENT OF DEFENSE

48 CFR Part 19

[FAC 90-43; FAR Case 96-328; Item VIII]

RIN 9000-AH40

Federal Acquisition Regulation; Extension of Small Business

Competitiveness Demonstration Program

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed on a final rule to amend

the Federal Acquisition Regulation (FAR) to implement Section 108 of

the Small Business Programs Improvement Act of 1996 (Public Law 104-

208, Division D). Section 108 extends the Small Business

Competitiveness Demonstration Program (15 U.S.C. 644 note) until

September 30, 1997. This regulatory action was not subject to Office of

Management and Budget review under Executive Order 12866, dated

September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: December 20, 1996.

FOR FURTHER INFORMATION CONTACT: Ms. Victoria Moss at (202) 501-4764 in

reference to this FAR case. For general information, contact the FAR

Secretariat, Room 4035, GS Building, Washington, DC 20405 (202) 501-

4755. Please cite FAC 90-43, FAR case 96-328.

SUPPLEMENTARY INFORMATION:

A. Background

This final rule amends the FAR to extend the Small Business

Competitiveness Demonstration Program through September 30, 1997. The

program consists of two major components: a test of unrestricted

competition in four designated industry groups, and a test of enhanced

small business participation in 10 agency targeted industry categories.

The rule implements section 108, Title I (Amendments to Small Business

Administration Act), of Public Law 104-208. Section 108 was effective

upon enactment (September 30, 1996).

B. Regulatory Flexibility Act

This final rule does not constitute a significant FAR revision

within the meaning of FAR 1.501 and Public Law 98-577, and publication

for public comments is not required. Therefore, the Regulatory

Flexibility Act does not apply. However, comments from small entities

concerning the affected FAR subpart will be considered in accordance

with 5 U.S.C. 610. Such comments must cite 5 U.S.C. 601, et seq. (FAC

90-43, FAR case 96-328), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 19

Government procurement.

Dated: December 11, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Part 19 is amended as set forth below:

PART 19--SMALL BUSINESS PROGRAMS

1. The authority citation for 48 CFR Part 19 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

19.1001 [Amended]

2. Section 19.1001 is amended in the second sentence by revising

the date ``1996'' to read ``1997''.

19.1006 [Amended]

3. Section 19.1006(b)(1) is amended by revising the date ``1996''

to read ``1997''.

[FR Doc. 96-32008 Filed 12-19-96; 8:45 am]

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DEPARTMENT OF DEFENSE

48 CFR Part 31

[FAC 90-43; FAR Case 92-613; Item IX]

RIN 9000-AG85

Federal Acquisition Regulation; Morale, Health, Welfare Costs/

Contractor Overhead Certification

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed on a final rule to amend

the Federal Acquisition Regulation (FAR) cost principle for public

relations and

[[Page 67423]]

advertising costs to eliminate confusion as to which cost principle

governs. This regulatory action was not subject to Office of Management

and Budget review under Executive Order 12866, dated September 30,

1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: February 18, 1997.

FOR FURTHER INFORMATION CONTACT: Mr. Jeremy Olson at (202) 501-3221 in

reference to this FAR case. For general information, contact the FAR

Secretariat, Room 4035, GS Building, Washington, DC 20405 (202) 501-

4755. Please cite FAC 90-43, FAR case 92-613.

SUPPLEMENTARY INFORMATION:

A. Background

The General Accounting Office (GAO), in its report GAO/NSIAD-93-79,

``CONTRACT PRICING: Unallowable Costs Charged to Defense Contracts'',

dated November 20, 1992, recommended that the cost principles at FAR

31.205-1, 31.205-13, and 31.205-14 be revised to eliminate confusion as

to which cost principle was controlling. The December 1992 OMB SWAT

summary report on civilian agency contracting practices also

recommended these cost principles be made more explicit.

Revisions to FAR 31.205-13 and 31.205-14, based on recommendations

of the GAO and OMB SWAT, and implementation of the Federal Acquisition

Streamlining Act of 1994, Public Law 103-355, were published as a final

rule in the Federal Register (60 FR 42662) on August 16, 1995.

This final rule amends the third cost principle cited in the GAO

and the OMB SWAT reports. The rule amends the cost principle at FAR

31.205-1, Public relations and advertising costs, by removing from

paragraph (f)(5) the parenthetical reference to other cost principles

to eliminate any confusion as to which cost principle governs. A

proposed rule was published in the Federal Register on March 29, 1996

(61 FR 14216). Two sources submitted public comments. All comments were

considered in developing the final rule.

B. Regulatory Flexibility Act

The Department of Defense, the General Services Administration, and

the National Aeronautics and Space Administration certify that this

final rule will not 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, et seq., because most contracts awarded

to small entities use simplified acquisition procedures or are awarded

on a competitive, fixed-price basis, and do not require application of

the FAR cost principles.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 31

Government procurement.

Dated: September 11, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Part 31 is amended as set forth below:

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

1. The authority citation for 48 CFR Part 31 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

2. Section 31.205-1(f)(5) is revised to read as follows:

31.205-1 Public relations and advertising costs.

* * * * *

(f) * * *

(5) Costs of promotional material, motion pictures, videotapes,

brochures, handouts, magazines, and other media that are designed to

call favorable attention to the contractor and its activities.

* * * * *

[FR Doc. 96-32009 Filed 12-19-96; 8:45 am]

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DEPARTMENT OF DEFENSE

48 CFR Part 31

[FAC 90-43; FAR Case 95-003; Item X]

RIN 9000-AG73

Federal Acquisition Regulation; Impairment of Long-Lived Assets

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule adopted as a final rule with changes.

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

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed to a final rule to amend

the Federal Acquisition Regulation (FAR) to clarify the cost

allowability rules concerning the recognition of losses when carrying

values of impaired assets are written down for financial reporting

purposes. This regulatory action was not subject to Office of

Management and Budget review under Executive Order 12866, dated

September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: February 18, 1997.

FOR FURTHER INFORMATION CONTACT: Mr. Jeremy Olson at (202) 501-3221 in

reference to this FAR case. For general information, contact the FAR

Secretariat, Room 4035, GS Building, Washington, DC 20405 (202) 501-

4755. Please cite FAC 90-43, FAR case 95-003.

SUPPLEMENTARY INFORMATION:

A. Background

This final rule clarifies that impairment losses recognized for

financial accounting purposes under the Financial Accounting Standards

Board Statement of Financial Accounting Standards (SFAS), No. 121,

Accounting for the Impairment of Long-Lived Assets and for Long-Lived

Assets to be Disposed of, dated March 1995, are not allowable for

Government contract costing.

The SFAS applies to long-lived assets (such as land, buildings, and

equipment), certain identifiable intangibles, and related goodwill. If

impaired assets are to be held for use, the SFAS requires a write-down

to fair value when events or circumstances (e.g., environmental damage,

idle facilities arising from declining business, etc.) indicate that

carrying values may not be fully recoverable. Once written down, the

previous carrying amount of an impaired asset could not be restored if

the impairment were subsequently removed.

In contrast to the SFAS provisions, Cost Accounting Standard (CAS)

9904.409, Depreciation of Tangible Capital Assets, provides quite

different criteria and guidance to recognize gains and losses for

Government contract purposes. The language at CAS 9904.409-40 (a)(4)

and (b)(4), CAS 9904.409-50(j), and related Promulgation Comment 10,

Gain or Loss, makes it clear that gains and loses are recognized only

upon asset disposal; no other circumstances trigger such recognition.

The language at CAS 9904.409-50(i) makes it clear that changes in

depreciation may result from other permissible causes, e.g., changes in

estimated service life, consumption of services, and residual value.

This final rule amends FAR 31.205-11, Depreciation, and 31.205-16,

Gains and Losses on Disposition or

[[Page 67424]]

Impairment of Depreciable Property or Other Capital Assets, to clarify

that these subsections reflect the CAS provisions that an asset be

disposed of in order to recognize a gain or loss. Consequently, for

Government contract purposes, (1) an impairment loss is recognized only

upon disposal of the impaired asset and is measured, like other losses,

as the difference between the net amount realized and the impaired

asset's undepreciated balance; (2) Government contractors recover the

carrying values of impaired assets held for use by retaining pre-write-

down depreciation or amortization schedules as though no impairment had

occurred; and (3) changes in depreciation are allowable from other

permissible causes.

An interim rule was published in the Federal Register on December

14, 1995 (60 FR 64254). Four sources submitted public comments. All

comments were considered in developing this final rule.

B. Regulatory Flexibility Act

The Department of Defense, the General Services Administration, and

the National Aeronautics and Space Administration certify that this

final rule will not 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, et seq., because most contracts awarded

to small entities use simplified acquisition procedures or are awarded

on a competitive fixed-price basis and do not require application of

the FAR cost principles.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 31

Government procurement.

Dated: September 11, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Accordingly, the interim rule amending 48 CFR Part 31 and published

at 60 FR 64254, December 14, 1995, is adopted as a final rule with the

following changes:

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

1. The authority citation for 48 CFR Part 31 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

2. Section 31.205-11(o) is revised to read as follows:

31.205-11 Depreciation.

* * * * *

(o) In the event of a write-down from carrying value to fair value

as a result of impairments caused by events or changes in

circumstances, allowable depreciation of the impaired assets shall be

limited to the amounts that would have been allowed had the assets not

been written down (see 31.205-16(g)). However, this does not preclude a

change in depreciation resulting from other causes such as permissible

changes in estimates of service life, consumption of services, or

residual value.

3. Section 31.205-16(g) is revised to read as follows:

31.205-16 Gains and losses on disposition or impairment of depreciable

property or other capital assets.

* * * * *

(g) With respect to long-lived tangible and identifiable intangible

assets held for use, no loss shall be allowed for a write-down from

carrying value to fair value as a result of impairments caused by

events or changes in circumstances (e.g., environmental damage, idle

facilities arising from a declining business base, etc.). If

depreciable property or other capital assets have been written down

from carrying value to fair value due to impairments, gains or losses

upon disposition shall be the amounts that would have been allowed had

the assets not been written down.

[FR Doc. 96-32010 Filed 12-19-96; 8:45 am]

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DEPARTMENT OF DEFENSE

48 CFR Part 31

[FAC 90-43, FAR Case 96-003, Item XI]

RIN 9000-AH35

Federal Acquisition Regulation; Local Government Lobbying Costs

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comment.

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

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed to an interim rule to amend

the Federal Acquisition Regulation (FAR) to make allowable the costs of

lobbying activities to influence local legislation in order to directly

reduce contract costs or to avoid material impairment of the

contractor's authority to perform the contract. This regulatory action

was not subject to Office of Management and Budget review under

Executive Order 12866, dated September 30, 1993, and is not a major

rule under 5 U.S.C. 804.

DATES: Effective Date: December 20, 1996.

Comment Date: Comments should be submitted to the FAR Secretariat

at the address shown below on or before February 18, 1997 to be

considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to:

General Services Administration, FAR Secretariat (MVRS), 18th & F

Streets, NW, Room 4035, Attn: Ms. Beverly Fayson, Washington, DC 20405.

Please cite FAC 90-43, FAR case 96-003, in all correspondence related

to this case.

FOR FURTHER INFORMATION CONTACT: Mr. Jeremy Olson at (202) 501-3221 in

reference to this FAR case. For general information, contact the FAR

Secretariat, Room 4035, GS Building, Washington, DC 20405 (202) 501-

4755. Please cite FAC 90-43, FAR case 96-003.

SUPPLEMENTARY INFORMATION:

A. Background

Sections 2101 and 2151 of the Federal Acquisition Streamlining Act

of 1994 (Public Law 103-355) (FASA) added to the lists of unallowable

costs found at 10 U.S.C. 2324(e)(1) and 41 U.S.C. 256, the costs of

lobbying the legislative body of a political subdivision of a state

(i.e., local lobbying). As a result, under FAR Case 94-754 (60 FR

42659, August 16, 1995), FAR 31.205-22(a) (3) and (4) were revised to

make unallowable the costs associated with any attempt to influence

local legislation. The paragraph at FAR 31.205-22(b) contains a list of

activities exempted from the provisions at 31.205-22(a). Included in

the exempted activities are lobbying activities to influence state

legislation in order to directly reduce contract costs, or to avoid

material impairment of the contractor's authority to perform the

contract. This interim rule amends FAR 31.205-22(b)(2) to treat

lobbying activities to influence local legislation in a manner

consistent with the treatment of lobbying activities to influence state

legislation.

B. Regulatory Flexibility Act

The interim rule is not expected to 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, et seq.,

[[Page 67425]]

because most contracts awarded to small entities use simplified

acquisition procedures or are awarded on a competitive fixed-price

basis and do not require application of the FAR cost principles. An

Initial Regulatory Flexibility Analysis has, therefore, not been

performed. Comments are invited from small businesses and other

interested parties. Comments from small entities concerning the

affected FAR part also will be considered in accordance with 5 U.S.C.

610. Such comments must be submitted separately and cite 5 U.S.C 601,

et seq., (FAR case 96-003), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

D. Determination To Issue an Interim Rule

A determination has been made under the authority of the Secretary

of Defense (DOD), the Administrator of General Services (GSA), and the

Administrator of the National Aeronautics and Space Administration

(NASA) that urgent and compelling reasons exist to promulgate this

interim rule without prior opportunity for public comment. This action

is necessary to fully implement Sections 2101 and 2151 of the Federal

Acquisition Streamlining Act of 1994 with regard to the allowability of

lobbying costs to influence local legislation. However, pursuant to

Pub. L. 98-577 and FAR 1.501, public comments received in response to

this interim rule will be considered in the formulation of the final

rule.

List of Subjects in 48 CFR Part 31:

Government procurement.

Dated: December 11, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Part 31 is amended as set forth below:

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

1. The authority citation for 48 CFR Part 31 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

2. Section 31.205-22(b)(2) is revised to read as follows:

31.205-22 Lobbying and political activity costs.

* * * * *

(b) * * *

(2) Any lobbying made unallowable by paragraph (a)(3) of this

subsection to influence state or local legislation in order to directly

reduce contract cost, or to avoid material impairment of the

contractor's authority to perform the contract.

* * * * *

[FR Doc. 96-32011 Filed 12-19-96; 8:45 am]

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DEPARTMENT OF DEFENSE

48 CFR Parts 46 and 52

[FAC 90-43; FAR Case 92-035; Item XII]

RIN 9000-AG76

Federal Acquisition Regulation; Clause Flowdown

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed to a final rule to amend

the Federal Acquisition Regulation (FAR) to reduce the number of

contract clauses requiring flowdown to subcontractors. This regulatory

action was not subject to Office of Management and Budget review under

Executive Order 12866, dated September 30, 1993, and is not a major

rule under 5 U.S.C. 804.

EFFECTIVE DATE: February 18, 1997.

FOR FURTHER INFORMATION CONTACT: Mr. Jeremy Olson at (202) 501-3221 in

reference to this FAR case. For general information, contact the FAR

Secretariat, Room 4035, GS Building, Washington, DC 20405 (202) 501-

4755. Please cite FAC 90-43, FAR case 92-035.

SUPPLEMENTARY INFORMATION:

A. Background

The Councils conducted an extensive review of all FAR clauses

requiring flowdown to subcontractors in an effort to eliminate any

unnecessary flowdown requirements. This final rule eliminates the

requirement for flowdown of the clauses at FAR 52.215-26, 52.216-5,

52.216-6, 52.216-16, 52.216-17, 52.222-1, 52.236-21, 52.244-2, 52.246-

23, 52.246-24, and 52.246-25.

A proposed rule was published in the Federal Register on December

27, 1995, at 60 FR 67024. Three sources submitted public comments. All

comments were considered in developing the final rule.

B. Regulatory Flexibility Act

The Department of Defense, the General Services Administration, and

the National Aeronautics and Space Administration certify that this

final rule will not 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, et seq., because elimination of the

mandatory flowdown requirements from the amended FAR clauses does not

eliminate the ability of prime contractors and subcontractors to agree

to similar clauses in appropriate circumstances.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose any new recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 46 and 52

Government procurement.

Dated: December 11, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 46 and 52 are amended as set forth below:

1. The authority citation for 48 CFR Parts 46 and 52 continues to

read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

PART 46--QUALITY ASSURANCE

46.806 [Removed]

2. Section 46.806 is removed.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

52.215-26 [Amended]

3. Section 52.215-26 is amended by revising the clause date to read

``(FEB 1997)'', and by removing paragraph (d).

4. Section 52.216-5 is amended by revising the introductory

paragraph, the clause date, and paragraph (i) to read as follows:

52.216-5 Price Redetermination--Prospective.

As prescribed in 16.205-4, insert the following clause:

PRICE REDETERMINATION--PROSPECTIVE (FEB 1997)

* * * * *

[[Page 67426]]

(i) Subcontracts. No subcontract placed under this contract may

provide for payment on a cost-plus-a-percentage-of-cost basis.

* * * * *

(End of clause)

5. Section 52.216-6 is amended by revising the clause date and

paragraph (h) to read as follows:

52.216-6 Price Redetermination--Retroactive.

* * * * *

PRICE REDETERMINATION--RETROACTIVE (FEB 1997)

* * * * *

(h) Subcontracts. No subcontract placed under this contract may

provide for payment on a cost-plus-a-percentage-of-cost basis.

* * * * *

(End of clause)

6. Section 52.216-16 is amended by revising the introductory

paragraph, the clause date, and paragraph (h) to read as follows:

52.216-16 Incentive Price Revision--Firm Target.

As prescribed in 16.405(a), insert the following clause:

INCENTIVE PRICE REVISION--FIRM TARGET (FEB 1997)

* * * * *

(h) Subcontracts. No subcontract placed under this contract may

provide for payment on a cost-plus-a-percentage-of-cost basis.

* * * * *

(End of clause)

* * * * *

7. Section 52.216-17 is amended by revising the introductory

paragraph, the clause date, and paragraph (j) to read as follows:

52.216-17 Incentive Price Revision--Successive Targets.

As prescribed in 16.405(b), insert the following clause:

INCENTIVE PRICE REVISION--SUCCESSIVE TARGETS (FEB 1997)

* * * * *

(j) Subcontracts. No subcontract placed under this contract may

provide for payment on a cost-plus-a-percentage-of-cost basis.

* * * * *

(End of clause)

* * * * *

8. Section 52.222-1 is amended by revising the introductory

paragraph and the clause date; by removing the paragraph designation

``(a)''; and by removing paragraph (b). The revised text reads as

follows:

52.222-1 Notice to the Government of Labor Disputes.

As prescribed in 22.103-5(a), insert the following clause:

NOTICE TO THE GOVERNMENT OF LABOR DISPUTES (FEB 1997)

* * * * *

(End of clause)

52.236-21 [Amended]

9. Section 52.236-21 is amended by revising the clause date to read

``(FEB 1997)'', and by removing paragraph (h).

52.244-2 [Amended]

10. Section 52.244-2 is amended by revising the clause date to read

``(FEB 1997)'', by removing paragraph (i); and by redesignating

paragraphs (j) and (k) as (i) and (j), respectively.

52.246-23 [Amended]

11. Section 52.246-23 is amended by revising the clause date to

read ``(FEB 1997)'', and by removing paragraph (d).

52.246-24 [Amended]

12. Section 52.246-24 is amended by revising the clause date to

read ``(FEB 1997)'', and by removing paragraphs (f) and (g).

52.246-25 [Amended]

13. Section 52.246-25 is amended by revising the clause date to

read ``(FEB 1997)'', and by removing paragraph (d).

[FR Doc. 96-32012 Filed 12-19-96; 8:45 am]

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[Federal Register: December 20, 1996 (Volume 61, Number 246)]

[Rules and Regulations]

[Page 67426-67430]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

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DEPARTMENT OF DEFENSE

48 CFR Part 53

[FAC 90-43; FAR Case 95-310; Item XIII]

RIN 9000-AH36

Federal Acquisition Regulation; Collection of FASA-Related

Information Within the Federal Procurement Data System

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed on a final rule to amend

the Federal Acquisition Regulation (FAR) to change the Standard Form

279, Federal Procurement Data System (FPDS)--Individual Contract Action

Report, and Standard Form 281, Federal Procurement Data System (FPDS)--

Summary Contract Action Report ($25,000 or Less), to incorporate new

information categories required by the Federal Acquisition Streamlining

Act of 1994. This regulatory action was not subject to Office of

Management and Budget review under Executive Order 12866, dated

September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: December 20, 1996.

FOR FURTHER INFORMATION CONTACT: Ms. Linda Klein at (202) 501-3775 in

reference to this FAR case. For general information, contact the FAR

Secretariat, Room 4035, GS Building, Washington, DC 20405 (202) 501-

4755. Please cite FAC 90-43, FAR case 95-310.

SUPPLEMENTARY INFORMATION:

A. Background

FASA added several new categories of information which agencies

must be able to access from a computer file. The SF 279, Federal

Procurement Data System (FPDS)--Individual Contract Action Report, and

the SF 281, Federal Procurement Data System (FPDS)--Summary Contract

Action Report ($25,000 or Less), are used to collect that information

and transmit it to the appropriate agency information management

system. The forms are being amended to reflect the new information

requirements and make minor administrative corrections.

B. Regulatory Flexibility Act

The final rule does not constitute a significant FAR revision

within the meaning of FAR 1.501 and Public Law 98-577, and publication

for public comments is not required. Therefore, the Regulatory

Flexibility Act does not apply. However, comments from small entities

concerning the affected FAR part will be considered in accordance with

5 U.S.C. 610. Such comments must be submitted separately and cite 5

U.S.C. 601, et seq. (FAC 90-43, FAR case 95-310), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 53

Government procurement.

Dated: December 11, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Part 53 is amended as set forth below:

PART 53--FORMS

1. The authority citation for 48 CFR Part 53 continues to read as

follows:

[[Page 67427]]

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

53.204-2 [Amended]

2. Section 53.204-2 is amended in paragraphs (a) and (b) by

revising ``(REV. 10/89)'' and ``(REV. 10/88)'' to read ``(REV. 5/96)''.

3. In 53.301-279, Standard Form 279, Federal Procurement Data

System (FPDS)--Individual Contract Action Report, is revised to read as

follows:

53.301-279 SF 279, Federal Procurement Data System (FPDS)--Individual

Contract Action Report

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[[Page 67428]]

[GRAPHIC] [TIFF OMITTED] TR20DE96.004

[[Page 67429]]

[GRAPHIC] [TIFF OMITTED] TR20DE96.005

[[Page 67430]]

[FR Doc. 96-32013 Filed 12-19-96; 8:45 am]

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[Rules and Regulations]

[Page 67430]

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DEPARTMENT OF DEFENSE

48 CFR Parts 1, 4, 12, 19, 31, 46 and 52

[FAC 90-43; Item XIV]

Federal Acquisition Regulation; Technical Amendments

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Technical amendments.

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SUMMARY: This document is being issued in order to update the list of

Office of Management and Budget approvals under the Paperwork Reduction

Act which resulted from recent changes to the Federal Acquisition

Regulation (FAR), and to correct typographical errors, FAR citations

and clause dates.

EFFECTIVE DATE: December 20, 1996.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS

Building, Washington, DC 20405 (202) 501-4755. Please cite FAC 90-43,

Technical Amendments.

List of Subjects in 48 CFR parts 1, 4, 12, 19, 31, 46 and 52

Government procurement.

Dated: December 11, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

48 CFR Parts 1, 4, 12, 19, 22, 31, 46, and 52 are amended as set

forth below:

1. The authority citation for 48 CFR Parts 1, 4, 12, 19, 22, 31,

46, and 52 continues to read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

PART 1--FEDERAL ACQUISITION REGULATION

1.106 [Corrected]

2. Section 1.106 is amended under the ``FAR segment'' and ``OMB

control No.'' headings following the introductory text by removing

``22.15'' and ``9000-0127'', and ``All other requirements'' and ``9000-

0063'', respectively, and revising the entry ``42.203'' to read

``43.205(f)''.

PART 4--ADMINISTRATIVE MATTERS

4.803 [Corrected]

3. Section 4.803(a)(11) is amended by revising the word

``representatives'' to read ``representations''.

PART 12--ACQUISITION OF COMMERCIAL ITEMS

12.301, 12.302, and 12.303 [Corrected]

4. Section 12.301 is amended in paragraphs (b)(1) and (b)(3),

section 12.302 is amended in the second sentence of paragraph (d), and

section 12.303 is amended in paragraphs (c)(1) and (e)(1) by revising

``Block 26'' to read ``Block 27a''.

PART 19--SMALL BUSINESS PROGRAMS

19.502-1 [Corrected]

5. Section 19.502-1 is amended in the introductory text by removing

``Using the order of precedence in 19.504, the'' and inserting ``The''

in its place.

19.508 [Corrected]

6. Section 19.508 is amended in the first sentence of paragraphs

(c) and (d) by removing ``(see 19.504(a)(2))'' and ``(see

19.504(a)(4))'', respectively.

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

31.205-6 [Corrected]

7. Section 31.205-6 is amended in the second sentence of paragraph

(g)(1) by revising the citation ``paragraph (j)(6) below'' to read

``paragraph (j)(7)''.

PART 46--QUALITY ASSURANCE

46.805 [Corrected]

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

52.208-9 [Corrected]

8.-9. Section 52.208-9 is amended in the fourth sentence of

paragraph (c) of the clause by revising the word ``contract'' to read

``contact''.

52.211-4 [Corrected]

10. Section 52.211-4 is amended in the introductory text by

revising ``11.203(d)'' to read ``11.204(d)''.

52.211-5 [Corrected]

11. Section 52.211-5 is amended in the introductory text by

revising ``11.203(e)'' to read ``11.302(a)''.

52.211-6 [Corrected]

12. Section 52.211-6 is amended in the introductory text by

revising ``11.203(f)'' to read ``11.302(b)''.

52.211-7 [Corrected]

13. Section 52.211-7 is amended in the introductory text by

revising ``11.203(g)'' to read ``11.302(c)''.

52.211-13 [Corrected]

14. Section 52.211-13 is amended by revising the introductory text

to read ``As prescribed in 11.504(c), insert the following clause:''.

52.228-14 [Corrected]

15. Section 52.228-14 is amended in item 5 of paragraphs (e) and

(f) by revising ``1983 Revision'' to read ``1993 Revision'' and

``Publication No. 400'' to read ``Publication No. 500''.

[FR Doc. 96-32014 Filed 12-19-96; 8:45 am]

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[Federal Register: December 20, 1996 (Volume 61, Number 246)]

[Rules and Regulations]

[Page 67430-67431]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

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DEPARTMENT OF DEFENSE

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: Notice.

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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 the rules appearing in

Federal Acquisition Circular (FAC) 90-43 which amends the FAR. Further

information regarding these rules may be obtained by referring to FAC

90-43 which precedes this notice. This document may be obtained from

the Internet at http://www.gsa.gov/far/SECG.

FOR FURTHER INFORMATION CONTACT: Beverly Fayson, FAR Secretariat, (202)

501-4755.

Item I--FASA and the Walsh-Healey Public Contracts Act (FAR Case

96-601)

This interim rule amends the Federal Acquisition Regulation (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. Section 7201

of the Federal Acquisition Streamlining Act of 1994 (Public Law 103-

355) amended the Walsh-Healey Public Contracts Act to repeal the

``manufacturer'' or ``regular dealer'' requirement.

[[Page 67431]]

Item II--Individual and Class Deviations (FAR Case 96-004)

This final rule amends the FAR to eliminate the requirements for

all agencies to submit copies of approved individual deviations to the

FAR Secretariat and for DOD and NASA to submit copies of approved class

deviations to the FAR Secretariat.

Item III--Use of Data Universal Numbering System as Primary

Contractor Identification (FAR Case 95-307)

This interim rule amends the FAR by adding a new solicitation

provision at 52.204-6, and revising Standard Forms 294 and 295 to

replace the Contractor Establishment Code with the Data Universal

Numbering System number as the means of identifying contractors in the

Federal Procurement Data System.

Item IV--Inapplicability of Cost Accounting Standards to Contracts

and Subcontracts for Commercial Items (FAR Case 96-310)

This final rule amends FAR Part 12 to implement Section 4205 of the

Clinger-Cohen Act of 1996 (Public Law 104-106) (formerly the Federal

Acquisition Reform Act (FARA)). Section 4205 amends 41 U.S.C. 422(f) to

provide that the statutory requirement for mandatory use of Cost

Accounting Standards (CAS) need not apply to contracts or subcontracts

for the acquisition of commercial items. While CAS generally will not

apply to acquisitions of commercial items, CAS requirements may be

invoked as a matter of policy by the CAS Board, pursuant to the

authority provided in 41 U.S.C. 422.

Item V--Allowable Cost and Payment Clause (FAR Case 93-024)

This final rule amends the FAR to clarify that reimbursement of

subcontract costs under cost-type contracts generally will not be made

to a large business contractor until the contractor has made payment to

the subcontractor.

Item VI--Mentor Protege Program (FAR Case 93-308)

The interim rule published as Item X of FAC 90-37 is finalized with

minor clarifying changes. The rule permits a mentor firm under the DOD

Pilot Mentor-Protege Program to be granted credit toward subcontracting

goals for certain costs incurred in providing developmental assistance

to its protege firms, and to award subcontracts on a noncompetitive

basis to its protege firms.

Item VII--Minority Small Business and Capital Ownership (FAR Case

95-028)

This interim rule amends the FAR to reflect revisions to the Small

Business Administration's 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.

Item VIII--Extension of Small Business Competitiveness Demonstration

Program (FAR Case 96-328)

This final rule amends the FAR to implement Section 108, Title I

(Amendments to Small Business Administration Act). Section 108 extends

the Small Business Competitiveness Demonstration Program (15 U.S.C. 644

note) until September 30, 1997.

Item IX--Morale, Health, Welfare Costs/Contractor Overhead

Certification (FAR Case 92-613)

This final rule amends the cost principle at FAR 31.205-1, Public

Relations and Advertising Costs, by removing from paragraph (f)(5) the

parenthetical reference to other cost principles to eliminate any

confusion as to which cost principle governs.

Item X--Impairment of Long-Lived Assets (FAR Case 95-003)

This final rule amends the FAR to clarify the cost allowability

rules concerning the recognition of losses when carrying values of

impaired assets are written down for financial reporting purposes.

Item XI--Local Government Lobbying Costs (FAR Case 96-003)

This interim rule amends the FAR to make allowable the costs of

lobbying activities to influence local legislation in order to directly

reduce contract costs or to avoid material impairment of the

contractor's authority to perform the contract.

Item XII--Clause Flowdown (FAR Case 92-035)

This final rule amends the FAR by eliminating requirements for

prime contractors to flow down clause provisions to their

subcontractors or suppliers from FAR clauses 52.215-26, 52.216-5,

52.216-6, 52.216-16, 52.216-17, 52.222-1, 52.236-21, 52.244-2(i),

52.246-23, 52.246-24, and 52.246-25.

Item XIII--Collection of FASA-Related Information Within the Federal

Procurement Data System (FAR Case 95-310)

This final rule amends the FAR to change the Standard Form 279,

Federal Procurement Data System (FPDS)--Individual Contract Action

Report, and Standard Form 281, Federal Procurement Data System (FPDS)--

Summary Contract Action Report ($25,000 or Less), to incorporate new

information categories required by the Federal Acquisition Streamlining

Act of 1994.

Dated: December 11, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

[FR Doc. 96-31999 Filed 12-19-96; 8:45 am]

BILLING CODE 6820-EP-P