An official website of the United States Government
fac90_32
18, 1995 (Volume 60, Number 180)]
[Rules and Regulations]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
________________________________________________________
Part II
Department of Defense
General Services Administration
National Aeronautics and Space Administration
________________________________________________________
48 CFR Chapter 1 and Parts 1, et al.
Federal Acquisition Regulation (FAR); Final Rules
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Chapter 1
[Federal Acquisition Circular 90-32]
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 rules.
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SUMMARY: This document serves to introduce the final rules which follow
and which comprise Federal Acquisition Circular (FAC) 90-32. The
Federal Acquisition Regulatory Council has agreed to issue FAC 90-32 to
amend the Federal Acquisition Regulation (FAR).
DATES: For effective dates, see individual documents following this
one.
FOR FURTHER INFORMATION CONTACT: The team leader or FAR Staff Analyst
whose name appears in relation to each FAR case or subject area. For
general information, contact the FAR Secretariat, Room 4037, GS
Building, Washington, DC, 20405 (202) 501-4755. Please cite FAC 90-32
and FAR case number(s).
SUPPLEMENTARY INFORMATION: Federal Acquisition Circular 90-32 amends
the Federal Acquisition Regulation (FAR) as specified below:
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Item Subject FAR case Team leader
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I....... Truth in 94-720 & 94-721..... Al Winston (703)
Negotiations Act 602-2119.
and Related
Changes.
II...... Protests, Disputes 94-730.............. Craig Hodge (703)
and Appeals. 274-8940.
III..... Acquisition of 94-790.............. Lawrence Trowel
Commercial Items. (703) 695-3858.
IV...... Whistleblower 94-803.............. Jules Rothlein
Protections for (703) 697-4349.
Contractor
Employees (Ethics).
V....... Small Business..... 94-780.............. Victoria Moss (202)
501-4764.
VI...... Publicizing 95-606.............. Ralph DeStefano
Contract Actions. (202) 501-1758.
VII..... Subcontractor 94-762.............. John Galbraith
Payments. (703) 697-6710.
VIII.... Reimbursement of 94-731.............. Craig Hodge (703)
Protest Costs. 274-8940.
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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--Truth in Negotiations Act and Related Changes (FAR Cases 94-720
and 94-721)
This final rule is issued pursuant to the Federal Acquisition
Streamlining Act of 1994 (FASA), Pub. L. 103-355 to implement those
portions of FASA that make specific changes to the Truth in
Negotiations Act (TINA) or that impact other areas of the FAR that
affect contract pricing.
This rule implements Sections 1201 through 1210 and Sections 1251
and 1252 of the FASA. A new exception is added to the requirement for
the submission of ``cost or pricing data'' for commercial items; the
approval level for waivers is changed, and prohibitions are placed on
acquiring ``cost or pricing data'' when an exception applies. The
coverage includes a clear explanation of adequate price competition as
required by the FASA.
Coverage has been included that addresses (1) ``information other
than cost or pricing data,'' (2) exceptions based on established
catalog or market price, (3) interorganizational transfers of
commercial items at price, and (4) price competition when only one
offer has been received.
The new policy also expands the exception based on adequate price
competition and provides for a special exception for commercial items.
A new section addressing ``information other than cost or pricing
data'' is created and a Standard Form 1448 is provided for use by
contractors.
The new policy at FAR 15.804-1(b)(1)(ii) recognizes circumstances
when it can be determined that adequate price competition exists even
though only one offeror has responded to the Government``s requirement.
In addition, this rule finalizes, with changes, the interim rule in
FAC 90-22 that made TINA requirements for civilian agencies
substantially the same as those for the Department of Defense
(increasing the threshold for submission of ``cost or pricing data'' to
$500,000 and adding penalties for defective pricing). Provisions were
also included that increase the threshold for cost or pricing data
submission every 5 years beginning October 1, 1995.
Although the instruction to amend contracts without consideration
to update the cost or pricing data threshold has been removed from the
FAR, the statutory authority and requirement to update the threshold
remain in effect. Accordingly, contracting officers shall, if requested
by a prime contractor, modify contracts to change the threshold in the
contract to the cost or pricing data threshold in paragraph 15.804-
2(a)(1), without requiring consideration. The contract modification
shall be accomplished by inserting into the contract the current
version of the clauses 52.215-23, Price Reduction for Defective Cost or
Pricing Data--Modifications, and 52.215-25, Subcontractor Cost or
Pricing Data-Modifications, or 52.215-24, Subcontractor Cost or Pricing
Data, as applicable. These new contract clauses shall apply only to
contract modifications and subcontracts for which agreement on price
occurs after the contracting officer has inserted the new clauses.
Item II--Protests, Disputes, and Appeals (FAR Case 94-730)
This final rule implements requirements of the Federal Acquisition
Streamlining Act of 1994 pertaining to protests, disputes, and appeals.
The primary changes included in this rule are new definitions of
``day,'' ``filed,'' and ``protest.'' Most of the adjustments merely
reflect current practice, except for the definition of ``day,'' which
changes from a presumed ``working day'' to a presumed ``calendar day.''
Agencies are now clearly allowed to take corrective action to include
payment of costs to the protester and are allowed to stay contract
performance in the face of a likely protest. Both agency and GAO
protests must now be filed within fourteen calendar days of discovery
of protest grounds, instead of the former ten working days. There is
also an explicit warning that, in the event of a conflict between the
FAR and GAO protest procedure regulations, the GAO regulations govern.
The period of time for submission of the agency administrative report
has been adjusted from the former 25 working days to 35 calendar days.
Agencies are required to prepare a protest file for prospective, non
intervening offerors to review, and to suspend performance of the
contract if the protest is filed within ten days of award or five days
of debriefing, where the debriefing is required. GAO decisions are
normally due out within 125 days, and attorney fees are generally
capped at $150 an hour, except for small businesses.
There is also an explicit statement that, in case of conflict with
the FAR, GSBCA rules govern questions of GSBCA protest procedure. The
GSBCA now has more GAO-like suspension standards and time periods.
Agencies are required to reimburse the judgment fund for costs awarded
the protester. Protest costs are limited at the GSBCA as they are with
GAO protests, such as with the attorney fee cap. Settlements are now
generally to be made public information.
In the disputes area, the claims certification threshold begins at
$100,000. Claims must be filed within six years of accrual, except for
Government claims involving fraud. Small claims now reach disputes of
$50,000, and accelerated claims have a threshold of $100,000.
Item III--Acquisition of Commercial Items (FAR Case 94-790)
This final rule implements Title VIII of the Federal Acquisition
Streamlining Act of 1994. The rule encourages the acquisition of
commercial end items and components by Federal Government agencies as
well as contractors and subcontractors at all levels. The most
significant revisions are in the following FAR parts:
Part 2 has been amended to incorporate the definitions of
``commercial item,'' ``component,'' ``commercial component'' and ``non
developmental item.''
Part 10 has been completely revised by establishing the requirement
for market research as the first step in the acquisition process.
Market research is an essential element in the later steps of
describing the agency's need, developing the overall acquisition
strategy and identifying terms and conditions unique to the item being
acquired.
Part 11 has been completely revised to address the process of
describing agency needs. It contains some of the language on
specifications and standards formerly found in FAR Part 10, but takes a
more streamlined approach. In addition, the revised Part 11 establishes
the Government's order of precedence for requirements documents and
addresses the concept of market acceptance. Part 11 also contains
coverage on Delivery or Performance Schedules, Liquidated Damages,
Priorities and Allocations, and Variations in Quantity taken from the
current Part 12 with only minor editorial revisions. The current Part
12 coverage on Suspension of Work, Stop Work Orders, and Government
Delay of Work has been moved to Subpart 42.13 with only minor editorial
revisions.
Part 12 has been completely revised to address the acquisition of
commercial items.
--Subpart 12.1 states that the policies in the revised Part 12 are
applicable to all acquisitions of commercial items above the micro-
purchase threshold. The requirements of other parts of the FAR apply to
commercial items to the extent they are not inconsistent with Part 12.
--Subpart 12.2 identifies special requirements for the acquisition of
commercial items.
--Subpart 12.3 establishes standard provisions and clauses for use in
the acquisition of commercial items. It is essential that contracting
officers be allowed to tailor solicitations and contracts to meet the
needs of the particular acquisition and the marketplace for that item.
Subpart 12.3 gives contracting officers broad authority to tailor
solicitations and contracts, a practice itself that is consistent with
commercial practices.
--A new form, the Standard Form (SF) 1449, Solicitation/Contract/Order
for Commercial Items, is established. The most significant element is
the addition of acceptance blocks at the bottom of the form that will
allow suppliers of commercial items to utilize the SF 1449 to document
receipt of the supplies or services by the Government, avoiding the
need for preparation of separate receipt/acceptance forms.
--Subpart 12.5 identifies the applicability of certain laws to the
acquisition of commercial items. It contains the list of laws
determined to be inapplicable to executive agency prime contracts for
acquisition of commercial items. This list has been expanded to also
include those laws that have been revised in some manner to modify
their applicability to commercial items. Agency unique laws determined
to be inapplicable to prime contracts are not addressed in this rule
and may be addressed separately by the respective agencies. This
subpart also contains the list of laws determined to be inapplicable to
subcontracts for commercial items. This list has been expanded to also
include those laws that have been revised in some manner to modify
their applicability to subcontracts for commercial items.
--Subpart 12.6 identifies two streamlined procedures for the evaluation
and solicitation of contracts for commercial items. These procedures
may be used at the discretion of the contracting officer.
Part 52 has been amended to include several new provisions and
clauses to be used in all solicitations and contracts for the
acquisition of commercial items:
--Section 52.212-1, Instructions to Offerors--Commercial Items,
contains solicitation instructions for the acquisition of commercial
items.
--Section 52.212-2, Evaluation--Commercial Items, contains evaluation
information that has been simplified and tailored to meet the
requirements of commercial items.
--Section 52.212-3, Offeror Representations and Certifications--
Commercial Items, includes, in one provision, the certifications and
representations required to comply with laws or Executive orders.
--Section 52.212-4, Contract Terms and Conditions--Commercial Items,
contains the terms and conditions believed to be consistent with
customary commercial practice.
--Section 52.212-5, Contract Terms and Conditions Required to Implement
Statutes or Executive Orders--Commercial Items, implements provisions
of law or Executive Orders applicable to Government acquisitions of
commercial items or commercial components. The clause at 52.212-5
represents the minimum number of clauses required to implement statutes
and Executive orders. Certain clauses may apply depending upon the
circumstances; the contracting officer will indicate which of these
clauses apply for the specific acquisition.
--Section 52.244-6, Subcontracts for Commercial Items and Commercial
Components, implements the preference for the acquisition of commercial
items or nondevelopmental items as components of items to be supplied
under Federal contracts. This clause will be used in all solicitations
and contracts for supplies and services other than commercial items.
Item IV--Whistleblower Protections for Contractor Employees (Ethics)
(FAR Case 94-803)
The final rule published as Item III of FAC 90-30 added FAR Subpart
3.9, Whistleblower Protections for Contractor Employees, to implement
Sections 6005 and 6006 of the Federal Acquisition Streamlining Act of
1994.
The rule contained an effective date of September 19, 1995, but did
not discuss the subject of applicability. The rule applies to all
contracts in existence as of September 19, 1995, for reprisals to
Government contractor employees occurring on or after that date.
Some existing Department of Defense contracts contain a clause
addressing whistleblower protections based on a prior statute, 10
U.S.C. 2409a. The remedies provided by FAR Subpart 3.9 do not apply to
contracts otherwise covered by the provisions of 10 U.S.C. 2409a.
Item V--Small Business (FAR Case 94-780)
This final rule implements Sections 7101(a) 7106, and 10004 of the
Federal Acquisition Streamlining Act (FASA) of 1994. Section 7101(a) of
FASA deletes Sections 15(e) and (f) of the Small Business Act (15
U.S.C. 631, et seq.). Those sections established the priority for award
of set-asides and provided the statutory basis for a procurement
preference for concerns located in Labor Surplus Areas (LSA). Based on
this deletion, this rule removes the LSA set-aside program and LSA
subcontracting program from the FAR.
Section 7106 of FASA revises Sections 8 and 15 of the Small
Business Act to accommodate a Governmentwide goal of 5 percent for
women-owned small businesses. This rule deletes existing, separate
coverage relating to women-owned businesses and revises existing
coverage to place women-owned small businesses on an equal footing with
small disadvantaged businesses. In connection with this revision, the
Standard Forms 294 and 295 are revised and streamlined.
Section 10004 of FASA, which requires the collection of specified
data through the Federal Procurement Data System, is being implemented
by FAR case 94-701. This rule augments that coverage by providing a
solicitation provision to collect the information on women-owned
businesses as required by that FAR case.
Item VI--Publicizing Contract Actions (FAR Case 95-606)
This final rule amends FAR sections 5.207(b)(4) and (b)(6). The
amendment deletes the requirement for the Federal Information
Processing Standard (FIPS) Number in Commerce Business Daily synopses
and, in lieu thereof, requests Government Printing Office (GPO) Billing
Account Code Information.
Item VII--Subcontractor Payments (FAR Case 94-762)
This final rule implements Sections 2091 and 8105 of the Federal
Acquisition Streamlining Act of 1994. The rule amends FAR Parts 28, 32,
and 52 to reflect: statutory requirements related to providing
information to subcontractors and prospective subcontractors concerning
bonds under the Miller Act; that while the Government does not have
privity with subcontractors, and does not serve as a collection agent
for them, the Government properly has an interest in the financial
capability, managerial competence, and business ethics of companies
doing business with the Government; that the contracting officer should
be informed about both sides of the argument in a dispute between the
prime contractor and its subcontractor in order to exercise good
business judgment; and finally, when an assertion raises a creditable
question concerning the accuracy of a contractor certification, the
contracting officer must decide whether the certification is inaccurate
in any material respect, and, if so, bring the matter to the attention
of the appropriate authorities, in accordance with agency regulations.
Item VIII--Reimbursement of Protest Costs (FAR Case 94-731)
This final rule implements Sections 1016, 1403, and 1435 of the
Federal Acquisition Streamlining Act of 1994. The primary effect of
this rule is to allow the Government to seek reimbursement for protest
costs it has paid a protester, such as the protester's attorney fees,
where that protest has been sustained based upon the awardee's
misrepresentation. In addition to any other remedies available, the
Government may collect this debt by offsetting the amount against any
payment due the awardee under any Government contract the awardee might
have.
Dated: September 7, 1995.
Edward C. Loeb,
Deputy Project Manager for the Implementation of the Federal
Acquisition Streamlining Act of 1994.
Federal Acquisition Circular
[Number 90-32]
Federal Acquisition Circular (FAC) 90-32 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.
Unless otherwise specified below, all Federal Acquisition
Regulation (FAR) and other directive material contained in FAC 90-32 is
effective October 1, 1995. FAC Items I, and V through VIII, are
applicable for solicitations issued on or after October 1, 1995.
Item II--Where this rule repeats a GSBCA rule that went into effect
earlier, the date of the GSBCA rule and its applicability provision
prevail; otherwise, this rule is applicable to protests or claims filed
on or after October 1, 1995.
Item III--For solicitations issued on or after October 1, 1995: Use
of the new policies, provisions and clauses is optional for
solicitations issued before December 1, 1995, and mandatory for
solicitations issued on or after December 1, 1995.
Item IV--Effective September 19, 1995.
Dated: September 7, 1995.
Roland A. Hassebrock,
Col, USAF Director, Defense Procurement (Acting).
Dated: September 6, 1995.
Ida M. Ustad,
Associate Administrator for Acquisition Policy, General Services
Administration.
Dated: September 7, 1995.
Tom Luedtke,
Deputy Associate Administrator for Procurement, National Aeronautics
and Space Administration.
[Federal Register: September 18, 1995 (Volume 60, Number 180)]
[Rules and Regulations]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
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DEPARTMENT OF DEFENSE
48 CFR Parts 1, 4, 14, 15, 16, 31, 33, 36, 45, 46, 49, 52, and 53
[94-721; Item I FAC 90-32; FAR Cases 94-720 and 94-721]
RIN 9000-AG19; 9000-AG30
Federal Acquisition Regulation; Truth in Negotiations Act and
Related Changes
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rules.
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SUMMARY: These final rules are issued pursuant to the Federal
Acquisition Streamlining Act of 1994 to implement those portions of
Pub. L. 103-355 that make specific changes to the Truth in Negotiations
Act (TINA) or that impact other areas of the FAR that affect contract
pricing. These regulatory actions were subject to Office of Management
and Budget review under Executive Order 12866, dated September 30,
1993.
EFFECTIVE DATE: October 1, 1995.
FOR FURTHER INFORMATION CONTACT: Mr. Al Winston, Truth in Negotiations
Act (TINA) Team Leader, at (703) 602-2119 in reference to this FAR
case. For general information, contact the FAR Secretariat, Room 4037,
GSA Building, Washington, DC 20405, (202) 501-4755. Please cite FAR
case 94-721.
SUPPLEMENTARY INFORMATION:
A. Background
The Federal Acquisition Streamlining Act of 1994 (Pub. L. 103-355)
(the Act) provides authorities that streamline the acquisition process
and minimize burdensome government-unique requirements.
FAR case 94-721 implements Sections 1201 through 1210 and Sections
1251 and 1252 of the Act. Highlights include making TINA requirements
for civilian agencies substantially the same as those for the
Department of Defense (increasing the threshold for submission of
``cost or pricing data'' to $500,000 and adding penalties for defective
pricing). Provisions are also included that increase the threshold for
cost or pricing data submission every 5 years beginning October 1,
1995. A new exception is added to the requirement for the submission of
``cost or pricing data'' for commercial items; the approval level for
waivers is changed, and prohibitions are placed on acquiring ``cost or
pricing data'' when an exception applies. The coverage includes a clear
explanation of adequate price competition as required by the Act.
Also, FAR coverage has been included that addresses (1)
``information other than cost or pricing data'', (2) exceptions based
on established catalog or market price, (3) inter-divisional transfers
of commercial items at price, and (4) price competition when only one
offer has been received.
The FAR language primarily modifies Part 15, together with
associated Part 52 clauses and Part 53 forms. However, changes are also
made to clauses where threshold changes are made in Part 14 pertaining
to sealed bid contracting, and in Part 31 where the cost principle on
material costs has been amended to address inter-divisional transfers
of commercial items at price. Additional miscellaneous changes in Parts
1, 4, 16, 33, 36, 45, 46, and 49 have also been included.
The interim rule published at 59 FR 62498, December 5, 1994 (FAR
case 94-720, FAC 90-22) is adopted as final, as amended by this FAR
case 94-721. FAR case 94-720 provided for an immediate increase to the
threshold for ``cost or pricing data'' submission by contractors to
civilian agencies to $500,000. FAC 90-22 (FAR case 94-720) also removed
the certification requirement of commercial pricing for parts or
components for contractors doing business with civilian agencies.
Policy for Determining Reasonableness of Price
Two major changes are found in the new coverage. The first change
shifts the policy of FAR Part 15 with respect to determining price
reasonableness. A hierarchical policy preference for the types of
information to be used in assessing reasonableness of price is
established. The policy states that no additional information should be
obtained from the contractor if there is adequate price competition.
This is followed by allowing progressively more intrusive types of data
requirements. Obtaining ``cost or pricing data'' is designated as the
last choice. Use of ``cost or pricing data'' is coupled with a reminder
that unnecessarily requiring that type of data is not desirable and can
lead to additional costs to both the Government and the contractor.
New FAR coverage, based on the Act, is presented that expands the
exception based on adequate price competition and provides for a
special exception for commercial items. A new section addressing
``information other than cost or pricing data'' is created and a
Standard Form 1448 is provided for use by contractors.
The new policy at FAR 15.804-1(b)(1)(ii) recognizes circumstances
when it can be determined that adequate price competition exists even
though only one offeror has responded to the Government's requirement.
Defining ``Cost or Pricing Data''
The second major change accomplished by the coverage is the
clarification of the meaning of the term ``cost or pricing data.''
Currently, the FAR uses the term inconsistently. In some places,
``certified cost or pricing data'' is used and in other locations, it
states ``cost or pricing data.'' In the new coverage, the term has been
clarified in the definition to mean that, among other things, ``cost or
pricing data'' is required to be certified in accordance with TINA and
FAR 15.804-4, and means all facts that as of the date of agreement on
price (or other mutually agreeable date) prudent buyers and sellers
would reasonably expect to affect the price negotiations significantly.
Information Other Than Cost or Pricing Data
Since a bright-line test for ``cost or pricing data'' has now been
established, it is also possible to craft a second category of data--
''information other than cost or pricing data''--that may be required
by the contracting officer in order to establish cost realism or price
reasonableness. This information can include limited cost information,
sales data or pricing information. The intent is also clear with
respect to this category of information. Because it is not ``cost or
pricing data,'' certification shall not be required and approval to
obtain this information is vested in the contracting officer. The new
FAR coverage gives a detailed discussion of ``information other than
cost or pricing data'' at 15.804-5.
B. Regulatory Flexibility Act
The proposed rule was not expected to have a significant impact on
a substantial number of small entities within the meaning of the
Regulatory Flexibility Act, 5 U.S.C. 601, et seq. Accordingly, an
initial regulatory flexibility analysis was not prepared. Although
there were no public comments on this rule that indicated that this
line of reasoning was incorrect nor that treatment of small entities in
the proposed rule was inappropriate, the final rule may have a
significant economic impact on a substantial number of small entities
because the final rule will substantially affect the price negotiations
of non-competitive commercial item contracts. Small businesses may
receive a substantial portion of these awards. The rule is expected to
decrease the administrative expense of negotiating these awards by
reducing the amount of cost or pricing data that must be submitted,
reducing the amount of information necessary to qualify for an
exception from cost or pricing data requirements, and streamlining the
requirements for information supporting price proposals. Accordingly, a
Final Regulatory Flexibility Analysis (FRFA) has been prepared and
provided to the Chief Counsel for Advocacy for the Small Business
Administration. A copy of the FRFA may be obtained from the FAR
Secretariat.
C. Paperwork Reduction Act
The Paperwork Reduction Act, Pub. L. 96-511, is deemed to apply
because this final rule contains information collection requirements.
Approval was obtained from the Office of Management and Budget (OMB) on
March 24, 1995, under OMB Control No. 9000-0013. A request for a three-
year extension was submitted to OMB on July 11, 1995. Public comments
concerning this request were invited through a Federal Register notice
at 60 FR 36406, July 17, 1995.
D. Public Comments
On January 6, 1995, a proposed rule was published in the Federal
Register (60 FR 2282). The proposed rule afforded the public a 60-day
comment period. During that time, 40 organizations submitted more than
213 comments. A public meeting was also held on this rule on February
13, 1995. Based upon comments received, the TINA drafting team refined
the coverage.
On June 19, 1995, at 60 FR 31935, a notification of additional
changes was published that revised the original January 6, 1995
proposed rule. Interested parties were advised that the original rule
had been modified as a result of earlier comments and that a copy of
the revised proposed rule could be obtained from the FAR Secretariat.
Those who had commented on the original rule were provided with the
updated document. A 30-day written comment period was provided for, and
another public hearing was conducted on July 7, 1995. As a result of
the second public comment period, the Team received 148 pages of
written comments from 18 commenters and one telephonic comment. Based
upon comments received, the TINA drafting team further refined the
coverage.
The following are highlights of changes that were made to the
proposed rule as a result of both rounds of public comments and both
public meetings:
The Rule was edited to improve readability.
The hierarchical policy at FAR 15.802 was clarified to
ensure that it is consistent with TINA and FASA.
Regulatory guidance implementing the catalog or market
price exception to TINA was replaced with more flexible procedures (See
52.215-41 & -42).
--The Standard Form (SF) 1412, ``Request for Exemption from Submission
of Cost or Pricing Data,'' was eliminated.
--Relational tests were eliminated.
--Disclosure of lowest prices is no longer mandated.
--TINA based postaward audit access is no longer required.
--Expanded guidance was provided on what constitutes substantial sales.
--Requirement for offerors to account for ``government end use'' when
addressing sales to the general public was eliminated.
--Reference to GSA certifications was removed.
Flexibility in requesting an exception to TINA was
improved via generic provisions at FAR 52.215-41 & 52.215-42 that
provide broad guidelines on the type of data that would be needed to
qualify for a TINA exception.
The barriers in the proposed rule that prevented easier
access to the new commercial item exception have been substantially
decreased, to the maximum extent permitted by FASA.
A Commercial Item definition cross-reference was given.
A definition of cost realism was added.
Additional data requirements were removed for
qualification under the commercial item exception created by FASA
(rebates, credits, warranties, sales to resellers).
Expanded guidance was provided on effective dates for
certification of cost or pricing data.
The new SF 1448 has been substantially revised to remove
reference to cost related information that may not be appropriate for
all users of the form.
Disposition of Public Comments
Commercial Exception
Several commenters expressed concern that the proposed coverage
continued to subordinate the new commercial item exception to TINA to
the traditional TINA exceptions of adequate price competition, catalog
or market price, or price set by law or regulation.
The Team has carefully considered this issue. The Team concludes
that making the new commercial item exception (Section 1204(d)(2),
1251(d)(2)) co-equal with the original TINA exceptions is consistent
with the philosophy of FASA which is intended to make it easier for
commercial companies to do business with the Government. However, the
Team also concludes that the language at (d)(2), ``and the procurement
is not covered by an exception in subsection (b),'' is clear on its
face and prevents an absolute co-equal relationship. Nevertheless, upon
further consideration of the issue, the Team has decided that there is
sufficient statutory flexibility to provide for a more liberal
regulatory implementation of the commercial item exception. Therefore,
the Team has modified its proposed FAR language to make regulatory use
of the commercial item exception more readily available while still
providing for a consistent interpretation of statutory requirements.
This is accomplished by replacing the words, ``if an exception does not
apply'' with the words ``if the contracting officer does not have
sufficient information to support an exception'' at 15.804-1(a)(2) and
15.804-1(b)(4).
The Team has also reduced the contractor's risk of doing business
with the Government by including a statement in the solicitation
provision at 52.215-41 that indicates that providing information on one
TINA exception is not a representation that only one TINA exception may
apply.
Most Favored Customer
Other commenters were pleased to see that the SF 1412, ``Request
for Exemption from Submission of Cost or Pricing Data,'' had been
eliminated from the coverage. However, the treatment of ``most favored
customer'' pricing remains a major concern. The commenters continue to
press for a FAR prohibition on asking for this type of information.
The Team believes that establishing a FAR prohibition on any
specific contracting practice is contrary to the philosophy of FASA to
empower the contracting officer and to provide for regulatory
flexibility. Furthermore, it is bad policy guidance to construct an
absolute prohibition because it is not possible to foresee all
circumstances and an absolute prohibition could preclude a reasonable
course of action under circumstances that could not be foreseen.
With respect to the specific issue, just as the Team believes
having requirements that always mandate obtaining ``most favored
customer'' pricing is flawed, so would a policy that prohibits
obtaining this kind of information also be flawed. The Team is
convinced that both policy and procedural rules need to be constructed
in a flexible manner so they may be adapted to specific sets of
circumstances. As a result of earlier comments, the Team removed the
Standard Form 1412 and its associated requirement to disclose this type
of information as a condition of applying for a catalog or market price
exception to TINA.
The Team has also included policy guidance at 15.802 that indicates
a strong preference for pricing contracts with the minimum amount of
data needed to accomplish the task.
Specifically, when adequate price competition is present, the
contracting officer is strongly admonished not to obtain any additional
information from the offeror. As the situation moves away from that of
adequate price competition, the negotiation position between the
parties moves more in favor of the contractor and the contracting
officer is allowed to use more pricing tools. Nevertheless, the policy
is to price the contract in the least intrusive manner.
SF 1448, ``Proposal Cover Sheet/Cost or Pricing Data Not Required''
Concern was also expressed that with the elimination of the SF
1412, contracting officers might request submission of catalog or
market price exception data on the new SF 1448. The commenters believed
that the SF 1448 was not properly designed for that purpose.
Although the SF 1448 is not intended as a substitute for the SF
1412, the Team modified the SF 1448 to eliminate reference to cost
related information. This preserves the bright line between ``cost or
pricing data'' that can only be submitted on an SF 1411 and all other
``information other than cost or pricing data'' that may be submitted
using the SF 1448.
Cost Accounting Standards
Several commenters stated that the Cost Accounting Standards (CAS)
needed to be revised to narrow the definition of what constitutes
``cost or pricing data'' for purposes of CAS covered contracts. The
commenters believe that until CAS is modified the coverage in the TINA
rule would not completely address the issue of commercial contractors
being required to expose cost data to the Government and to be
accountable for such data.
The Team believes the commenters have identified a valid concern.
However, the matter rests with the CAS Board as the problem is that the
CAS definition of ``cost data'' is more broadly based than the ``cost
or pricing data'' definition in the FAR coverage.
Market Price Exception
Commenters also stated that for the market price exception to be
useful to industry it should not be tied to independent verification.
The Team does not agree with the commenters. It believes that it
makes sense to maintain this requirement as FASA requires clear FAR
standards as to what is required to qualify for a TINA exception. The
Team believes independent verification is an essential element of a
market price. Furthermore, with the creation of the new FASA commercial
item exception to TINA, it is useful to differentiate a price
reasonableness determination based on market price from information
provided directly by an offeror under the authority of the new FASA
commercial item exception.
List of Subjects in 48 CFR Parts 1, 4, 14, 15, 16, 31, 33, 36, 45, 46,
49, 52, and 53
Government procurement.
Dated: September 7, 1995.
Edward C. Loeb,
Deputy Project Manager for the Implementation of the Federal
Acquisition Streamlining Act of 1994.
The interim rule published at 59 FR 62498, December 5, 1994, FAC
90-22, FAR case 94-720, is adopted as final, as amended by this FAR
case 94-721. Therefore, 48 CFR Parts 1, 4, 14, 15, 16, 31, 33, 36, 45,
46, 49, 52, and 53 are amended as set forth below:
1. The authority citation for 48 CFR Parts 1, 4, 14, 15, 16, 31,
33, 36, 45, 46, 49, 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 1--FEDERAL ACQUISITION REGULATIONS SYSTEM
2. The table in section 1.106 is amended under the ``FAR Segment''
and ``OMB Control Number'' columns by removing ``52.215-32'' and
``9000-0105'', and ``SF 1412'' and ``9000-0013''; and adding entries,
in numerical order, to read as follows:
1.106 OMB approval under the Paperwork Reduction Act.
* * * * *
-----------------------------------------------------------------------
OMB control
FAR segment No.
------------------------------------------------------------------------
* * * * *
52.215-41.................................................. 9000-0013
52.215-42.................................................. 9000-0013
* * * * *
SF 1448.................................................... 9000-0013
SF 1449.................................................... 9000-0136
------------------------------------------------------------------------
PART 4--ADMINISTRATIVE MATTERS
3. Section 4.702 is amended by adding paragraph (a)(3) to read as
follows:
4.702 Applicability.
* * * * *
(a)(3) Audit--Commercial Items (52.215-43).
* * * * *
4. Section 4.803 is amended by revising paragraphs (a)(17) and
(b)(4) to read as follows:
4.803 Contents of contract files.
* * * * *
(a) * * *
(17) Cost or pricing data and Certificates of Current Cost or
Pricing Data or a required justification for waiver, or information
other than cost or pricing data.
* * * * *
(b) * * *
(4) Cost or pricing data, Certificates of Current Cost or Pricing
Data, or information other than cost or pricing data; cost or price
analysis; and other documentation supporting contractual actions
executed by the contract administration office.
* * * * *
PART 14--SEALED BIDDING
14.201-7 [Amended]
5. Section 14.201-7 is amended by removing paragraph (d) and
redesignating paragraph ``(e)'' as paragraph ``(d).''
PART 15--CONTRACTING BY NEGOTIATION
6. Section 15.106-2 is added to read as follows:
15.106-2 Audit--Commercial items.
(a) This subsection implements 10 U.S.C. 2306a(d)(2) and (3) and 41
U.S.C. 254b(d)(2) and (3).
(b) The contracting officer shall, when contracting by negotiation,
insert clause 52.215-43, Audit--Commercial Items, in solicitations and
contracts when submission of cost or pricing data is expected to be
excepted under 15.804-1(a)(2) (i.e., a commercial item where price is
otherwise fair and reasonable). The clause shall also be included in
solicitations and contracts when cost or pricing data are required, for
incorporation into subcontracts that may be excepted under 15.804-
1(a)(2).
15.406-5 [Amended]
7. Section 15.406-5(b) is amended by inserting at the end of the
paragraph the parenthetical ``(see 15.804-6 and 15.804-8).''.
8. Section 15.703(a)(2) is revised to read as follows:
15.703 Acquisitions requiring make-or-buy programs.
(a) * * *
(2) Qualifies for an exception from the requirement to submit cost
or pricing data under 15.804-1; or
* * * * *
9. Section 15.801 is amended by revising the definitions of ``Cost
analysis'' and ``Cost or pricing data'', and adding in alphabetical
order ``Information other than cost or pricing data'', ``Subcontract'',
``Commercial item'', and ``Cost realism'' to read as follows:
15.801 Definitions.
Commercial item is defined in 2.101.
Cost analysis means the review and evaluation of the separate cost
elements and proposed profit of (a) an offeror's or contractor's cost
or pricing data or information other than cost or pricing data and (b)
the judgmental factors applied in projecting from the data to the
estimated costs in order to form an opinion on the degree to which the
proposed costs represent what the cost of the contract should be,
assuming reasonable economy and efficiency.
Cost or pricing data means all facts that, as of the date of price
agreement or, if applicable, another date agreed upon between the
parties that is as close as practicable to the date of agreement on
price, prudent buyers and sellers would reasonably expect to affect
price negotiations significantly. Cost or pricing data are data
requiring certification in accordance with 15.804-4. Cost or pricing
data are factual, not judgmental, and are therefore verifiable. While
they do not indicate the accuracy of the prospective contractor's
judgment about estimated future costs or projections, they do include
the data forming the basis for that judgment. Cost or pricing data are
more than historical accounting data; they are all the facts that can
be reasonably expected to contribute to the soundness of estimates of
future costs and to the validity of determinations of costs already
incurred. They also include such factors as--
(a) Vendor quotations;
(b) Nonrecurring costs;
(c) Information on changes in production methods and in production
or purchasing volume;
(d) Data supporting projections of business prospects and
objectives and related operations costs;
(e) Unit-cost trends such as those associated with labor
efficiency;
(f) Make-or-buy decisions;
(g) Estimated resources to attain business goals; and
(h) Information on management decisions that could have a
significant bearing on costs.
Cost realism means the costs in an offeror's proposal are (a)
realistic for the work to be performed; (b) reflect a clear
understanding of the requirements; and (c) are consistent with the
various elements of the offeror's technical proposal.
* * * * *
Information other than cost or pricing data means any type of
information that is not required to be certified, in accordance with
15.804-4, that is necessary to determine price reasonableness or cost
realism. For example, such information may include pricing, sales, or
cost information, and includes cost or pricing data for which
certification is determined inapplicable after submission.
* * * * *
Subcontract, as used in this subpart, includes a transfer of
commercial items between divisions, subsidiaries, or affiliates of a
contractor or a subcontractor.
* * * * *
10. Section 15.802 is revised to read as follows:
15.802 Policy.
Contracting officers shall--
(a) Purchase supplies and services from responsible sources at fair
and reasonable prices. In establishing the reasonableness of the
offered prices, the contracting officer shall not obtain more
information than is necessary. To the extent that the Truth in
Negotiations Act, as implemented in 15.804-2 and 15.804-5(b) permits,
the contracting officer shall generally use the following order of
preference in determining the type of information required:
(1) No further information from the offeror if the price is based
on adequate price competition, except as provided by 15.804-5(a)(3).
(2) Information other than cost or pricing data:
(i) Information related to prices (e.g., established catalog or
market prices), relying first on information available within the
Government; second, on information obtained from sources other than the
offeror; and, if necessary, on information obtained from the offeror.
(ii) Cost information, which does not meet the definition of cost
or pricing data at 15.801.
(3) Cost or pricing data. The contracting officer should use every
means available to ascertain a fair and reasonable price prior to
requesting cost or pricing data. Contracting officers shall not
unnecessarily require the submission of cost or pricing data, because
it leads to increased proposal preparation costs, generally extends
acquisition lead-time, and wastes both contractor and Government
resources.
(b) Price each contract separately and independently and not--
(1) Use proposed price reductions under other contracts as an
evaluation factor, or
(2) Consider losses or profits realized or anticipated under other
contracts.
(c) Not include in a contract price any amount for a specified
contingency to the extent that the contract provides for a price
adjustment based upon the occurrence of that contingency.
11. Section 15.803 is amended in paragraph (a) by revising the last
sentence to read as follows:
15.803 General.
(a) * * * This prohibition does not preclude disclosing
discrepancies or mistakes of fact (such as duplications, omissions, and
errors in computation) contained in the cost or pricing data or
information other than cost or pricing data supporting the proposal.
15.804 Cost or pricing data and information other than cost or pricing
data.
12. Section 15.804, heading, is revised to read as set forth above.
13. Section 15.804-1 is revised to read as follows:
15.804-1 Prohibition on obtaining cost or pricing data.
(a) Exceptions to cost or pricing data requirements. The
contracting officer shall not, pursuant to 10 U.S.C. 2306a and 41
U.S.C. 254b, require submission of cost or pricing data (but may
require information other than cost or pricing data to support a
determination of price reasonableness or cost realism)--
(1) If the contracting officer determines that prices agreed upon
are based on--
(i) Adequate price competition (see exception standards at
paragraph (b)(1) of this subsection);
(ii) Established catalog or market prices of commercial items sold
in substantial quantities to the general public (see exception
standards at paragraph (b)(2) of this section); or
(iii) Prices set by law or regulation (see exception standards at
paragraph (b)(3) of this subsection).
(2) For acquisition of a commercial item, if the contracting
officer does not have sufficient information to support an exception
under paragraph (a)(1) of this section, but the contracting officer can
determine the price is fair and reasonable (see exception standards at
paragraph (b)(4) of this section and pricing requirements at 15.804-
5(b));
(3) For exceptional cases where a waiver has been granted (see
exception standards at paragraph (b)(5) of this section); or
(4) For modifications to contracts or subcontracts for commercial
items, if the basic contract or subcontract was awarded without the submission of
cost or pricing data because the action was granted an exception from
cost or pricing data requirements under paragraph (a)(1) of this
section and the modification does not change the contract or
subcontract to a contract or subcontract for the acquisition of other
than a commercial item (see exception standards at paragraph (b)(6) of
this subsection).
(b) Standards for exceptions from cost or pricing data
requirements--
(1) Adequate price competition. A price is based on
adequate price competition if--
(i) Two or more responsible offerors, competing independently,
submit priced offers responsive to the Government's expressed
requirement and if--
(A) Award will be made to a responsible offeror whose proposal
offers either--
(1) The greatest value (see 15.605(c)) to the Government and price
is a substantial factor in source selection; or
(2) The lowest evaluated price; and
(B) There is no finding that the price of the otherwise successful
offeror is unreasonable. Any such finding must be supported by a
statement of the facts and approved at a level above the contracting
officer;
(ii) There was a reasonable expectation, based on market research
or other assessment, that two or more responsible offerors, competing
independently, would submit priced offers responsive to the
solicitation's expressed requirement, even though only one offer is
received from a responsible, responsive offeror and if--
(A) Based on the offer received, the contracting officer can
reasonably conclude that the offer was submitted with the expectation
of competition, e.g., circumstances indicate that--
(1) The offeror believed that at least one other offeror was
capable of submitting a meaningful, responsive offer; and
(2) The offeror had no reason to believe that other potential
offerors did not intend to submit an offer; and
(B) The determination that the proposed price is based on adequate
price competition and is reasonable is approved at a level above the
contracting officer; or
(iii) Price analysis clearly demonstrates that the proposed price
is reasonable in comparison with current or recent prices for the same
or similar items purchased in comparable quantities, under comparable
terms and conditions under contracts that resulted from adequate price
competition.
(2) Established catalog or market prices--(i) Established catalog
price. Established catalog prices are prices (including discount
prices) recorded in a catalog, price list, schedule, or other
verifiable and established record that (A) are regularly maintained by
the manufacturer or vendor; and (B) are published or otherwise
available for customer inspection.
(ii) Established market price. An established market price is a
price that is established in the course of ordinary and usual trade
between buyers and sellers free to bargain and that can be
substantiated by data from sources independent of the offeror.
(iii) Based on. A price may also be based on an established catalog
or market price if the item or class of items being purchased is not
itself a catalog or market priced commercial item but is sufficiently
similar to the catalog or market priced commercial item to ensure that
any difference in prices can be identified and justified without
resorting to cost analysis.
(iv) Sold in substantial quantities. An item is sold in substantial
quantities if there are sales of more than a nominal quantity based on
the norm of the industry segment. In determining what constitutes a
substantial quantity, the contracting officer should consider such
things as the size of the market; and how recently the item was
introduced into the market. Models, samples, prototypes, and
experimental units are not substantial quantities. For services to be
sold in substantial quantities, they must also be customarily provided
by the offeror, using personnel regularly employed and equipment (if
any is necessary) regularly maintained principally to provide the
services.
(A) The method used to establish sales may be sales order,
contract, shipment, invoice, actual recorded sales, or other records,
so long as the method used is consistent, provides an accurate
indication of sales activity, and is verifiable. If the item would not
otherwise qualify for an exception, sales of the item by affiliates may
be considered. In addition, sales of essentially the same commercial
item by other manufacturers or vendors may be considered in determining
whether sales are substantial, provided that the price of those sales
is also considered. Data to support sales quantities may also come from
other manufacturers, industry associations or marketing groups, annual
financial reports, etc.
(B) An exception may apply for an item based on the market price of
the item regardless of the quantity of sales of the item previously
made by the offeror or the types of customers for these sales, provided
that sales of the same or similar items by other sellers meet the
exception criteria.
(v) General public. The general public ordinarily consists of
buyers other than the U.S. Government or its instrumentalities, e.g.,
U.S. Government corporations. Sales to the general public do not
include sales to affiliates of the offerors or purchases by the U.S.
Government on behalf of foreign governments, such as for Foreign
Military Sales. If the contracting officer can determine without
requiring information from the offeror that sales are for Government
end use, these sales need not be considered sales to the general
public.
(3) Prices set by law or regulation. Pronouncements in the form of
periodic rulings, reviews, or similar actions of a governmental body,
or embodied in the laws are sufficient to set a price.
(4) Commercial items. For acquisition of a commercial item, if the
contracting officer does not have sufficient information to support an
exception under 15.804-1(a)(1) or (a)(4), the contracting officer shall
grant an exception for a contract, subcontract, or modification of a
contract or subcontract if the contracting officer obtains the pricing
information described in 15.804-5(b). Cost or pricing data may be
obtained for such a commercial item only if the contracting officer
makes a written determination that the pricing information is
inadequate for performing a price analysis and determining price
reasonableness.
(5) Exceptional cases. The head of the contracting activity may,
without power of delegation, waive the requirement for submission of
cost or pricing data. The authorization for the waiver and the reasons
for granting it shall be in writing. A waiver may be considered if
another exception does not apply but the price can be determined to be
fair and reasonable without submission of cost or pricing data. For
example, if cost or pricing data were furnished on previous production
buys and the contracting officer determines such data are sufficient,
when combined with updated information, a waiver may be granted. If the
head of the contracting activity has waived the requirement for
submission of cost or pricing data, the contractor or higher-tier
subcontractor to whom the waiver relates shall be considered as having
been required to make available cost or pricing data. Consequently,
award of any lower-tier subcontract expected to exceed the cost or
pricing data threshold requires the submission of cost or pricing data
unless an exception otherwise applies to the subcontract.
(6) Modifications. This exception only applies when the original
contract or subcontract was exempt from cost or pricing data based on
adequate price competition, catalog or market price, or price set by
law or regulation (15.804-1(a)(1)). For modifications of contracts or
subcontracts for commercial items, the exception at 15.804-1(a)(4)
applies if the modification does not change the item from a commercial
item to a noncommercial item. However, if the modification to a
contract or a subcontract changes the nature of the work under the
contract or subcontract either by a change to the commercial item or by
the addition of other noncommercial work, the contracting officer is
not prohibited from obtaining cost or pricing data for the added work.
(c) Special circumstances when purchasing commercial items.
(1) It is not necessary to obtain information supporting an exception for each
line item. Sampling techniques may be used.
(2) If the U.S. Government has acted favorably on an exception
request for the same or similar items, the contracting officer may
consider the prior submissions as support for the current exception
request. Relief from the submission of new information does not relieve
the contracting officer from the requirement to determine
reasonableness of price on the current acquisition.
(3) When acquiring by separate contract an item included on an
active Federal Supply Service or Information Technology Service
Multiple Award Schedule contract, the contracting officer should grant
an exception and not require documentation if the offeror has provided
proof that an exception has been granted for the schedule item. Price
analysis shall be performed in accordance with 15.805-2 to determine
reasonableness of price.
(4) The contracting officer and offeror may make special
arrangements for the submission of exception requests for repetitive
acquisitions. These arrangements can take any form as long as they set
forth an effective period and the exception criteria at 15.804-1 are
satisfied. Such arrangements may be extended to other Government
offices with their concurrence.
(d) Requesting an exception. In order to qualify for an exception,
other than an exception for adequate price competition, from the
requirements to submit cost or pricing data, the offeror must submit a
written request. The solicitation provision at 52.215-41 or other
methods may be used. It is the responsibility of the contracting
officer to determine, based on the information submitted, and any other
information available to the contracting officer, which exception, if
any, applies.
14. Section 15.804-2 is revised to read as follows:
15.804-2 Requiring cost or pricing data.
(a) (1) Pursuant to 10 U.S.C. 2306a and 41 U.S.C. 254b, cost or
pricing data shall be obtained only if the contracting officer
concludes that none of the exceptions in 15.804-1 applies. However, if
the contracting officer has sufficient information available to
determine price reasonableness, then a waiver under the exception at
15.804-1(b)(5) should be considered. The threshold for obtaining cost
or pricing data is $500,000. This amount will be subject to adjustment,
effective October 1, 1995, and every five years thereafter. Unless an
exception applies, cost or pricing data are required before
accomplishing any of the following actions expected to exceed the
threshold in effect on the date of agreement on price, or the date of
award, whichever is later; or, in the case of existing contracts, the
threshold specified in the contract:
(i) The award of any negotiated contract (except for undefinitized
actions such as letter contracts).
(ii) The award of a subcontract at any tier, if the contractor and
each higher-tier subcontractor have been required to furnish cost or
pricing data (but see exceptional cases at 15.804-1(b)(5)).
(iii) The modification of any sealed bid or negotiated contract
(whether or not cost or pricing data were initially required) or
subcontract covered by paragraph (a)(1)(ii) of this subsection. Price
adjustment amounts shall consider both increases and decreases. (For
example, a $150,000 modification resulting from a reduction of $350,000
and an increase of $200,000 is a pricing adjustment exceeding
$500,000.) This requirement does not apply when unrelated and
separately priced changes for which cost or pricing data would not
otherwise be required are included for administrative convenience in
the same modification.
(2) Unless prohibited because an exception at 15.804-1(a)(1)
applies, the head of the contracting activity, without power of
delegation, may authorize the contracting officer to obtain cost or
pricing data for pricing actions below the pertinent threshold in
paragraph (a)(1) of this subsection provided the action exceeds the
simplified acquisition threshold. The head of the contracting activity
shall justify the requirement for cost or pricing data. The
documentation shall include a written finding that cost or pricing data
are necessary to determine whether the price is fair and reasonable and
the facts supporting that finding.
(b) When cost or pricing data are required, the contracting officer
shall require the contractor or prospective contractor to submit to the
contracting officer (and to have any subcontractor or prospective
subcontractor submit to the prime contractor or appropriate
subcontractor tier) the following in support of any proposal:
(1) The cost or pricing data.
(2) A certificate of current cost or pricing data, in the format
specified in 15.804-4, certifying that to the best of its knowledge and
belief, the cost or pricing data were accurate, complete, and current
as of the date of agreement on price or, if applicable, another date
agreed upon between the parties that is as close as practicable to the
date of agreement on price.
(c) If cost or pricing data are requested and submitted by an
offeror, but an exception is later found to apply, the data shall not
be considered cost or pricing data as defined in 15.801 and shall not
be certified in accordance with 15.804-4.
(d) The requirements of this section also apply to contracts
entered into by the head of an agency on behalf of a foreign
government.
15.804-3 [Reserved]
15. Section 15.804-3 is removed and reserved.
16. Section 15.804-4 is amended by revising paragraph (a), the
double asterisk footnote to the certification statement following
paragraph (a), paragraph (c), and paragraph (e); and in paragraphs (f)
and (h) by removing the word ``certified''. The revised text reads as
follows:
15.804-4 Certificate of Current Cost or Pricing Data.
(a) When cost or pricing data are required, the contracting officer
shall require the contractor to execute a Certificate of Current Cost
or Pricing Data, shown following this paragraph (a), and shall include
the executed certificate in the contract file.
Certificate of Current Cost or Pricing Data
* * * * *
* * * Insert the day, month, and year when price negotiations were
concluded and price agreement was reached or, if applicable, another
date agreed upon between the parties that is as close as practicable
to the date of agreement on price.
* * * * *
(c) The contracting officer and contractor are encouraged to reach
a prior agreement on criteria for establishing closing or cutoff dates
when appropriate in order to minimize
delays associated with proposal updates. Closing or cutoff dates should
be included as part of the data submitted with the proposal and, before
agreement on price, data should be updated by the contractor to the
latest closing or cutoff dates for which the data are available. Use of
cutoff dates coinciding with reports is acceptable, as certain data may
not be reasonably available before normal periodic closing dates (e.g.,
actual indirect costs). Data within the contractor's or a
subcontractor's organization on matters significant to contractor
management and to the Government will be treated as reasonably
available. What is significant depends upon the circumstances of each
acquisition.
* * * * *
(e) If cost or pricing data are requested and submitted by an
offeror, but an exception is later found to apply, the data shall not
be considered cost or pricing data and shall not be certified in
accordance with this subsection.
* * * * *
17. Section 15.804-5 is added to read as follows:
15.804-5 Requiring information other than cost or pricing data.
(a)(1) If cost or pricing data are not required because an
exception applies, or an action is at or below the cost or pricing data
threshold, the contracting officer shall make a price analysis to
determine the reasonableness of the price and any need for further
negotiation.
(2) The contracting officer may require submission of information
other than cost or pricing data only to the extent necessary to
determine reasonableness of the price or cost realism. The contractor's
format for submitting such information shall be used unless the
contracting officer determines that use of a specific format is
essential. The contracting officer shall ensure that information used
to support price negotiations is sufficiently current to permit
negotiation of a fair and reasonable price. Requests for updated
offeror information should be limited to information that affects the
adequacy of the proposal for negotiations, such as changes in price
lists. Such data shall not be certified in accordance with 15.804-4.
(3) When an acquisition is based on adequate price competition,
generally no additional information is necessary to determine the
reasonableness of price. However, if it is determined that additional
information is necessary to determine the reasonableness of the price,
the contracting officer shall, to the maximum extent practicable,
obtain the additional information from sources other than the offeror.
In addition, the contracting officer may request information to
determine the cost realism of competing offers or to evaluate competing
approaches.
(4) When cost or pricing data are not required because an action is
at or below the cost or pricing data threshold, information requested
shall include, as a minimum, appropriate information on the prices and
quantities at which the same or similar items have previously been
sold, that is adequate for evaluating the reasonableness of the
proposed price. Cost information may also be required. For example,
cost information might be necessary to support an analysis of material
costs.
(b)(1) When acquiring commercial items for which an exception under
15.804-1(a)(2) may apply, the contracting officer shall seek to obtain
from the offeror or contractor information on prices at which the same
or similar items have been sold in the commercial market, that is
adequate for evaluating, through price analysis, the reasonableness of
the price of the action.
(2) If such information is not available from the offeror or
contractor, the contracting officer shall seek to obtain such
information from another source or sources.
(3) Requests for sales data relating to commercial items shall be
limited to data for the same or similar items during a relevant time
period.
(4) In requesting information from an offeror under this paragraph
(b), the contracting officer shall, to the maximum extent practicable,
limit the scope of the request to include only information that is in
the form regularly maintained by the offeror in commercial operations.
(5) Any information obtained pursuant to this paragraph (b) that is
exempt from disclosure under the Freedom of Information Act (5 U.S.C.
552(b)) shall not be disclosed by the Government.
(c) If, after receipt of offers, the contracting officer concludes
there is insufficient information available to determine price
reasonableness and none of the exceptions applies, then cost or pricing
data shall be obtained.
18. Section 15.804-6 is amended by revising the heading and
paragraphs (a) and (b);
Amending Table 15-2 by:
(a) Revising the heading;
(b) Adding introductory text;
(c) Revising the first paragraph of item 1, and the fourth
paragraph of Item 1 entitled ``Established Catalog or Market Prices/
Prices Set by Law or Regulation'';
(d) Revising item 4; and
(e) Amending 8B by revising the paragraph ``Under Column (2)''
instruction under the table;
Adding Table 15-3 following Table 15-2;
And revising paragraph (c) of 15.804-6; and revising the first
sentence of paragraph (d).
The revised and added text reads as follows:
15.804-6 Instructions for submission of cost or pricing data or
information other than cost or pricing data.
(a) Taking into consideration the hierarchy at 15.802, the
contracting officer shall specify in the solicitation (see 15.804-8 (h)
and (i))--
(1) Whether cost or pricing data are required;
(2) That, in lieu of submitting cost or pricing data, the offeror
may submit a request for exception from the requirement to submit cost
or pricing data;
(3) Whether information other than cost or pricing data is
required, if cost or pricing data are not necessary;
(4) The format (see paragraph (b) of this subsection) in which the
cost or pricing data or information other than cost or pricing data
shall be submitted; and
(5) Necessary preaward or postaward access to offeror's records if
not provided by the use of a standard form or clause.
(b)(1) Cost or pricing data shall be submitted on a SF 1411 unless
required to be submitted on one of the termination forms specified in
subpart 49.6. The SF 1411 shall not be used unless cost or pricing data
are required to be submitted. Contract pricing proposals submitted on a
SF 1411 with supporting attachments shall be prepared in accordance
with Table 15-2 or as specified by the contracting officer. Data
supporting forward pricing rate agreements or final indirect cost
proposals shall be submitted in a format acceptable to the contracting
officer.
(2) If information other than cost or pricing data is required to
support price reasonableness or cost realism, the contracting officer
may require such information to be submitted using a SF 1448. Requests
for information should be tailored so that only necessary data are
requested. The information is not considered cost or pricing data and
shall not be certified in accordance with 15.804-4. Information
submitted on a SF 1448 shall be prepared following the instructions
provided in Table 15-3.
Table 15-2 Instructions for Submission of a Contract Pricing Proposal
When Cost or Pricing Data are Required
The SF 1411 provides a cover sheet for use by offerors to submit
to the Government a pricing proposal of estimated and/or actual
costs only when cost or pricing data are required.
1. The pricing proposal shall be segregated by contract line
item with sufficient detail to permit cost analysis. Attach cost-
element breakdowns, using the applicable formats prescribed in Item
8A, B, or C of this section, for each proposed line item. These
breakdowns must conform to the instructions in the solicitation and
any specific requirements established by the contracting officer.
Furnish supporting breakdowns for each cost element, consistent with
the offeror's cost accounting system.
* * * * *
Established Catalog or Market Prices or Prices Set by Law or
Regulation or Commercial Item Not Covered By Another Exception--When
an exception from the requirement to submit cost or pricing data is
requested, whether the item was produced by others or by the
offeror, provide justification for the exception as required by
15.804-1(d).
* * * * *
4. There is a clear distinction between submitting cost or
pricing data and merely making available books, records, and other
documents without identification. The requirement for submission of
cost or pricing data is met when all accurate cost or pricing data
reasonably available to the offeror have been submitted, either
actually or by specific identification, to the contracting officer
or an authorized representative. As later information comes into the
offeror's possession, it should be promptly submitted to the
contracting officer in a manner that clearly shows how the
information relates to the offeror's price proposal. The requirement
for submission of cost or pricing data continues up to the time of
agreement on price, or another date agreed upon between the parties
if applicable.
* * * * *
8. Headings for Submission of Line-Item Summaries:
* * * * *
B. Change Orders, Modifications, and Claims.
* * * * *
Under Column (2)--Include the current estimates of what the cost
would have been to complete the deleted work not yet performed (not
the original proposal estimates), and the cost of deleted work
already performed.
* * * * *
Table 15-3 Instructions for Submission of Information Other Than Cost
or Pricing Data
SF 1448 is a cover sheet for use by offerors to submit
information to the Government when cost or pricing data are not
required but the contracting officer has requested information to
help establish price reasonableness or cost realism. Such
information is not considered cost or pricing data, and shall not be
certified in accordance with 15.804-4.
1. The information submitted shall be at the level of detail
described in the solicitation or specified by the contracting
officer. The offeror's own format is acceptable unless the
contracting officer determines that use of a specific format is
essential.
A. If adequate price competition is expected, the information
may include cost or technical information necessary to determine the
cost realism and adequacy of the offeror's proposal, e.g.,
information adequate to validate that the proposed costs are
consistent with the technical proposal, or cost breakdowns to help
identify unrealistically priced proposals.
B. If the offer is expected to be at or below the cost or
pricing data threshold, and adequate price competition is not
expected, the information may consist of data to permit the
contracting officer and authorized representatives to determine
price reasonableness, e.g., information to support an analysis of
material costs (when sufficient information on labor and overhead
rates is already available), or information on prices and quantities
at which the offeror has previously sold the same or similar items.
2. Any information submitted must support the price proposed.
Include sufficient detail or cross references to clearly establish
the relationship of the information provided to the price proposed.
Support any information provided by explanations or supporting
rationale as needed to permit the contracting officer and authorized
representatives to evaluate the documentation.
* * * * *
(c) Closing or cutoff dates should be included as part of the data
submitted with the proposal (see 15.804-4(c)).
(d) The requirement for submission of cost or pricing data is met
if all cost or pricing data reasonably available to the offeror are
either submitted or specifically identified in writing by the time of
agreement on price or another time agreed upon by the parties. * * *
* * * * *
19. Section 15.804-7 is amended by revising paragraphs (b)(7)(i),
(ii)(B), and (iii) to read as follows:
15.804-7 Defective cost or pricing data.
* * * * *
(b) * * *
(7)(i) In addition to the price adjustment amount, the Government
is entitled to interest on any overpayments. The Government is also
entitled to penalty amounts on certain of these overpayments.
Overpayment occurs only when payment is made for supplies or services
accepted by the Government. Overpayments would not result from amounts
paid for contract financing as defined in 32.902.
(ii) * * *
(B) Consider the date of each overpayment (the date of overpayment
for this interest calculation shall be (1) the date payment was made
for the related completed and accepted contract items, or (2) for
subcontract defective pricing, the date payment was made to the prime
contractor, based on prime contract progress billings or deliveries,
which included payments for a completed and accepted subcontract item);
and
* * * * *
(iii) In arriving at the amount due for penalties on contracts
where the submission of defective cost or pricing data was a knowing
submission, the contracting officer shall obtain an amount equal to the
amount of overpayment made. Before taking any contractual actions
concerning penalties, the contracting officer shall obtain the advice
of counsel.
* * * * *
20. Section 15.804-8 is amended by revising the heading and adding
paragraphs (h) and (i) to read as follows:
15.804-8 Contract clauses and solicitation provisions.
* * * * *
(h) Requirements for cost or pricing data or information other than
cost or pricing data. Considering the hierarchy at 15.802, the
contracting officer may insert the provision at 52.215-41, Requirements
for Cost or Pricing Data or Information Other Than Cost or Pricing
Data, in solicitations if it is reasonably certain that cost or pricing
data or information other than cost or pricing data will be required.
This provision also provides instructions to offerors on how to request
an exception. Use the provision with Alternate I to specify a format
for cost or pricing data other than the format required by Table 15-2
of 15.804-6(b). Use the provision with Alternate II when copies of the
proposal are to be sent to the administrative contracting officer and
contract auditor. Use the provision with Alternate III when submission
via electronic media is required. Replace the basic provision with
Alternate IV when a SF 1411 will not be required because an exception
may apply, but information other than cost or pricing data is required
as described in 15.804-5.
(i) Requirements for cost or pricing data or information other than
cost or pricing data--modifications. Considering the hierarchy at
15.802, the contracting officer may insert the clause at 52.215-42,
Requirements for Cost or Pricing Data or Information Other Than Cost or
Pricing Data--Modifications, in solicitations and contracts if it is
reasonably certain that cost or pricing data or information other than
cost or pricing data will be required for modifications. This clause
also provides instructions to contractors on how to request an exception. Use the
clause with Alternate I to specify a format for cost or pricing data
other than the format required by Table 15-2 of 15.804-6(b). Use the
clause with Alternate II if copies of the proposal are to be sent to
the administrative contracting officer and contract auditor. Use the
clause with Alternate III if submission via electronic media is
required. Replace the basic clause with Alternate IV if a SF 1411 is
not required because an exception may apply, but information other than
cost or pricing data is required as described in 15.804-5.
21. Section 15.805-1 is amended in the first sentence of paragraph
(a) by inserting a comma after the word ``engineering''; and by adding
paragraph (d) to read as follows:
15.805-1 General.
* * * * *
(d) The Armed Services Pricing Manual (ASPM Volume I, ``Contract
Pricing,'' and Volume 2, ``Price Analysis'') was issued by the
Department of Defense to guide pricing and negotiating personnel. The
ASPM provides detailed discussion and examples applying pricing
policies to pricing problems. The ASPM is available for use for
instruction and professional guidance. However, it is not directive and
its references to Department of Defense forms and regulations should be
considered informational only. Copies of ASPM Vol. 1 (Stock No. 008-
000-00457-9) and Vol. 2 (Stock No. 008-000-00467-6) may be purchased
from the Superintendent of Documents, U.S. Government Printing Office,
by telephone (202) 512-1800 or facsimile (202) 512-2250, or by mail
order from the Superintendent of Documents, P. O. Box 371954,
Pittsburgh, PA 15250-7954.
22. Section 15.805-2 is amended by adding paragraph (f) to read as
follows:
15.805-2 Price analysis.
* * * * *
(f) Comparison of proposed prices with prices for the same or
similar items obtained through market research.
23. Section 15.806-1 is amended in the first sentence of paragraph
(a)(2) by removing the phrase ``claims for exemption'' and inserting
``requests for exception'' in its place, and revising (b) to read as
follows:
15.806-1 General.
* * * * *
(b) Unless the subcontract qualifies for an exception under 15.804-
1, any contractor required to submit cost or pricing data also shall
obtain cost or pricing data before awarding any subcontract or purchase
order expected to exceed the cost or pricing data threshold, or issuing
any modification involving a price adjustment expected to exceed the
cost or pricing data threshold.
* * * * *
24. Section 15.806-2 is amended by revising paragraph (a), the
first sentence of (c), and (d) to read as follows:
15.806-2 Prospective subcontractor cost or pricing data.
(a) The contracting officer shall require a contractor that is
required to submit cost or pricing data also to submit to the
Government (or cause submission of) accurate, complete, and current
cost or pricing data from prospective subcontractors in support of each
subcontract cost estimate that is
(1) $1,000,000 or more,
(2) Both more than the cost or pricing data threshold and more than
10 percent of the prime contractor's proposed price, or
(3) Considered to be necessary for adequately pricing the prime
contract. These subcontract cost or pricing data may be submitted using
a Standard Form (SF) 1411, Contract Pricing Proposal Cover Sheet (Cost
or Pricing Data Required).
* * * * *
(c) If the prospective contractor satisfies the contracting officer
that a subcontract will be priced on the basis of one of the
exceptions, the contracting officer shall not require submission of
cost or pricing data to the Government in that case. * * *
(d) Subcontractor cost or pricing data shall be accurate, complete,
and current as of the date of price agreement or, if applicable,
another date agreed upon between the parties, given on the contractor's
Certificate of Current Cost or Pricing Data. The prospective contractor
shall be responsible for updating a prospective subcontractor's data.
* * * * *
25. Section 15.808 is amended in paragraph (a)(5) introductory text
by removing the word ``certified''; by revising paragraph (a)(6); by
removing paragraph (a)(7) and redesignating paragraphs (a)(8) through
(a)(10) as (a)(7) through (a)(9) to read as follows:
15.808 Price negotiation memorandum.
(a) * * *
(6) If cost or pricing data were not required in the case of any
price negotiation exceeding the cost or pricing data threshold, the
exception used and the basis for it.
* * * * *
26. Section 15.812-1 is amended by revising paragraph (b) and the
second sentence of paragraph (c) to read as follows:
15.812-1 General.
* * * * *
(b) However, the policy in paragraph (a) of this subsection does
not apply to any contract or subcontract item of supply for which the
price is, or is based on, an established catalog or market price of a
commercial item sold in substantial quantities to the general public
under 15.804-1(b)(2) or a commercial item exception under 15.804-
1(b)(4).
(c) * * * The contracting officer shall require similar information
when contracting by negotiation with full and open competition if
adequate price competition is not expected (see 15.804-1(b)(1)). * * *
PART 16--TYPES OF CONTRACTS
16.203-4 [Amended]
27. Section 16.203-4 is amended in paragraphs (a)(1)(ii) and
(b)(1)(ii) by removing ``15.804-3'' and inserting ``15.804-1'' in its
place.
28. Section 16.501(c) is amended by revising the first sentence to
read as follows:
16.501 General.
* * * * *
(c) Indefinite-delivery contracts may provide for firm-fixed-prices
(see 16.202), fixed prices with economic price adjustment (see 16.203),
fixed prices with prospective redetermination (see 16.205), or prices
based on catalog or market prices (see 15.804-1(b)(2)). * * *
28a. Section 16.603-4 is amended after the first sentence in
paragraph (b)(3) by adding a sentence to read as follows:
16.603-4 Contract clauses.
* * * * *
(b)(3) * * * If, at the time of entering into the letter contract,
the contracting officer knows that the definitive contract will be
based on adequate price competition or will otherwise meet the criteria
of 15.804-1 for not requiring submission of cost or pricing data, the
words ``and cost or pricing data supporting its proposal'' may be
deleted from paragraph (a) of the clause. * * *
* * * * *
PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES
29. Section 31.205-26 is amended by revising paragraphs (e) and (f)
to read as follows:
31.205-26 Material costs.
* * * * *
(e) Allowance for all materials, supplies, and services that are
sold or transferred between any divisions, subdivisions, subsidiaries,
or affiliates of the contractor under a common control shall be on the
basis of cost incurred in accordance with this subpart. However,
allowance may be at price when it is the established practice of the
transferring organization to price interorganizational transfers at
other than cost for commercial work of the contractor or any division,
subsidiary, or affiliate of the contractor under a common control, and
when the item being transferred qualifies for an exception under
15.804-1 and the contracting officer has not determined the price to be
unreasonable.
(f) When a catalog or market price exception under 15.804-
1(a)(1)(ii) applies under paragraph (e) of this subsection, the price
should be adjusted to reflect the quantities being acquired and may be
adjusted to reflect the actual cost of any modifications necessary
because of contract requirements.
PART 33--PROTESTS, DISPUTES, AND APPEALS
30. Section 33.207(d) is revised to read as follows:
33.207 Contractor certification.
* * * * *
(d) The aggregate amount of both increased and decreased costs
shall be used in determining when the dollar thresholds requiring
certification are met (see example in 15.804-2(a)(1)(iii) regarding
cost or pricing data).
* * * * *
PART 36--CONSTRUCTION AND ARCHITECT ENGINEERING CONTRACTS
31. Section 36.402 is amended by revising the introductory text of
paragraph (b) and (b)(1) to read as follows:
36.402 Price negotiation.
* * * * *
(b) The contracting officer shall evaluate proposals and associated
cost or pricing data or information other than cost or pricing data and
shall compare them to the Government estimate.
(1) When submission of cost or pricing data is not required (see
15.804-1 and 15.804-2), and any element of proposed cost differs
significantly from the Government estimate, the contracting officer
should request the offeror to submit cost information concerning that
element (e.g., wage rates or fringe benefits, significant materials,
equipment allowances, and subcontractor costs).
* * * * *
PART 45--GOVERNMENT PROPERTY
32. Section 45.103(b)(1) is revised to read as follows:
45.103 Responsibility and liability for Government property.
* * * * *
(b) * * *
(1) Negotiated fixed-price contracts for which the contract price
is not based upon an exception at 15.804-1;
* * * * *
33. Section 45.106(b)(2) is revised to read as follows:
45.106 Government property clauses.
* * * * *
(b) * * *
(2) If the contract is--
(i) A negotiated fixed-price contract for which prices are not
based on an exception at 15.804-1; or
(ii) A fixed-price service contract which is performed primarily on
a Government installation, provided the contracting officer determines
it to be in the best interest of the Government (see 45.103(b)(4)), the
contracting officer shall use the clause with its Alternate I.
* * * * *
PART 46--QUALITY ASSURANCE
46.804 [Amended]
34. Section 46.804 is amended by removing the parenthetical ``(see
15.804-3(c))'' and inserting ``(see 15.804-1(b)(2))''.
PART 49--TERMINATION OF CONTRACTS
35. Section 49.208 is amended in the introductory paragraph by
revising the last sentence to read as follows:
49.208 Equitable adjustment after partial termination.
* * * The contractor shall submit the proposal on SF 1411, Contract
Pricing Proposal Cover Sheet (Cost or Pricing Data Required).
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
35a. Part 52 is amended by removing the derivation lines following
all ``(End of provision)'' or ``(End of clause)'' parentheticals and
Alternates.
36. Section 52.214-27 is amended by revising the date of the clause
and paragraphs (a) and (e)(2) to read as follows:
52.214-27 Price Reduction for Defective Cost or Pricing Data--
Modifications--Sealed Bidding.
* * * * *
Price Reduction for Defective Cost or Pricing Data--Modifications--
Sealed Bidding (Oct. 1995)
(a) This clause shall become operative only for any modification
to this contract involving aggregate increases and/or decreases in
costs, plus applicable profits, expected to exceed the threshold for
the submission of cost or pricing data at FAR 15.804-2(a)(1), except
that this clause does not apply to a modification if an exception
under FAR 15.804-1 applies.
* * * * *
(e) * * *
(2) A penalty equal to the amount of the overpayment, if the
Contractor or subcontractor knowingly submitted cost or pricing data
which were incomplete, inaccurate, or noncurrent.
(End of clause.)
37. Section 52.214-28 is amended by revising the date of the clause
and paragraphs (b) and (d) to read as follows:
52.214-28 Subcontractor Cost or Pricing Data--Modifications--Sealed
Bidding.
* * * * *
Subcontractor Cost or Pricing Data--Modifications--Sealed Bidding (Oct.
1995)
* * * * *
(b) Before awarding any subcontract expected to exceed the
threshold for submission of cost or pricing data at FAR 15.804-
2(a)(1), on the date of agreement on price or the date of award,
whichever is later; or before pricing any subcontract modifications
involving aggregate increases and/or decreases in costs, plus
applicable profits, expected to exceed the threshold for submission
of cost or pricing data at FAR 15.804-2(a)(1), the Contractor shall
require the subcontractor to submit cost or pricing data (actually
or by specific identification in writing), unless an exception under
FAR 15.804-1 applies.
* * * * *
(d) The Contractor shall insert the substance of this clause,
including this paragraph (d), in each subcontract that, when entered
into, exceeds the threshold for submission of cost or pricing data
at FAR 15.804-2(a)(1).
(End of clause.)
52.214-29 [Amended]
37a. Section 52.214-29 is amended in the introductory text by
removing the citation ``14.201-7(e)'' and inserting ``14.201-7(d)'' in
its place.
38. Section 52.215-22 is amended by revising the date of the
clause, and paragraph (d)(2) to read as follows:
52.215-22 Price Reduction for Defective Cost or Pricing Data.
* * * * *
Price Reduction for Defective Cost or Pricing Data (Oct. 1995)
* * * * *
(d) * * *
(2) A penalty equal to the amount of the overpayment, if the
Contractor or subcontractor knowingly submitted cost or pricing data
which were incomplete, inaccurate, or noncurrent.
(End of clause.)
39. Section 52.215-23 is amended by revising the clause date and
paragraphs (a) and (e)(2) to read as follows:
52.215-23 Price Reduction for Defective Cost or Pricing Data--
Modifications
* * * * *
Price Reduction for Defective Cost or Pricing Data--Modifications (Oct.
1995)
(a) This clause shall become operative only for any modification
to this contract involving a pricing adjustment expected to exceed
the threshold for submission of cost or pricing data at FAR 15.804-
2(a)(1), except that this clause does not apply to any modification
f an exception under FAR 15.804-1 applies.
* * * * *
(e) * * *
(2) A penalty equal to the amount of the overpayment, if the
Contractor or subcontractor knowingly submitted cost or pricing data
which were incomplete, inaccurate, or noncurrent.
(End of clause)
40. Section 52.215-24 is amended by revising the date of the
clause, and paragraph (a) to read as follows:
52.215-24 Subcontractor Cost or Pricing Data.
* * * * *
Subcontractor Cost or Pricing Data (Oct 1995)
(a) Before awarding any subcontract expected to exceed the
threshold for submission of cost or pricing data at FAR 15.804-
2(a)(1), on the date of agreement on price or the date of award,
whichever is later; or before pricing any subcontract modification
involving a pricing adjustment expected to exceed the threshold for
submission of cost or pricing data at FAR 15.804-2(a)(1), the
Contractor shall require the subcontractor to submit cost or pricing
data (actually or by specific identification in writing), unless an
exception under FAR 15.804-1 applies.
* * * * *
41. Section 52.215-25 is amended by revising the date of the clause
and paragraphs (b) and (d) to read as follows:
52.215-25 Subcontractor Cost or Pricing Data--Modifications.
* * * * *
Subcontractor Cost or Pricing Data--Modifications (Oct 1995)
(b) Before awarding any subcontract expected to exceed the
threshold for submission of cost or pricing data at FAR 15.804-
2(a)(1), on the date of agreement on price or the date of award,
whichever is later; or before pricing any subcontract modification
involving a pricing adjustment expected to exceed the threshold for
submission of cost or pricing data at FAR 15.804-2(a)(1), the
Contractor shall require the subcontractor to submit cost or pricing
data (actually or by specific identification in writing), unless an
exception under FAR 15.804-1 applies.
* * * * *
(d) The Contractor shall insert the substance of this clause,
including this paragraph (d), in each subcontract that exceeds the
threshold for submission of cost or pricing data at FAR 15.804-
2(a)(1) on the date of agreement on price or the date of award,
whichever is later.
(End of clause)
42. Section 52.215-26 is amended by revising the clause date and
paragraph (b) to read as follows:
52.215-26 Integrity of Unit Prices.
* * * * *
Integrity of Unit Prices (Oct 1995)
* * * * *
(b) The requirement in paragraph (a) of this clause does not apply
to any contract or subcontract item of supply for which the unit price
is, or is based on, an established catalog or market price for a
commercial item sold in substantial quantities to the general public or
to an item qualifying for a commercial item exception to cost or
pricing data. A price is based on an established catalog or market
price only if the item being purchased is sufficiently similar to the
catalog or market priced commercial item to ensure that any difference
in prices can be identified and justified without resort to cost
analysis.
* * * * *
43. Sections 52.215-41 through 52.215-43 are added to read as
follows:
52.215-41 Requirements for Cost or Pricing Data or Information Other
Than Cost or Pricing Data.
As prescribed in 15.804-8(h), insert the following provision:
Requirements for Cost or Pricing Data or Information Other Than Cost or
Pricing Data (Oct 1995)
(a) Exceptions from cost or pricing data. (1) In lieu of
submitting cost or pricing data, offerors may submit a written
request for exception by submitting the information described in the
following subparagraphs. The Contracting Officer may require
additional supporting information, but only to the extent necessary
to determine whether an exception should be granted, and whether the
price is fair and reasonable.
(i) Information relative to an exception granted for prior or
repetitive acquisitions.
(ii) Catalog price information as follows:
(A) Attach a copy of or identify the catalog and its date, or
the appropriate pages for the offered items, or a statement that the
catalog is on file in the buying office to which this proposal is
being made.
(B) Provide a copy or describe current discount policies and
price lists (published or unpublished), e.g., wholesale, original
equipment manufacturer, and reseller.
(C) Additionally, for each catalog item that exceeds ______ *
(extended value not unit price), provide evidence of substantial
sales to the general public. This may include sales order, contract,
shipment, invoice, actual recorded sales or other records that are
verifiable. In addition, if the basis of the price proposal is sales
of essentially the same commercial item by affiliates, other
manufacturers or vendors, those sales may be included. The offeror
shall explain the basis of each offered price and its relationship
to the established catalog price. When substantial general public
sales have also been made at prices other than catalog or price list
prices, the offeror shall indicate how the proposed price relates to
the price of such recent sales in quantities similar to the proposed
quantities.
*Insert dollar amount for sampling (see 15.804-1(c)(1))
---------------------------------------------------------------------------
(iii) Market price information. Include the source and date or
period of the market quotation or other basis for market price, the
base amount, and applicable discounts. The nature of the market
should be described. The supply or service being purchased should be
the same as or similar to the market price supply or service. Data
supporting substantial sales to the general public is also required.
(iv) Identification of the law or regulation establishing the
price offered. If the price is controlled under law by periodic
rulings, reviews, or similar actions of a governmental body, attach
a copy of the controlling document, unless it was previously
submitted to the contracting office.
(v) For a commercial item exception, information on prices at
which the same item or similar items have been sold in the
commercial market.
(2) The offeror grants the Contracting Officer or an authorized
representative the right to examine, at any time before award,
books, records, documents, or other directly pertinent records to
verify any request for an exception under this provision, and the
reasonableness of price. Access does not extend to cost or profit
information or other data relevant solely to the offeror's
determination of the prices to be offered in the catalog or
marketplace.
(b) Requirements for cost or pricing data. If the offeror is not
granted an exception from the requirement to submit cost or pricing
data, the following applies:
(1) The offeror shall submit cost or pricing data on Standard
Form (SF) 1411, Contract Pricing Proposal Cover Sheet (Cost or
Pricing Data Required), with supporting attachments prepared in
accordance with Table 15-2 of FAR 15.804-6(b)(2).
(2) As soon as practicable after agreement on price, but before
contract award (except for unpriced actions such as letter
contracts), the offeror shall submit a Certificate of Current Cost
or Pricing Data, as prescribed by FAR 15.804-4.
(c) By submitting information to qualify for an exception, an
offeror is not representing that this is the only exception that may
apply.
(End of provision)
Alternate I (Oct 1995). As prescribed in 15.804-8(h), substitute
the following paragraph (b)(1) for paragraph (b)(1) of the basic
provision:
(b)(1) The offeror shall submit cost or pricing data on Standard
Form (SF) 1411, Contract Pricing Proposal Cover Sheet (Cost or
Pricing Data Required), with supporting attachments prepared in the
following format:
Alternate II (Oct 1995). As prescribed in 15.804-8(h), add the
following paragraph (d) to the basic provision:
(c) When the proposal is submitted, also submit one copy each,
including the SF 1411 and supporting attachments, to: (1) the
Administrative Contracting Officer, and (2) the Contract Auditor.
Alternate III (Oct. 1995). As prescribed in 15.804-8(h), add the
following paragraph (d) to the basic provision (if Alternate II is
also used, redesignate as paragraph (e)):
(d) Submit the cost portion of the proposal via the following
electronic media: (Insert media format, e.g., electronic spreadsheet
format, electronic mail, etc.).
Alternate IV (Oct. 1995). As prescribed in 15.804-8(h), replace
the text of the basic provision with the following:
(a) Submission of cost or pricing data is not required.
(b) Provide information described below: (Insert description of
the information and the format that are required, including access
to records necessary to permit an adequate evaluation of the
proposed price in accordance with 15.804-6(a)(5). Standard Form
1448, Proposal Cover Sheet (Cost or Pricing Data Not Required), may
be used for information other than cost or pricing data).
52.215-42 Requirements for Cost or Pricing Data or Information Other
Than Cost or Pricing Data--Modifications.
As prescribed in 15.804-8(i), insert the following clause:
Requirements for Cost or Pricing Data or Information Other Than Cost or
Pricing Data--Modifications (Oct. 1995)
(a) Exceptions from cost or pricing data. (1) In lieu of
submitting cost or pricing data for modifications under this
contract, for price adjustments expected to exceed the threshold set
forth at FAR 15.804-2(a)(1) on the date of the agreement on price or
the date of the award, whichever is later, the Contractor may submit
a written request for exception by submitting the information
described in the following subparagraphs. The Contracting Officer
may require additional supporting information, but only to the
extent necessary to determine whether an exception should be
granted, and whether the price is fair and reasonable--
(i) Information relative to an exception granted for prior or
repetitive acquisitions.
(ii) Catalog price information as follows:
(A) Attach a copy of or identify the catalog and its date, or
the appropriate pages for the offered items, or a statement that the
catalog is on file in the buying office to which this proposal is
being made.
(B) Provide a copy or describe current discount policies and
price lists (published or unpublished), e.g., wholesale, original
equipment manufacturer, and reseller.
(C) Additionally, for each catalog item that exceeds ______*
(extended value not unit price), provide evidence of substantial
sales to the general public. This may include sales order, contract,
shipment, invoice, actual recorded sales or other records that are
verifiable. In addition, if the basis of the price proposal is sales
of essentially the same commercial item by affiliates, other
manufacturers or vendors, those sales may be included. The offeror
shall explain the basis of each offered price and its relationship
to the established catalog price. When substantial general public
sales have also been made at prices other than catalog or price list
prices, the offeror shall indicate how the proposed price relates to
the price of such recent sales in quantities similar to the proposed
quantities.
*Insert dollar amount for sampling (see 15.804-1(c)(1)).
---------------------------------------------------------------------------
(iii) Market price information. Include the source and date or
period of the market quotation or other basis for market price, the
base amount, and applicable discounts. The nature of the market
should be described. The supply or service being purchased should be
the same as or similar to the market price supply or service. Data
supporting substantial sales to the general public is also required.
(iv) Identification of the law or regulation establishing the
price offered. If the price is controlled under law by periodic
rulings, reviews, or similar actions of a governmental body, attach
a copy of the controlling document, unless it was previously
submitted to the contracting office.
(v) Information on modifications of contracts or subcontracts
for commercial items.
(A) If (1) The original contract or subcontract was granted an
exception from cost or pricing data requirements because the price
agreed upon was based on adequate price competition, catalog or
market prices of commercial items, or prices set by law or
regulation; and (2) the modification (to the contract or
subcontract) is not exempted based on one of these exceptions, then
the Contractor may provide information to establish that the
modification would not change the contract or subcontract from a
contract or subcontract for the acquisition of a commercial item to
a contract or subcontract for the acquisition of an item other than
a commercial item.
(B) For a commercial item exception, the Contractor may provide
information on prices at which the same item or similar items have
been sold in the commercial market.
(2) The Contractor grants the Contracting Officer or an
authorized representative the right to examine, at any time before
books, records, documents, or other directly pertinent
records to verify any request for an exception under this clause,
and the reasonableness of price. Access does not extend to cost or
profit information or other data relevant solely to the Contractor's
determination of the prices to be offered in the catalog or
marketplace.
(3) By submitting information to qualify for an exception, an
offeror is not representing that this is the only exception that may
apply.
(b) Requirements for cost or pricing data. If the Contractor is
not granted an exception from the requirement to submit cost or
pricing data, the following applies:
(1) The Contractor shall submit cost or pricing data on Standard
Form (SF) 1411, Contract Pricing Proposal Cover Sheet (Cost or
Pricing Data Required), with supporting attachments prepared in
accordance with Table 15-2 of FAR 15.804-6(b)(2).
(2) As soon as practicable after agreement on price, but before
award (except for unpriced actions), the Contractor shall submit a
Certificate of Current Cost or Pricing Data, as prescribed by FAR 15.804-4.
Alternate I (Oct. 1995). As prescribed in 15.804-8(i),
substitute the following paragraph (b)(1) for paragraph (b)(1) of
the basic clause.
(b)(1) The Contractor shall submit cost or pricing data on
Standard Form (SF) 1411, Contract Pricing Proposal Cover Sheet (Cost
or Pricing Data Required), with supporting attachments prepared in
the following format:
Alternate II (Oct. 1995). As prescribed in 15.804-8(i), add the
following paragraph (c) to the basic clause:
(c) When the proposal is submitted, also submit one copy each,
including the SF 1411 and supporting attachments, to: (1) The
administrative Contracting Officer, and (2) the Contract Auditor.
Alternate III (Oct. 1995). As prescribed in 15.804-8(i), add the
following paragraph (c) to the basic clause (if Alternate II is also
used, redesignate as paragraph (d)):
(c) Submit the cost portion of the proposal via the following
electronic media: (Insert media format).
Alternate IV (Oct. 1995). As prescribed in 15.804-8(i), replace
the text of the basic clause with the following:
(a) Submission of cost or pricing data is not required.
(b) Provide information described below: (Insert description of
the information and the format that are required, including access
to records necessary to permit an adequate evaluation of the
proposed price in accordance with 15.804-6(a)(5). Standard Form
1448, Proposal Cover Sheet (Cost or Pricing Data Not Required), may
be used for information other than cost or pricing data.)
52.215-43 Audit--Commercial Items.
As prescribed at 15.106-2, insert the following clause:
Audit--Commercial Items (Oct. 1995)
(a) As used in this clause, records include books, documents,
accounting procedures and practices, and other data, regardless of
type and regardless of whether such items are in written form, in
the form of computer data, or any other form.
(b) This paragraph applies to solicitations and contracts or
subcontracts for commercial items that may be or have been granted
an exception from submittal of cost or pricing data only under FAR
15.804-1(a)(2). In order to determine the accuracy of the
information on prices at which the same or similar items have been
sold in the commercial market, the Contracting Officer and
authorized representatives have a right to examine such information
provided by the offeror, Contractor, or subcontractor, and all
records that directly relate to such information. Access does not
extend to cost or profit information or other data relevant solely
to the offeror's determination of the prices to be offered in the
marketplace. This right shall expire two years after the date of
award of the contract, or two years after the date of any
modification to the contract, with respect to which this information
is provided.
(c) If the prime Contractor and each higher-tier subcontractor
were required to submit cost or pricing data, the Contractor and
each subcontractor shall insert the substance of this clause,
including this paragraph (c), in each subcontract for which
submission of cost or pricing data was required or for which an
exception was granted under FAR 15.804-1(a)(2).
(End of clause.)
52.216-2 [Amended]
44. Section 52.216-2 is amended in the clause heading by revising
the date to read ``(Oct. 1995)''; in paragraph (a)(2) by removing
``15.804-3'' and inserting ``15.804-1'' in its place; and removing the
parenthetical following ``(End of clause)''.
52.216-3 [Amended]
45. Section 52.216-3 is amended in the clause heading by removing
``(APR 1984)'' and inserting ``(Oct. 1995)''; in paragraph (a)(2) by
removing the reference ``15.804-3'' and inserting ``15.804-1''; and by
removing the parenthetical following ``(End of clause)''.
46. Section 52.216-5 is amended by revising the clause date and
paragraph (d)(1)(i)(A); and by removing the parenthetical following
``(End of clause)'' to read as follows:
52.216-5 Price Redetermination--Prospective.
* * * * *
Price Redetermination--Prospective (Oct. 1995)
* * * * *
(d) * * *
(1) * * *
(i) * * *
(A) An estimate and breakdown of the costs of these supplies or
services on Standard Form 1411, Contract Pricing Proposal Cover
Sheet (Cost or Pricing Data Required), or in any other form on which
the parties may agree;
* * * * *
47. Section 52.216-6 is amended by revising the introductory text,
the clause date, and paragraph (c)(1)(ii) to read as follows:
52.216-6 Price Redetermination--Retroactive.
As prescribed in 16.206-4, insert the following clause:
Price Redetermination--Retroactive (Oct. 1995)
* * * * *
(c) * * *
(1) * * *
(ii) A statement on Standard Form 1411, Contract Pricing
Proposal Cover Sheet (Cost or Pricing Data Required), or in any
other form on which the parties may agree, of all costs incurred in
performing the contract; and
* * * * *
48. Section 52.216-25 is amended by revising the introductory
paragraph; and the parentheticals following the end of the main clause
and the end of Alternate I are removed to read as follows:
52.216-25 Contract Definitization.
As prescribed in 16.603-4(b)(3), insert the following clause:
* * * * *
49. Section 52.222-48 is amended by revising the clause date,
redesignating paragraphs (a) (i), (ii), and (iii) as (a) (1), (2), and
(3), and revising newly redesignated paragraph (a)(2) to read as
follows:
52.222-48 Exemption from Application of Service Contract Act
Provisions for Contracts for Maintenance, Calibration, and/or Repair of
Certain ADP, Scientific and Medical and/or Office and Business
Equipment--Contractor Certification.
* * * * *
Exemption From Application of Service Contract Act Provisions for
Contracts for Maintenance, Calibration, and/or Repair of Certain ADP,
Scientific and Medical and/or Office and Business Equipment--Contractor
Certification (Oct. 1995)
(a) * * * (2) The contract services are furnished at prices
which are, or are based on, established catalog or market prices for
the maintenance, calibration, and/or repair of certain ADP,
scientific and medical and/or office and business equipment. An
``established catalog price'' is a price (including discount price)
recorded in a catalog, price list, schedule, or other verifiable and
established record that is regularly maintained by the manufacturer
or the Contractor and is either published or otherwise available for
inspection by customers. An ``established market price'' is a
current price, established in the course of ordinary and usual trade
between buyers and sellers free to bargain, which can be
substantiated by data from sources independent of the manufacturer
or Contractor; and * * *
* * * * *
PART 53--FORMS
50. Section 53.215-2 is revised to read as follows:
53.215-2 Price negotiation (SF's 1411 and 1448).
The following standard forms are prescribed for use in connection
with requirements for obtaining cost or pricing data or information
other than cost or pricing data from offerors or contractors, as
specified in 15.804:
(a) SF 1411 (REV. OCT./95), Contract Pricing Proposal Cover Sheet
(Cost or Pricing Data Required). (See 15.804-6(b)(1).) SF 1411 is
authorized for local reproduction and a copy is furnished for this
purpose in Part 53 of the loose-leaf edition of the FAR.
(b) SF 1448 (OCT/95), Proposal Cover Sheet (Cost or Pricing Data
Not Required). (See 15.804-6(b)(2).) SF 1448 is authorized for local
reproduction and a copy is furnished for this purpose in Part 53 of the
loose-leaf edition of the FAR.
51. Section 53.301-1411 is revised and 53.301-1448 is added to read
as follows:
BILLING CODE 6820-EP-P
53.301-1411 Contract Pricing Proposal Cover Sheet.
TR18SE95.000
BILLING CODE 6820-EP-C
53.301 Proposal Cover Sheet
BILLING CODE 6820-EP-P
TR18SE95.001
[Federal Register: September 18, 1995 (Volume 60, Number 180)]
[Rules and Regulations]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
48 CFR Parts 1, 33, 42, 50, and 52
[FAC 90-32; FAR Case 94-730; Item II]
RIN 9000-AG28
Federal Acquisition Regulation; Protests, Disputes, and Appeals
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
--------------------------------------------------------------------------
SUMMARY: This final rule is issued pursuant to the Federal Acquisition
Streamlining Act of 1994 (Pub. L. 103-355) (the Act) dated October 13,
1994, to implement the Act's requirements with respect to disputes and
protests to the General Accounting Office and General Services
Administration Board of Contract Appeals. This regulatory action was
subject to Office of Management and Budget review under Executive Order
12866, dated September 30, 1993.
DATES: Effective date: October 1, 1995.
Applicability date: Where this rule repeats a GSBCA rule that went
into effect earlier, the date of the GSBCA rule and its applicability
provision prevails; otherwise, this rule is applicable to protests or
claims filed on or after the effective date of this rule.
FOR FURTHER INFORMATION CONTACT: Mr. Craig E. Hodge, Protests/Disputes
Team Leader, at (703) 274-8940 in reference to this FAR case. For
general information, contact the FAR Secretariat, Room 4037, GS
Building, Washington, DC 20405 (202) 501-4755. Please cite FAC 90-32,
FAR case 94-730, Protests, Disputes and Appeals.
SUPPLEMENTARY INFORMATION:
A. Background
The Federal Acquisition Streamlining Act of 1994, Pub. L. 103-355,
(the Act) provides authorities that streamline the acquisition process
and minimize burdensome Government-unique requirements.
This notice announces FAR revisions developed under FAR Case 94-
730, Protests, Disputes, and Appeals. The Act changed the General
Accounting Office (GAO) protest procedures, the General Services Board
of Contract Appeals (GSBCA) protest procedures, and the alternative
dispute resolution (ADR) procedures. This rule reflects those changes
to GAO, GSBCA, and ADR procedures that require revisions to the FAR.
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 a relatively small
number of firms file protests or claims. In addition, this rule is
generally derivative of GAO and GSBCA rules which implement the
statute. Neither the GAO nor the GSBCA concluded that the rules they
were promulgating, which form the basis for this rule, had a
significant economic impact on a substantial number of small entities.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the change to
the FAR does 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. Public Comments
On January 10, 1995, a proposed rule was published in the Federal
Register (60 FR 2630). In response to the notice of proposed
rulemaking, 19 public comments were received.
The largest number of public comments concerned the definition of
``accrual''. Some commenters felt that contractor and Government claims
were to be treated differently because ``accrual'' was defined only in
terms of the contractor claim. To resolve that problem, a general
definition of ``accrual'' has been added. Several commenters requested
retroactive language be added. Therefore, the six-year limitation was
specifically applied only to contracts awarded after the end of the
current fiscal year. There were also a number of alternate definitions
of ``accrual'' proposed. In addition to the discovery of the events, a
discovery of some damage has been added to cover the unusual case where
the party is aware of the events giving rise to the claim, but not of
any resulting damage.
In the protest area, commenters exhibited the most interest in the
GAO bid protest file, and requested guidance on GAO and GSBCA witness
fee limitations. The protest file requirement has been clarified.
Although the GAO rule was concerned with providing protest files to the
intervenors, Congress mandated protest files be made available by the
contracting officer even to parties which failed to intervene. The
extent to which the discussion of protest files differs between the
proposed GAO regulation and this regulation reflects that difference.
In any event, the GAO final regulation dropped the requirement for a
protest file. Further specific guidance concerning witness fee
limitations has now been incorporated in the regulation.
List of Subjects in 48 CFR Parts 1, 33, 42, 50 and 52
Government procurement.
Dated: September 7, 1995.
Edward C. Loeb,
Deputy Project Manager for the Implementation of the Federal
Acquisition Streamlining Act of 1994.
Therefore, 48 CFR Parts 1, 33, 42, 50, and 52 are amended as set
forth below:
1. The authority citation for 48 CFR Parts 1, 33, 42, 50, 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 SYSTEM
2. Section 1.602-3 is amended by revising paragraph (c)(2) to read
as follows:
1.602-3 Ratification of unauthorized commitments.
* * * * *
(c) * * *
(2) The ratifying official has the authority to enter into a
contractual commitment;
* * * * *
PART 33--PROTESTS, DISPUTES, AND APPEALS
3. Section 33.101 is amended by adding in alphabetical order the
definitions ``Day'' and ``Filed'', and revising the definition
``Protest'' to read as follows:
33.101 Definitions.
Day, as used in this subpart, means a calendar day, unless
otherwise specified. In the computation of any period--
(a) The day of the act, event, or default from which the designated
period of time begins to run is not included; and
(b) The last day after the act, event, or default is included
unless--
(1) The last day is a Saturday, Sunday, or legal holiday; or
(2) In the case of a filing of a paper at any appropriate
administrative forum, the last day is a day on which weather or other
conditions cause the closing of the forum for all or part of the day,
in which event the next day on which the appropriate administrative
forum is open is included.
(c) In the case of the 5-day period after a debriefing date and the
10-day period after contract award for filing a protest resulting in a
suspension (as described at 33.104(c)), Saturdays, Sundays, and legal
holidays shall be counted.
Filed, as used in this subpart, means the complete receipt of any
document by an agency before its close of business. Documents received
after close of business are considered filed as of the next day. Unless
otherwise stated, the agency close of business is presumed to be 4:30
p.m., local time.
* * * * *
Protest, as used in this subpart, means a written objection by an
interested party to any of the following:
(a) A solicitation or other request by an agency for offers for a
contract for the procurement of property or services.
(b) The cancellation of the solicitation or other request.
(c) An award or proposed award of the contract.
(d) A termination or cancellation of an award of the contract, if
the written objection contains an allegation that the termination or
cancellation is based in whole or in part on improprieties concerning
the award of the contract.
4. Section 33.102 is amended by revising paragraph (a);
redesignating paragraphs (b) and (c) as (c) and (e), respectively, and
adding new paragraphs (b) and (d); and revising newly designated
paragraphs (e)(2) and (e)(3) to read as follows:
33.102 General.
(a) Contracting officers shall consider all protests and seek legal
advice, whether protests are submitted before or after award and
whether filed directly with the agency, the General Accounting Office
(GAO), or for automatic data processing acquisitions under 40 U.S.C.
759 (ADP contracts), the General Services Board of Contract Appeals
(GSBCA or the Board). (See 19.302 for protests of small business status
and 22.608-3 for protests involving eligibility under the Walsh-Healey
Public Contracts Act.)
(b) If, in connection with a protest, the head of an agency
determines that a solicitation, proposed award, or award does not
comply with the requirements of law or regulation, the head of the
agency may--
(1) Take any action that could have been recommended by the
Comptroller General had the protest been filed with the General
Accounting Office; and
(2) Pay appropriate costs as stated in 33.104(h).
* * * * *
(d) Protest likely after award. The contracting officer may stay
performance of a contract within the time period contained in
33.104(c)(1) if the contracting officer makes a written determination
that--
(1) A protest is likely to be filed; and
(2) Delay of performance is, under the circumstances, in the best
interests of the United States.
(e) * * *
(2) May protest to the GAO in accordance with GAO regulations (4
CFR Part 21). An interested party who has filed a protest regarding an
ADP procurement with the GAO may not file a protest with the GSBCA with
respect to that procurement.
(3) May protest to the GSBCA regarding an award of an ADP contract
in accordance with GSBCA Rules of Procedure (48 CFR Chapter 61). An
interested party who has filed a protest regarding an ADP procurement
with GSBCA (40 U.S.C. 759(f)) may not file a protest with the GAO with
respect to that procurement.
5. Section 33.103 is amended in the first sentence of (b)(1) by
removing ``or'' and inserting ``and'' in its place; revising the second
and third sentences of (b)(2) and the second sentence in (b)(4); and
adding (b)(5) to read as follows:
33.103 Protests to the agency.
* * * * *
(b) * * *
(2) * * * In all other cases, protests shall be filed not later
than 14 days after the basis of protest is known or should have been
known, whichever is earlier. The agency, for good cause shown, or where
it determines that a protest raises issues significant to the agency's
acquisition system, may consider the merits of any protest which is not
timely filed.
* * * * *
(4) * * * Failure to substantially comply with any of the
requirements of this paragraph (b) may be grounds for dismissal of the
protest.
(5) The agency should furnish a copy of the written protest ruling
to the protester by certified mail, return receipt requested, or by any
other method that provides evidence of receipt.
6. Section 33.104 is amended--
a. By revising the introductory text, paragraphs (a)(1), (a)(3),
the first sentence of (a)(4)(i) introductory text, (a)(4)(ii) (A) and
(B), (a)(5) introductory text, (a)(5) (i), (ii), and (iii), (a)(6),
(c)(1), (c)(5), (e), (f), (g), and (h);
b. By removing from the first sentence of (a)(2) the words
``substantial and'';
c. By adding a sentence to the end of paragraph (a)(2)(ii); and
d. By removing from (b)(1)(ii) the word ``calendar''; and by
removing the word ``protestor'' and inserting ``protester'' in
(a)(4)(i) introductory text, (a)(4)(ii)(C), and (d), and by removing
the word ``Protestor's'' in paragraph (a)(4)(i)(B) and adding
``Protester's'' in its place.
The revised and added text reads as follows:
33.104 Protests to GAO.
Procedures for protests to GAO are found at 4 CFR Part 21 (GAO Bid
Protest Regulations). In the event guidance concerning GAO procedure in
this section conflicts with 4 CFR Part 21, 4 CFR Part 21 governs.
(a) General procedures. (1) A protester is required to furnish a
copy of its complete protest to the official and location designated in
the solicitation or, in the absence of such a designation, to the
contracting officer, so it is received no later than 1 day after the
protest is filed with the GAO. The GAO may dismiss the protest if the
protester fails to furnish a complete copy of the protest within 1 day.
(2) * * *
(ii) * * * However, if the protester has identified sensitive information and requests a protective order, then the contracting officer shall obtain a redacted version from the protester to furnish to other interested parties, if one has not already been provided.
(3)(i) Upon notice that a protest has been filed with the GAO, the contracting officer shall immediately begin compiling the information
necessary for a report to the GAO. The agency shall submit a complete
report to the GAO within 35 days after the GAO notifies the agency by
telephone that a protest has been filed, or within 20 days after
receipt from the GAO of a determination to use the express option,
unless the GAO--
(A) Advises the agency that the protest has been dismissed; or
(B) Authorizes a longer period in response to an agency's request for an extension. Any new date is documented in the agency's file.
(ii) When a protest is filed with the GAO, and an actual or prospective offeror so requests, the procuring agency
shall, in accordance with any applicable protective orders, provide
actual or prospective offerors reasonable access to the protest file.
However, if the GAO dismisses the protest before the documents are
submitted to the GAO, then no protest file need be made available.
Information exempt from disclosure under 5 U.S.C. 552 may be redacted
from the protest file. The protest file shall be made available to non-
intervening actual or prospective offerors within a reasonable time
after submittal of an agency report to the GAO. The protest file shall
include an index and as appropriate--
(A) The protest;
(B) The offer submitted by the protester;
(C) The offer being considered for award or being protested;
(D) All relevant evaluation documents;
(E) The solicitation, including the specifications or portions
relevant to the protest;
(F) The abstract of offers or relevant portions; and
(G) Any other documents that the agency determines are relevant to
the protest, including documents specifically requested by the
protester.
(iii) The agency report to the GAO shall include--
(A) A copy of the documents described in 33.104(a)(3)(ii);
(B) The contracting officer's signed statement of relevant facts
and a memorandum of law. The contracting officer's statement shall set
forth findings, actions, and recommendations, and any additional
evidence or information not provided in the protest file that may be
necessary to determine the merits of the protest;
(C) A list of the documents withheld from the protester, or
intervenors, and the reasons for withholding them. The list identifies
any documents specifically requested by, and withheld from, the
protester; and
(D) A list of parties being provided the documents.
(4)(i) At the same time the agency submits its report to the GAO,
the agency shall furnish copies of its report to the protestor and any
intervenors. * * *
* * * * *
(ii)(A) If the protester requests additional documents within 2
days after the protester knew the existence or relevance of additional
documents, or should have known, the agency shall provide the requested
documents to the GAO within 5 days of receipt of the request.
(B) The additional documents shall also be provided to the
protester and other interested parties within this 5-day period unless
the agency has decided to withhold them for any reason (see subdivision
(a)(4)(i) of this section). This includes any documents covered by a
protective order issued by the GAO. Documents covered by a protective
order shall be provided only in accordance with the terms of the order.
* * * * *
(5) The GAO may issue protective orders which establish terms,
conditions, and restrictions for the provision of any document to an
interested party. Protective orders prohibit or restrict the disclosure
by the party of procurement sensitive information, trade secrets or
other proprietary or confidential research, development or commercial
information that is contained in such document. Protective orders do
not authorize withholding any documents or information from the United
States Congress or an executive agency.
(i) Requests for protective orders. Any party seeking issuance of a protective order shall file its request with the GAO as soon as practicable after the protest is filed, with copies furnished
simultaneously to all parties.
(ii) Exclusions and rebuttals. Within 2 days after receipt of a copy of the protective order request, any party may file with the GAO a request that particular documents be excluded from the coverage of the protective order, or that particular parties or individuals be included in or excluded from the protective order. Copies of the request shall be furnished simultaneously to all parties.
(iii) Additional documents. If the existence or relevance of
additional documents first becomes evident after a protective order has
been issued, any party may request that these additional documents be
covered by the protective order. Any party to the protective order also
may request that individuals not already covered by the protective
order be included in the order. Requests shall be filed with the GAO,
with copies furnished simultaneously to all parties.
* * * * *
(6) The protester and other interested parties are required to
furnish a copy of any comments on the agency report directly to the GAO
within 14 days, or 7 days if express option is used, after receipt of
the report, with copies provided to the contracting officer and to
other participating interested parties. If a hearing is held, these
comments are due within 7 days after the hearing.
* * * * *
(c) Protests after award. (1) When the agency receives notice of a
protest from the GAO within 10 days after contract award or within 5
days after a debriefing date offered to the protester for any
debriefing that is required by 15.1004, whichever is later, the
contracting officer shall immediately suspend performance or terminate
the awarded contract, except as provided in paragraphs (c) (2) and (3)
of this section.
* * * * *
(5) When the agency receives notice of a protest filed with the GAO
after the dates contained in subparagraph (c)(1), the contracting
officer need not suspend contract performance or terminate the awarded
contract unless the contracting officer believes that an award may be
invalidated and a delay in receiving the supplies or services is not
prejudicial to the Government's interest.
* * * * *
(e) Hearings. The GAO may hold a hearing at the request of the
agency, a protester, or other interested party who has responded to the
notice in paragraph (a)(2) of this section. A recording or
transcription of the hearing will normally be made, and copies may be
obtained from the GAO. All parties may file comments on the hearing and
report within 7 days of the hearing.
(f) GAO decision time. GAO issues its recommendation on a protest
within 125 days from the date of filing of the protest with the GAO, or
within 65 days under the express option. The GAO attempts to issue its
recommendation on an amended protest that adds a new ground of protest
within the time limit of the initial protest. If an amended protest
cannot be resolved within the initial time limit, the GAO may resolve
the amended protest through an express option.
(g) Notice to GAO. If the agency has not fully implemented the GAO
recommendations with respect to a solicitation for a contract or an
award or a proposed award of a contract within 60 days of receiving the
GAO recommendations, the head of the contracting activity responsible
for that contract shall report the failure to the GAO not later than 5
days after the expiration of the 60-day period. The report shall
explain the reasons why the GAO's recommendation, exclusive of costs,
has not been followed by the agency.
(h) Award of costs. (1) If the GAO determines that a solicitation
for a contract, a proposed award, or an award of a contract does not
comply with a statute or regulation, the GAO may recommend that the
agency pay to an appropriate protester the cost, exclusive
of profit, of filing and pursuing the protest, including reasonable
attorney, consultant and expert witness fees, and bid and proposal
preparation costs. The agency shall use funds available for the
procurement to pay the costs awarded.
(2) If the GAO recommends the award of costs to an interested
party, the agency shall attempt to reach an agreement on the amount of
the cost to be paid. If the agency and the interested party are unable
to agree on the amount to be paid, GAO may, upon request of the
interested party, recommend to the agency the amount of cost that the
agency should pay.
(3) No agency shall pay a party, other than a small business
concern within the meaning of section 3(a) of the Small Business Act
(see 19.001, ``Small business concern''), costs under paragraph (h)(2)
of this section--
(i) For consultant and expert witness fees that exceed the highest
rate of compensation for expert witnesses paid by the Government
pursuant to 5 U.S.C. 3109 and Expert and Consultant Appointments, 60 FR
45649, September 1, 1995 (5 CFR 304.105); or
(ii) For attorneys' fees that exceed $150 per hour, unless the
agency determines, based on the recommendation of the Comptroller
General on a case-by-case basis, that an increase in the cost of living
or a special factor, such as the limited availability of qualified
attorneys for the proceedings involved, justifies a higher fee. The cap
placed on attorneys' fees for businesses, other than small businesses,
constitutes a benchmark as to a ``reasonable'' level for attorneys'
fees for small businesses.
(4) A recommended award of costs may be paid by the agency from
funds available to or for the use of the agency for the acquisition of
supplies or services. Before paying a recommended award of costs,
agency personnel should consult legal counsel. Section 33.104(h)
applies to all recommended awards of costs which have not yet been
paid.
(5) If the GAO recommends that the agency pay costs (as defined in
paragraph (h)(1) of this section) and the agency does not promptly pay
the costs, the agency shall promptly report to GAO the reasons for the
failure to follow the GAO recommendation.
(6) Any costs the contractor receives under this section shall not
be the subject of subsequent proposals, billings, or claims against the
Government and those exclusions should be reflected in the cost
agreement.
7. Section 33.105 is amended--
a. By adding an introductory paragraph;
b. By revising (a)(1) and the introductory text of (d)(1);
c. By removing from (a)(2)(i) ``working day'' and inserting ``work
day'' in its place, from (a)(2)(ii) ``five working days'' and inserting
``3 work days''; from (b)(6) ``protestors'' and inserting
``protesters''; from (c) ``15'' and inserting ``10'', from (d)(1)(i)
the word ``calendar'', and from (e) ``25 work days'' and ``45 work
days'' and inserting ``35 days'' and ``65 days'', respectively;
d. By redesignating paragraphs (f) and (g) as (g) and (h),
respectively, and revising the newly redesignated (g) and (h), and
f. By adding new paragraphs (d)(4) and (f).
The revised and added text reads as follows:
33.105 Protests to GSBCA.
Procedures for protests to the GSBCA, are found at 48 CFR Chapter
61 (GSBCA Rules). In the event guidance concerning GSBCA procedures in
this subpart conflicts with 48 CFR Chapter 61, 48 CFR Chapter 61
governs.
(a)(1) Upon request of an interested party in connection with any
procurement that is subject to Section 111 of the Federal Property and
administrative Services Act (40 U.S.C. 759), the GSBCA reviews any
decision by the contracting officer that is alleged to violate a
statute, a regulation, or the conditions of a delegation of procurement
authority. ADP acquisition protests not covered under this section may
not be heard by the GSBCA, but may be heard by the agency, the courts,
or GAO. A protester shall furnish a copy of its complete protest to the
official and location designated in the solicitation, or in the absence
of such a designation, to the contracting officer on the same day the
protest is filed with the GSBCA. Any request for a hearing on either a
suspension of procurement authority or on the merits shall be in the
protest.
* * * * *
(d)(1) If a protest contains a timely request for a suspension of
procurement authority, the Board will hold a hearing, unless the agency
does not contest an order suspending its procurement authority. A
timely request for suspension of procurement authority is one that is
filed before award, within 10 days of award, or within five days of the
offered debriefing, when the debriefing is required by 15.1004,
whichever applies. The Board suspends the procurement authority unless
the agency establishes that--
* * * * *
(4) A suspension shall not preclude the agency concerned from
continuing the procurement process up to, but not including, the award
of the contract unless the Board determines the action is not in the
best interests of the United States.
* * * * *
(f) Any agreement that provides for the dismissal of a protest and
involves a direct or indirect expenditure of appropriated funds shall
be made part of the public record (subject to any protective order
considered appropriate by the Board) before dismissal of the protest.
If an agency is party to a settlement agreement, the submission of the
agreement to the Board shall include a memorandum, signed by the
contracting officer concerned, that describes in detail the
procurement, the grounds for protest, the Government's position
regarding the grounds for protest, the terms of the settlement, and the
agency's position regarding the propriety of the award or proposed
award of the contract at issue in the protest.
(g)(1) The GSBCA may declare an appropriate prevailing party to be
entitled to the cost, exclusive of profit, of--
(i) Filing and pursuing the protest, including reasonable attorney,
consultant and expert witness fees; and
(ii) Bid and proposal preparation.
(2) Costs awarded under subparagraph (g)(1) of this section, or
payments of amounts due under settlement agreements, shall be paid out
in accordance with the procedures provided in 31 U.S.C. 1304 (the
Permanent Indefinite Judgment Fund). The agency concerned shall
reimburse that fund out of funds available for the procurement.
(3) No agency shall pay a party, other than a small business
concern within the meaning of section 3(a) of the Small Business Act
(see 19.001, ``Small business concern''), costs under paragraph (g)(1)
of this section for--
(i) Consultant and expert witness fees that exceed the highest rate
of compensation for expert witnesses paid by the Government pursuant to
5 U.S.C. 3109 and Expert and Consultant Appointments, 60 FR 45649,
September 1, 1995 (5 CFR 304.105); or
(ii) Attorneys' fees that exceed $150 per hour, unless the Board
determines, on a case-by-case basis, that an increase in the cost of
living or a special factor, such as the limited availability of
qualified attorneys for the proceedings involved, justifies a higher
fee. The cap placed on attorneys' fees for businesses, other than small
businesses, constitutes a benchmark as to a ``reasonable'' level for
attorneys' fees for small businesses.
(4) Within 30 days after receipt by the agency of an application
for costs, the agency may file an answer.
(h) The GSBCA's final decision may be appealed by the agency or by
any interested party, including any intervening interested parties, as
set forth in the Contract Disputes Act of 1978 (41 U.S.C. 601-613).
8. Section 33.201 is amended by adding in alphabetical order
definitions for ``Accrual of a claim'' and ``Alternative dispute
resolution (ADR)'' removing the definition ``Alternative means of
dispute resolution (ADR)''; and in the definition ``Claim'' by removing
the amount ``$50,000'' and inserting ``$100,000'' in its place.
33.201 Definitions.
Accrual of a claim occurs on the date when all events, which fix
the alleged liability of either the Government or the contractor and
permit assertion of the claim, were known or should have been known.
For liability to be fixed, some injury must have occurred. However,
monetary damages need not have been incurred.
Alternative dispute resolution (ADR) means any procedure or
combination of procedures voluntarily used to resolve issues in
controversy without the need to resort to litigation. These procedures
may include, but are not limited to, assisted settlement negotiations,
conciliation, facilitation, mediation, fact-finding, minitrials, and
arbitration.
* * * * *
9. Section 33.206 is revised to read as follows:
33.206 Initiation of a claim.
(a) Contractor claims shall be submitted, in writing, to the
contracting officer for a decision within 6 years after accrual of a
claim, unless the contracting parties agreed to a shorter time period.
This 6-year time period does not apply to contracts awarded prior to
October 1, 1995. The contracting officer shall document the contract
file with evidence of the date of receipt of any submission from the
contractor deemed to be a claim by the contracting officer.
(b) The contracting officer shall issue a written decision on any
Government claim initiated against a contractor within 6 years after
accrual of the claim, unless the contracting parties agreed to a
shorter time period. The 6-year period shall not apply to contracts
awarded prior to October 1, 1995, or to a Government claim based on a
contractor claim involving fraud.
33.207 [Amended]
10. Section 33.207 is amended in paragraph (a)(1) by removing
``$50,000'' and inserting ``$100,000'' in its place.
33.208 [Amended]
11. Section 33.208 is amended in paragraph (c) by removing ``as
defined in 33.201,''.
12. Section 33.211 is amended in paragraph (a)(4)(v) by removing
``$10,000'' and ``$50,000'' and inserting ``$50,000'' and ``$100,000'',
respectively; in (c)(1), (c)(2) and (e) by removing ``$50,000'' and
inserting ``$100,000'' in its place; and by revising paragraph (f) to
read as follows:
33.211 Contracting officer's decision.
* * * * *
(f) In the event of undue delay by the contracting officer in
rendering a decision on a claim, the contractor may request the
tribunal concerned to direct the contracting officer to issue a
decision in a specified time period determined by the tribunal.
* * * * *
13. Section 33.214 is amended by redesignating paragraphs (b)
through (d) as (c) through (e) and adding a new paragraph (b) to read
as follows:
33.214 Alternative dispute resolution (ADR).
* * * * *
(b) If the contracting officer rejects a request for ADR from a
small business contractor, the contracting officer shall provide the
contractor written explanation citing one or more of the conditions in
5 U.S.C. 572(b) or such other specific reasons that ADR procedures are
inappropriate for the resolution of the dispute. In any case where a
contractor rejects a request of an agency for ADR proceedings, the
contractor shall inform the agency in writing of the contractor's
specific reasons for rejecting the request.
* * * * *
14. Subpart 42.16 is added to read as follows:
Subpart 42.16--Small Business Contract Administration
42.1601 General.
The contracting officer shall make every reasonable effort to
respond in writing within 30 days to any written request to the
contracting officer from a small business concern with respect to a
contract administration matter. In the event the contracting officer
cannot respond to the request within the 30-day period, the contracting
officer shall, within the period, transmit to the contractor a written
notification of the specific date the contracting officer expects to
respond. This provision shall not apply to a request for a contracting
officer decision under the Contract Disputes Act of 1978 (41 U.S.C.
601-613).
PART 50--EXTRAORDINARY CONTRACTUAL ACTIONS
15. Section 50.303 is redesignated as 50.303-1 and a new 50.303
heading is added to read as follows:
50.303 Contract adjustment.
* * * * *
16. Section 50.303-2 is added to read as follows:
50.303-2 Contractor certification.
A contractor seeking a contract adjustment that exceeds the
simplified acquisition threshold shall, at the time the request is
submitted, submit a certification by a person authorized to certify the
request on behalf of the contractor that (a) the request is made in
good faith and (b) the supporting data are accurate and complete to the
best of that person's knowledge and belief.
50.304, 50.305 & 50.306 [Amended]
17. Sections 50.304(a) introductory text, 50.305(a) and 50.306
introductory text are amended by removing the reference ``50.303'' and
inserting ``50.303-1'' in its place.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
18. Section 52.233-1 is amended by revising the date of the clause,
the third sentence in paragraph (c), and paragraphs (d)(1) and (g); in
(d)(2)(i)(A) and twice in (e) by removing ``$50,000'' and inserting
``$100,000'' to read as follows:
52.233-1 Disputes.
* * * * *
Disputes (Oct 1995)
* * * * *
(c) * * * However, a written demand or written assertion by the
Contractor seeking the payment of money exceeding $100,000 is not a
claim under the Act until certified as required by subparagraph
(d)(2) of this clause. * * *
(d)(1) A claim by the Contractor shall be made in writing and,
unless otherwise stated in this contract, submitted within 6 years
after accrual of the claim to the Contracting Officer for a written
decision. A claim by the Government against the Contractor shall be
subject to a written decision by the Contracting Officer.
* * * * *
(g) If the claim by the Contractor is submitted to the
Contracting Officer or a claim by the Government is presented to the
Contractor, the parties, by mutual consent, may agree to use ADR. If the Contractor refuses an offer for
alternative disputes resolution, the Contractor shall inform the
Contracting Officer, in writing, of the Contractor's specific
reasons for rejecting the request. When using arbitration conducted
pursuant to 5 U.S.C. 575-580, or when using any other ADR technique
that the agency elects to handle in accordance with the ADRA, any
claim, regardless of amount, shall be accompanied by the
certification described in subparagraph (d)(2)(iii) of this clause,
and executed in accordance with subparagraph (d)(3) of this clause.
* * * * *
19. Section 52.233-2 is amended by revising the date of the clause
and adding paragraph (c) to read as follows:
52.233-2 Service of Protest.
* * * * *
Service of Protest (Oct 1995)
* * * * *
(c) In this procurement, you may not protest to the GSBCA
because of the nature of the supplies or services being procured.
(Contracting Officer shall strike the word ``not'' where the GSBCA
is a correct forum.)
(End of provision)
20. Section 52.233-3 is amended by revising the date of the clause
and the first sentence of (a) to read as follows:
52.233-3 Protest after Award.
* * * * *
Protest After Award (Oct 1995)
* * * * *
(a) Upon receipt of a notice of protest (as defined in FAR
33.101) or a determination that a protest is likely (see FAR
33.102(d)), the Contracting Officer may, by written order to the
Contractor, direct the Contractor to stop performance of the work
called for by this contract. * * *
*****
[Federal Register: September 18, 1995 (Volume 60, Number 180)]
[Rules and Regulations]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
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DEPARTMENT OF DEFENSE
48 CFR Parts 2, 3, 5, 6, 7, 8, 9, 10, 11, 12, 14, 15, 16, 22, 23,
31, 36, 42, 44, 46, 47, 49, 52, and 53
[FAC 90-32; FAR Case 94-790; Item III]
RIN 9000-AG38
Federal Acquisition Regulation; Acquisition of Commercial Items
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule is issued pursuant to the Federal Acquisition
Streamlining Act of 1994 to implement the revised statutory authorities
in Title VIII of the Act for the acquisition of commercial items and
components by Federal Government agencies as well as contractors and
subcontractors at all levels. This regulatory action was subject to
Office of Management and Budget review under Executive Order 12866,
dated September 30, 1993.
EFFECTIVE DATE: October 1, 1995.
Applicability date: For solicitations issued on or after October 1,
1995; use of the new policies, provisions and clauses is optional for
solicitations issued before December 1, 1995, and mandatory for
solicitations issued after December 1, 1995.
FOR FURTHER INFORMATION CONTACT: Colonel Laurence M. Trowel, Commercial
Item Team Leader, at (703) 695-3858 in reference to this FAR case. For
general information, contact the FAR Secretariat, Room 4037, GS
Building, Washington, DC 20405 (202) 501-4755. Please cite FAC 90-32,
FAR case 94-790.
SUPPLEMENTARY INFORMATION:
A. Background
The Federal Acquisition Streamlining Act of 1994, Pub. L. 103-355,
provides authorities that streamline the acquisition process and
minimize burdensome Government-unique requirements. This notice
announces revisions developed under FAR case 94-790, Acquisition of
Commercial Items, which encourage the acquisition of commercial end
items and components by Federal Government agencies as well as
contractors and subcontractors at all levels. The most significant
revisions are in the following FAR parts:
Part 2 has been amended to incorporated the definitions of
``commercial item,'' ``component,'' ``commercial component'' and
``nondevelopmental item'' from the Act with only minor revisions for
clarification. The clause at 52.202-1, Definitions, has been similarly
revised to make the definitions available to prime and subcontractors.
Part 10 has been completely revised to address market research. It
contains some language taken from the current FAR Part 11. This new
part establishes the requirement for market research as the first step
in the acquisition process. Market research is an essential element in
the later steps of describing the agency's need, developing the overall
acquisition strategy and identifying terms and conditions unique to the
item being acquired.
Part 11 has been completely revised to address the process of
describing agency needs. It contains some of the language on
specifications and standards formerly found in FAR Part 10, but takes a
more streamlined approach. In addition, the revised Part 11 establishes
the Government's order of precedence for requirements documents and
addresses the concept of market acceptance contained in the Act. The
revised Part 11 also contains coverage on Delivery or Performance
Schedules, Liquidated Damages, Priorities and Allocations, and
Variations in Quantity taken from the current Part 12 with only minor
editorial revisions. The current Part 12 coverage on Suspension of
Work, Stop Work Orders, and Government Delay of Work has been moved to
Subpart 42.13 with only minor editorial revisions.
Part 12 has been completely revised to address the acquisition of
commercial items. The Team created this entirely new coverage to
address in one FAR part the policies for the acquisition of commercial
items.
--Subpart 12.1 states that the policies in the revised Part 12 are
applicable to all acquisitions of commercial items above the micro-
purchase threshold. The requirements of other parts of the FAR apply to
commercial items to the extent they are not inconsistent with Part 12;
--Subpart 12.2 identifies special requirements for the acquisition of
commercial items. These requirements generally reflect the requirements
of Title VIII.
--Subpart 12.3 establishes standard provisions and clauses for use in
the acquisition of commercial items. This approach is essential to meet
the requirements of the statute and provide contracting officers and
industry with an easy to use, simplified method for acquiring
commercial items. However, it is essential that contracting officers be
allowed to tailor solicitations and contracts to meet the needs of the
particular acquisition and the marketplace for that item. Subpart 12.3
gives contracting officers broad authority to tailor solicitations and
contracts, a practice itself that is consistent with commercial
practices. The Act requires that some limitations be placed on this
authority to tailor, and that has also been accommodated in this
subpart.
--A new form, the Standard Form 1449, Solicitation/Contract/Order for
Commercial Items, was established.
The SF 1449 combines features of the SF 33, Solicitation, Offer and
Award; the SF 1447, Solicitation/Contract; and the DD 1155, Order for
Supplies and Services. The most significant element is the addition of
acceptance blocks at the bottom of the form (patterned after the DD
Form 1155). This will allow suppliers of commercial items to utilize
the SF 1449 to document receipt of the supplies or services by the
government avoiding the need for preparation of separate receipt/
acceptance forms.
--Subpart 12.5 identifies the applicability of certain laws to the
acquisition of commercial items. This subpart is intended to meet the
requirements of Section 8003(a) of the Act which requires that the FAR
contain a list of laws determined to be inapplicable to prime contracts
for commercial items.
--Section 12.503 contains the list of laws determined to be not
applicable to executive agency prime contracts for acquisition of
commercial items. This list has been expanded to also include those
laws that have been revised in some manner to modify their
applicability to commercial items. In each instance, the specific
prescriptive language elsewhere in the FAR has been revised to reflect
this modified applicability. FAR 12.503 only includes those laws that
apply to prime contracts awarded by both DOD and civilian agencies.
Agency unique laws determined to be not applicable to prime contracts
are not addressed in this rule and may be addressed separately by the
respective agencies.
--Section 12.504 contains the list of laws determined to be not
applicable to subcontracts for commercial items. This list has been
expanded to also include those laws that have been revised in some
manner to modify their applicability to subcontracts for commercial
items.
--Subpart 12.6 identifies two streamlined procedures for the evaluation
and solicitation of contracts for commercial items. These procedures
may be used at the discretion of the contracting officer.
Part 52 has been amended to include several new provisions and
clauses to be inserted in all solicitations and contracts for the
acquisition of commercial items:
--Section 52.212-1, Instructions to Offerors--Commercial Items,
contains solicitation instructions unique to Government procurement and
is based upon existing FAR language. The information has been
simplified and tailored to meet the requirements of commercial items.
For the most part, the simplified paragraphs in the new provision do
not contain new concepts.
--Section 52.212-2, Evaluation--Commercial Items, contains evaluation
information that has been simplified and tailored to meet the
requirements of commercial items. Again, this provision does not
contain new concepts and is generally based upon provisions prescribed
in Parts 14 and 15. This provision may be used at the discretion of the
contracting officer. It requires the contracting officer to establish
specific evaluation factors and the relative order of importance for
each acquisition.
--Section 52.212-3, Offeror Representations and Certifications--
Commercial Items, includes the certifications and representations
required to comply with laws or Executive orders. Instead of using the
numerous certifications contained in the FAR, the Team drafted a single
provision containing all the requirements that may apply to the
acquisition of commercial items.
--Section 52.212-4, Contract Terms and Conditions--Commercial Items,
contains the terms and conditions the Team believes are consistent with
customary commercial practice by addressing general areas that previous
studies have identified as the ``core'' areas covered by commercial
contracts. Several concepts included in the clause at 52.212-4
represent significant changes from standard Government practices to
commercial-like practices.
--Section 52.212-5, Contract Terms and Conditions Required to Implement
Statutes or Executive orders--Commercial Items, implements provisions
of law or executive orders applicable to Government acquisitions of
commercial items or commercial components. The Team believes the clause at 52.212-5 represents the minimum number of clauses required to
implement statutes and Executive orders. Certain clauses may apply
depending upon the circumstances; the contracting officer will indicate
which of these clauses apply for the specific acquisition. In addition,
this clause provides that the contractor is not required to include any
FAR provision or clause in its subcontracts other than those listed in
the clause as applying to subcontracts for commercial items.
--Section 52.244-6, Subcontracts for Commercial Items and Commercial
Components, implements the preference for the acquisition of commercial
items or nondevelopmental items as components of items to be supplied
under Federal contracts. This clause will be inserted in all
solicitations and contracts for supplies and services other than
commercial items. It provides that the contractor is not required to
include in its subcontracts for commercial items any FAR provision or
clause, other than those listed in the clause.
B. Regulatory Flexibility Act
This final rule will 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 will have
this impact as a result of the following:
(1) It establishes a much broader definition of ``commercial
items'' compared to the language of Part 11, it includes certain
modifications to existing items, and includes certain commercial
services. In all these cases, small business is very likely to benefit
from this expanded definition;
(2) It establishes a requirement for conducting market research in
certain circumstances before issuing solicitations which should benefit
small business by ensuring the contracting activity has conducted
sufficient research to be aware of the availability of commercial items
and the practices used in the commercial marketplace to acquire them.
The rule also cautions contracting officers not to request potential
sources to submit more than the minimum information necessary as a part of market research.
(3) It establishes a preference for the acquisition of commercial
items thereby enabling more small businesses that offer commercial
items to participate in Government acquisition;
(4) It establishes a preference for stating Government requirements
in terms of functions to be performed, performance required, or
essential physical characteristics rather than detailed, Government-
unique design specifications thereby allowing a broader range of
products of small businesses to satisfy the Government need;
(5) It establishes the Government order of precedence for
requirements documents emphasizing performance-oriented documents and
nongovernment standards rather than Federal/Military-unique standards
thereby allowing a broader range of small businesses to participate in
Government acquisitions;
(6) It allows contracting officers the flexibility to use either
the streamlined solicitation procedure in the revised Subpart 12.6 for
acquiring commercial items, or the existing procedures in Parts 13, 14
or 15, as applicable, if they are more streamlined and beneficial,
thereby allowing maximum flexibility for contracting with small
businesses;
(7) It allows the use of the streamlined terms and conditions for
acquiring commercial items for every acquisition above the
micropurchase threshold thereby allowing the maximum number of small
businesses to benefit from these procedures;
(8) It requires, except in unique circumstances, that the
Government rely on the contractor's quality assurance system thereby
allowing small businesses to utilize their own quality system when
selling commercial items rather than a Government-specified system;
(9) It requires that, when acquiring commercial items, the
contracting officer use the solicitation provisions and contract
clauses specifically established for acquiring commercial items. The
contracting officer may tailor those provisions and clauses when the
customary practices in the market dictate the use of other terms and
conditions or when a waiver is approved; and
(10) By significantly limiting the flow down of Government-unique
terms and conditions to subcontractors at all levels thereby minimizing
the burden on a significant number of small businesses.
A Final Regulatory Flexibility Analysis (FRFA) has been prepared
and will be provided to the Chief Counsel for Advocacy for the Small
Business Administration. A copy of the FRFA may be obtained from the
FAR Secretariat.
C. Paperwork Reduction Act
The Paperwork Reduction Act (Pub. L. 96-511) is deemed to apply
because the final rule contains information collection requirements.
Accordingly, a request for approval of a new information collection
requirement concerning Acquisition of Commercial Items was submitted to
the Office of Management and Budget and approved through OMB Control No. 9000-0136. Public comments concerning this request were invited in a Federal Register notice at 60 FR 11219, March 1, 1995.
D. Public Comments
Title VIII of the Act makes significant statutory revisions to
facilitate the acquisition of commercial items and components by
Federal Government agencies, as well as contractors and subcontractors
at all levels. This final rule incorporates revisions to two proposed
rules resulting from a public meeting held on April 3, 1995, and
written comments received in response to publication of the two
proposed rules in the Federal Register. The first proposed rule was
published in the Federal Register on March 1, 1995 (60 FR 11198), under
FAR case 94-790. That proposed rule made changes throughout the FAR to incorporate provisions of Title VIII. The second proposed rule was
published in the Federal Register on March 22, 1995 (60 FR 15220),
under FAR case 94-791. That case contained the list of laws required by
Section 8003(a) of the Act that were determined to be inapplicable to
Executive agency contracts and subcontracts for commercial items. FAR
case 94-791 also contained the list of contract clauses determined to
be applicable to subcontracts for the acquisition of commercial items.
On April 4, 1995, a correction to the proposed rule under FAR case 94-
791 was published in the Federal Register (60 FR 17184), to correct
section 52.212-5 to include access to contractor records by the
Comptroller General of the United States for contracts awarded using
other than sealed bidding in excess of the simplified acquisition
threshold.
A total of 559 written comments were received on the proposed rule
from 60 commentors. Each comment was analyzed
by the Commercial Items Drafting Team and, where appropriate,
changes were made in the proposed FAR language as reflected in
this final rule. The comments largely fell in the following general
areas:
1. Definitions of Commercial Items and Nondevelopmental Item
The language describing a ``minor'' modification was revised to
clarify the intent. The revised language was drawn from a related
Congressional report. The definition of nondevelopmental items was also
clarified to alleviate confusion regarding what commentors identified
as the ``circular logic'' of commercial items being a subset of
nondevelopmental items, and certain nondevelopmental items being a
subset of commercial items. The revision clarifies the distinction
between commercial items and nondevelopmental items. Several commentors asked that specific examples of items that would be considered ``commercial'' be included in the definition. The Team rejected this suggestion citing the impossibility of developing examples that would adequately describe the range of commercial items the government might buy while not unnecessarily limiting the breadth of the definition.
2. Decision to Utilize Commercial Items Authority
Several commentors expressed confusion over how the Government
would decide when the commercial items authorities in Part 12 could be
used. FAR 10.002 was revised to include language explaining the
decision process that would follow the completion of market research.
3. Market Acceptance
Several commentors were concerned with the lack of sufficient
guidance on market acceptance. Several changes were made in an effort
to balance the concerns expressed by the public and those expressed by
Government agencies. The final rule clarifies the circumstances where
market acceptance may be appropriate, cautions that it is not
appropriate when new or evolving commercial items may meet the agency's needs, and contains guidance on developing criteria for demonstrating market acceptance.
4. Relationship of Part 12 to Other FAR Parts
Several commentors expressed confusion over the relationship of
Part 12 to other Parts, especially Part 13, Simplified Acquisition
Procedures; Part 14, Sealed Bidding; and Part 15, Contracting By
Negotiation. FAR 12.203 was revised to clarify that Part 12 contains
unique policies for the acquisition of commercial items. These unique
policies are intended to be used in conjunction with the existing
procedures contained in Parts 13, 14, and 15 for the solicitation,
evaluation, and award of contracts, purchase orders and other
instruments. Part 12 will take precedence over other FAR parts only
where the policies in those parts are inconsistent.
5. Use of the Standard Form (SF) 1449
Several commentors questioned the rationale for requiring the use
of the new SF 1449 for all acquisitions of commercial items. The SF
1449 was specifically developed in conjunction with the provisions and
clauses developed for the acquisition of commercial items. The SF 1449
and the prescribed provisions and clauses are designed to complement
each other in several respects. Forms currently prescribed in the FAR
contain references to FAR provisions and clauses that are not used for
commercial items, and references to the Uniform
Contract Format, also not used for acquiring commercial items. Finally,
the use of a single form throughout the Federal Government for all
acquisitions of commercial items will aid those offerors that will, as
a result of the publication of this rule, seek to do business with the
Federal Government.
6. Quality Assurance
Several commentors questioned the intent of the language regarding
the reliance on contractors' existing quality assurance systems. The
rule has been revised to clarify that where buyer in-process inspection
is a customary practice, any Government inprocess inspection shall be
conducted in a manner consistent with commercial practice.
7. Commercial Item Pricing
Commentors suggested that Part 12 should discuss the techniques for
pricing commercial items. The policies and procedures for determining
the price reasonableness of commercial items are contained in Subpart
15.8 and the Team did not want to conflict with those policies.
However, a brief summary of pricing considerations used when
contracting by negotiation under Part 15 has been included in Part 12.
8. Technical Data and Computer Software
In response to numerous comments on technical data and computer
software, the final rule has been revised. The subpart on technical
data has been revised to cover the general principle that the
Government will acquire only technical data customarily provided to the
public, except as provided by agency-specific statutes. The technical
data subpart references FAR Part 27 and agency supplements, where
detailed rules implementing the technical data statutes can be found. A
new section on computer software was added to require that commercial
computer software be acquired under licenses customarily provided to
the public to the extent those licenses are consistent with Federal
procurement law.
9. Discretionary Use of FAR Provisions and Clauses
Several commentors asked if existing FAR provisions and clauses
could be used if needed. Guidance concerning the discretionary use of
other FAR clauses, consistent with market research and customary
commercial practice, has been provided in the final rule. Specific
examples of FAR clauses that may be appropriate for use include clauses
for ordering procedures for indefinite delivery contracts and option
exercise.
10. Tailoring of Provisions and Clauses
Additional guidance concerning contracting officer authority to
tailor Part 12 clauses, consistent with customary commercial market
practices, has also been provided. Specific paragraphs of the clause at
52.212-4, Contract Terms and Conditions--Commercial Items, that are
based in statute and may not be tailored, have been identified.
11. Unique Requirements Regarding Terms and Conditions for Commercial
Items.
Many commentors from both industry and Government noted that the
new terms and conditions prescribed for commercial items are
significantly different than the existing FAR provisions and clauses.
In response to the numerous questions and concerns, the Team expanded
the discussion in the proposed rule describing the key features of
these unique provisions and clauses.
12. Laws Inapplicable to Contractors and Subcontractors
The language describing the laws determined inapplicable to prime
and subcontractors has been revised to clarify several areas of
confusion. In addition, the Service Contract Act (SCA) was added to the
list of laws inapplicable to subcontractors. The proposed rule clearly
did not call out the SCA for flow down to subcontractors in paragraph
(e) of the clause at 52.212-5, but inadvertently omitted the law from
the list of laws inapplicable to subcontractors. Finally, as indicated
in the March 22, 1995, Federal Register notice, the DOD-unique laws
identified in the proposed rule have been removed from the FAR rule and
will appear in the DOD FAR Supplement (DFARS) coverage.
13. Certification Regarding Debarment and Suspension
A certification regarding an offeror's debarment, suspension or
ineligibility for award was added to the provision at 52.212-3 to
implement the requirements of Executive Order 12549.
14. Acceptance and Warranties
The language concerning acceptance and warranties in the clause at
52.212-4 was revised to incorporate the acceptance principles found in
the Uniform Commercial Code. It was also revised to establish the
implied warranties of merchantability and fitness for a particular
purpose as the Government's minimum warranties. Corresponding guidance
is provided in Part 12 on evaluating and incorporating express
warranties, which may overcome the implied warranties, and ensuring any
express warranty and the acceptance terms of the contract are
consistent with the concepts contained in the rule.
15. Terminations
Guidance on procedures for contract terminations, reflecting the
language in the clause at 52.212-4, has been provided in FAR Part 12.
In addition, language has been included to clarify that negotiation of
termination charges in terminations for the Government's convenience
does not require government unique record keeping, compliance with the
cost accounting standards or the contract cost principles.
16. Limitation of Liability
The limitation of contractor liability language, which appeared in
the proposed rule in the ``Warranty'' paragraph of the clause at
52.212-4, has been moved to a separate paragraph to clarify that the
limitation does not apply solely to liability relating to any warranty.
17. Subcontracting Plans
The requirement for Small, Small Disadvantaged and Women Owned
Small Business Subcontracting Plans was included in the clause at
52.212-5 after it was determined that there was no exemption from this
requirement for commercial items. However, in this regard, the Office
of Procurement Policy (OFPP) is preparing to issue Policy Letter 95-1,
Subcontracting Plans for Companies Supplying Commercial Items. This
Policy Letter states that when a subcontracting plan is required,
annual commercial subcontracting plans that relate to the company's
commercial and noncommercial production are authorized and preferred
for (1) prime contracts for commercial items; or (2) subcontractors
that provide commercial items under a prime contract, whether or not
the prime contractor is supplying a commercial item. The policy
revisions contained in Policy Letter 95-1 will be incorporated into the
FAR by a separate FAR case.
18. Other Revisions to the Proposed Rule
Numerous other revisions were made to the proposed rule to correct
inconsistencies, clarify intent, improve editorial clarity and to bring
the language of the case up to the latest FAR baseline through FAC 90-
31.
List of Subjects in 48 CFR Parts 2, 3, 5, 6, 7, 8, 9, 10, 11, 12, 14,
15, 16, 22, 23, 31, 36, 42, 44, 46, 47, 49, 52 and 53
Government procurement.
Dated: September 7, 1995.
Edward C. Loeb,
Deputy Project Manager for the Implementation of the Federal
Acquisition Streamlining Act of 1994.
Therefore, 48 CFR Parts 2, 3, 5, 6, 7, 8, 9, 10, 11, 12, 14, 15,
16, 22, 23, 31, 36, 42, 44, 46, 47, 49, 52, and 53 are amended as set
forth below:
1. The authority citation for 48 CFR Parts 2, 3, 5, 6, 7, 8, 9, 10,
11, 12, 14, 15, 16, 22, 23, 31, 36, 42, 44, 46, 47, 49, 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 2--DEFINITIONS OF WORDS AND TERMS
2. Section 2.101 is amended by adding in alphabetical order the
definitions ``Commercial component'', ``Commercial item'',
``Component'', ``Market research'', and ``Nondevelopmental item'' to
read as follows:
2.101 Definitions.
* * * * *
Commercial component means any component that is a commercial item.
Commercial item means--
(a) Any item, other than real property, that is of a type
customarily used for nongovernmental purposes and that--
(1) Has been sold, leased, or licensed to the general public; or,
(2) Has been offered for sale, lease, or license to the general
public;
(b) Any item that evolved from an item described in paragraph (a)
of this definition through advances in technology or performance and
that is not yet available in the commercial marketplace, but will be
available in the commercial marketplace in time to satisfy the delivery
requirements under a Government solicitation;
(c) Any item that would satisfy a criterion expressed in paragraphs
(a) or (b) of this definition, but for--
(1) Modifications of a type customarily available in the commercial
marketplace; or
(2) Minor modifications of a type not customarily available in the commercial marketplace made to meet Federal Government requirements.
``Minor'' modifications means modifications that do not significantly
alter the nongovernmental function or essential physical
characteristics of an item or component, or change the purpose of a
process. Factors to be considered in determining whether a modification
is minor include the value and size of the modification and the
comparative value and size of the final product. Dollar values and
percentages may be used as guideposts, but are not conclusive evidence
that a modification is minor;
(d) Any combination of items meeting the requirements of paragraphs
(a), (b), (c), or (e) of this definition that are of a type customarily
combined and sold in combination to the general public;
(e) Installation services, maintenance services, repair services,
training services, and other services if such services are procured for
support of an item referred to in paragraphs (a), (b), (c), or (d) of
this definition, and if the source of such services--
(1) Offers such services to the general public and the Federal
Government contemporaneously and under similar terms and conditions;
and
(2) Offers to use the same work force for providing the Federal Government with such services as the source uses for providing such services to the general public;
(f) Services of a type offered and sold competitively in
substantial quantities in the commercial marketplace based on
established catalog or market prices for specific tasks performed under
standard commercial terms and conditions. This does not include
services that are sold based on hourly rates without an established
catalog or market price for a specific service performed;
(g) Any item, combination of items, or service referred to in
paragraphs (a) through (f), notwithstanding the fact that the item,
combination of items, or service is transferred between or among
separate divisions, subsidiaries, or affiliates of a contractor; or
(h) A nondevelopmental item, if the procuring agency determines the
item was developed exclusively at private expense and sold in
substantial quantities, on a competitive basis, to multiple State and
local governments.
Component means any item supplied to the Federal Government as part of an end item or of another component.
* * * * *
Market research means collecting and analyzing information about
capabilities within the market to satisfy agency needs.
* * * * *
Nondevelopmental item means--
(a) Any previously developed item of supply used exclusively for
governmental purposes by a Federal agency, a State or local government,
or a foreign government with which the United States has a mutual
defense cooperation agreement;
(b) Any item described in paragraph (a) of this definition that
requires only minor modification or modifications of a type customarily
available in the commercial marketplace in order to meet the
requirements of the procuring department or agency; or
(c) Any item of supply being produced that does not meet the
requirements of paragraph (a) or (b) solely because the item is not yet
in use.
* * * * *
PART 3--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST
3. Section 3.404 is amended by removing ``or'' from the end of
paragraph (b)(4); by redesignating paragraph (b)(5) as (b)(6) and
adding a new paragraph (b)(5); and by revising paragraph (c) to read as
follows:
3.404 Solicitation provision and contract clause.
* * * * *
(b) * * *
(5) The solicitation is for a commercial item (see parts 2 and 12);
or
* * * * *
(c) The contracting officer shall insert the clause at 52.203-5,
Covenant Against Contingent Fees, in solicitations and contracts
exceeding the simplified acquisition threshold in part 13 other than
those for commercial items (see Parts 2 and 12).
4. Section 3.502-2 is amended by revising the introductory text of
paragraph (i) to read as follows:
3.502-2 General.
* * * * *
(i) Requires each contracting agency to include in each prime
contract, except contracts for commercial items (see part 12), a
requirement that the prime contractor shall--
* * * * *
5. Section 3.502-3 is revised to read as follows:
3.502-3 Contract clause.
The contracting officer shall insert the clause at 52.203-7, Anti-
Kickback Procedures, in solicitations and contracts exceeding the
simplified acquisition threshold in part 13, other than those for
commercial items (see part 12).
6. Section 3.503-2 is revised to read as follows:
3.503-2 Contract clause.
The contracting officer shall insert the clause at 52.203-6,
Restrictions on Subcontractor Sales to the Government, in solicitations
and contracts exceeding the simplified acquisition threshold in
part 13. For the acquisition of commercial items, the contracting
officer shall use the clause with its Alternate
I.
PART 5--PUBLICIZING CONTRACT ACTIONS
7. Section 5.203 is amended by revising paragraphs (a), (b), and
(c) to read as follows:
5.203 Publicizing and response time.
* * * * *
(a) A notice of contract action shall be published in the CBD at
least 15 days before issuance of a solicitation except when the
combined CBD synopsis/solicitation procedure for acquisition of
commercial items is used (see 12.603).
(b) The contracting officer shall establish a solicitation response
time which will afford potential offerors a reasonable opportunity to
respond for (1) each contract action, including actions via FACNET, in
an amount estimated to be greater than $25,000, but not greater than
the simplified acquisition threshold; or (2) each contract action for
the acquisition of commercial items in an amount estimated to be
greater than $25,000 (see part 12). The contracting officer should
consider the circumstances of the individual acquisition, such as the
complexity, commerciality, availability, and urgency, when establishing
the solicitation response time.
(c) Except for the acquisition of commercial items (see 5.203(b)),
agencies shall allow at least a 30-day response time for receipt of
bids or proposals from the date of issuance of a solicitation, if the
contract action is expected to exceed the simplified acquisition
threshold.
* * * * *
8. Section 5.207 is amended by adding paragraph (e)(4) to read as
follows:
5.207 Preparation and transmittal of synopses.
* * * * *
(e) * * *
(4) If, under the proposed acquisition, the Government does not
intend to acquire a commercial item using part 12, the synopsis shall
refer to Numbered Note 26.
* * * * *
PART 6--COMPETITION REQUIREMENTS
9. Section 6.303-2 is amended by revising paragraph (a)(8) to read
as follows:
6.303-2 Content.
(a) * * *
(8) A description of the market research conducted (see part 10) and the results or a statement of the reason market research was not conducted.
* * * * *
10. Section 6.502 is revised to read as follows:
6.502 Duties and responsibilities.
(a) Agency and procuring activity competition advocates are
responsible for promoting the acquisition of commercial items,
promoting full and open competition, challenging requirements that are
not stated in terms of functions to be performed, performance required
or essential physical characteristics, and challenging barriers to the
acquisition of commercial items and full and open competition such as
unnecessarily restrictive statements of work, unnecessarily detailed
specifications, and unnecessarily burdensome contract clauses.
(b) Agency competition advocates shall--
(1) Review the contracting operations of the agency and identify and report to the agency senior procurement executive--
(i) Opportunities and actions taken to acquire commercial items to meet the needs of the agency;
(ii) Opportunities and actions taken to achieve full and open
competition in the contracting operations of the agency;
(iii) Actions taken to challenge requirements that are not stated in terms of functions to be performed, performance required or
essential physical characteristics;
(iv) Any condition or action that has the effect of unnecessarily restricting the acquisition of commercial items or competition in the contracting actions of the agency;
(2) Prepare and submit an annual report to the agency senior
procurement executive, in accordance with agency procedures,
describing--
(i) Such advocate's activities under this subpart;
(ii) New initiatives required to increase the acquisition of
commercial items;
(iii) New initiatives required to increase competition;
(iv) New initiatives to ensure requirements are stated in terms of
functions to be performed, performance required or essential physical
characteristics;
(v) Any barriers to the acquisition of commercial items or
competition that remain; and
(vi) Other ways in which the agency has emphasized the acquisition of commercial items and competition in areas such as acquisition training and research;
(3) Recommend to the senior procurement executive of the agency goals and plans for increasing competition on a fiscal year basis; and
(4) Recommend to the senior procurement executive of the agency a system of personal and organizational accountability for competition, which may include the use of recognition and awards to motivate program managers, contracting officers, and others in authority to promote competition in acquisition.
PART 7--ACQUISITION PLANNING
7.101 [Amended]
11. Section 7.101 is amended by removing the definition ``Market
survey''.
12. Section 7.102 is revised to read as follows:
7.102 Policy.
(a) Agencies shall perform acquisition planning and conduct market
research (see part 10) for all acquisitions in order to promote and
provide for--
(1) Acquisition of commercial items or, to the extent that
commercial items suitable to meet the agency's needs are not available,
nondevelopmental items, to the maximum extent practicable (10 U.S.C.
2377 and 41 U.S.C. 251, et seq.); and
(2) Full and open competition (see part 6) or, when full and open
competition is not required in accordance with part 6, to obtain
competition to the maximum extent practicable, with due regard to the
nature of the supplies or services to be acquired (10 U.S.C. 2301(a)(5)
and 41 U.S.C. 253a(a)(1)).
(b) This planning shall integrate the efforts of all personnel
responsible for significant aspects of the acquisition. The purpose of
this planning is to ensure that the Government meets its needs in the
most effective, economical, and timely manner. Agencies that have a
detailed acquisition planning system in place that generally meets the
requirements of 7.104 and 7.105 need not revise their system to
specifically meet all of these requirements.
13. Section 7.103 is amended by revising paragraph (b); and in
paragraph (m) by removing ``10.002(c)'' and inserting ``11.001(b)'' to
read as follows:
7.103 Agency-head responsibilities.
* * * * *
(b) Encouraging offerors to supply commercial items, or to the
extent that commercial items suitable to meet the agency needs are not
available, nondevelopmental items in response to agency solicitations (10 U.S.C.
2377 and 41 U.S.C. 251, et seq.); and
* * * * *
14. Section 7.105 is amended in paragraph (a)(5) by removing
``subpart 12.1'' and inserting ``subpart 11.4'' in its place; in
paragraph (a)(8)(iii) by removing the parenthetical ``(see
10.002(c))''; by revising paragraph (b)(1); in paragraph (b)(6) by
removing ``part 10'' and inserting ``part 11'' in its place; in
paragraph (b)(7) by removing ``subpart 12.3'' and inserting ``subpart
11.6'' in its place; and by revising paragraph (b)(12)(i) to read as
follows:
7.105 Contents of written acquisition plans.
* * * * *
(b) Plan of action--(1) Sources. Indicate the prospective sources
of supplies and/or services that can meet the need. Consider required
sources of supplies or services (see part 8). Include consideration of
small business, small disadvantaged business, and women-owned small
business concerns (see part 19). Address the extent and results of the
market research and indicate their impact on the various elements of
the plan (see part 10).
* * * * *
(12) * * *
(i) The assumptions determining contractor or agency support, both
initially and over the life of the acquisition, including consideration
of contractor or agency maintenance and servicing (see subpart 7.3) and
distribution of commercial items;
* * * * *
PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES
8.1104 [Amended]
15. Section 8.1104 is amended in paragraph (e)(1) by removing
``52.212-9'' and inserting ``52.211-16'' in its place.
PART 9--CONTRACTOR QUALIFICATIONS
16. Section 9.106-1 is amended by revising paragraph (a) to read as
follows:
9.106-1 Conditions for preaward surveys.
(a) A preaward survey is normally required when the information on
hand or readily available to the contracting officer is not sufficient
to make a determination regarding responsibility. However, if the
contemplated contract will have a fixed price at or below the
simplified acquisition threshold or will involve the acquisition of
commercial items (see part 12), the contracting officer should not
request a preaward survey unless circumstances justify its cost.
* * * * *
17. Section 9.306 is amended in the introductory text of paragraph
(f) by revising the parenthetical to read ``(see 11.404)''.
18. Section 9.405-2 is amended by revising the second sentence of
paragraph (b) introductory text to read as follows:
9.405-2 Restrictions on subcontracting.
* * * * *
(b) * * * By operation of the clause at 52.209-6, Protecting the
Government's Interests When Subcontracting with Contractors Debarred,
Suspended or Proposed for Debarment, contractors shall not enter into
any subcontract in excess of $25,000 with a contractor that has been
debarred, suspended, or proposed for debarment unless there is a
compelling reason to do so. * * *
* * * * *
19. Part 10 is revised to read as follows:
PART 10--MARKET RESEARCH
Sec.
10.000 Scope of part.
10.001 Policy.
10.002 Procedures.
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
10.000 Scope of part.
This part prescribes policies and procedures for conducting market
research to arrive at the most suitable approach to acquiring,
distributing, and supporting supplies and services. This part
implements requirements of 41 U.S.C. 253a(a)(1), 41 U.S.C 264b, and 10
U.S.C. 2377.
10.001 Policy.
(a) Agencies shall--
(1) Ensure that legitimate needs are identified and trade-offs
evaluated to acquire items which meet those needs;
(2) Conduct market research appropriate to the circumstances--
(i) Before developing new requirements documents for an acquisition by that agency;
(ii) Before soliciting offers for acquisitions with an estimated value in excess of the simplified acquisition threshold; and
(iii) Before soliciting offers for acquisitions with an estimated value less than the simplified acquisition threshold when adequate information is not available and the circumstances justify its cost; and
(3) Use the results of market research to--
(i) Determine if sources capable of satisfying the agency's
requirements exist;
(ii) Determine if commercial items or, to the extent commercial items suitable to meet the agency's needs are not available,
nondevelopmental items are available that--
(A) Meet the agency's requirements;
(B) Could be modified to meet the agency's requirements; or
(C) Could meet the agency's requirements if those requirements were modified to a reasonable extent;
(iii) Determine the extent to which commercial items or
nondevelopmental items could be incorporated at the component level;
(iv) Determine the practices of firms engaged in producing, distributing, and supporting commercial items, such as terms for warranties, buyer financing, maintenance and packaging, and marking;
and
(v) Ensure maximum practicable use of recovered materials (see subpart 23.4) and promote energy conservation and efficiency.
(b) When conducting market research, agencies should not request
potential sources to submit more than the minimum information
necessary.
10.002 Procedures.
(a) Acquisitions begin with a description of the Government's needs
stated in terms sufficient to allow conduct of market research.
(b) Market research is then conducted to determine if commercial
items or nondevelopmental items are available to meet the Government's
needs or could be modified to meet the Government's needs.
(1) The extent of market research will vary, depending on such
factors as urgency, estimated dollar value, complexity, and past
experience. Market research involves obtaining information specific to
the item being acquired and should include--
(i) Whether the Government's needs can be met by--
(A) Items of a type customarily available in the commercial marketplace;
(B) Items of a type customarily available in the commercial marketplace with modifications; or
(C) Items used exclusively for governmental purposes;
(ii) Customary practices regarding customizing, modifying or tailoring of items to meet customer needs and associated costs;
(iii) Customary practices, including warranty, buyer financing, discounts, etc., under which commercial sales of the products are made;
(iv) The requirements of any laws and regulations unique to the item being acquired;
(v) The availability of items that contain recovered materials and items that are energy efficient;
(vi) The distribution and support capabilities of potential
suppliers, including alternative arrangements and cost estimates; and
(vii) Size and status of potential sources (see part 19).
(2) Techniques for conducting market research may include any or all of the following:
(i) Contacting knowledgeable individuals in Government and industry regarding market capabilities to meet requirements.
(ii) Reviewing the results of recent market research undertaken to meet similar or identical requirements.
(iii) Publishing formal requests for information in appropriate technical or scientific journals or business publications.
(iv) Querying Government data bases that provide information relevant to agency acquisitions.
(v) Participating in interactive, on-line communication among industry, acquisition personnel, and customers.
(vi) Obtaining source lists of similar items from other contracting activities or agencies, trade associations or other sources.
(vii) Reviewing catalogs and other generally available product literature published by manufacturers, distributors, and dealers or available on-line.
(viii) Conducting interchange meetings or holding presolicitation conferences to involve potential offerors early in the acquisition process.
(c) If market research indicates commercial or nondevelopmental
items might not be available to satisfy agency needs, agencies shall
reevaluate the need in accordance with 10.001(a)(3)(ii) and determine
whether the need can be restated to permit commercial or
nondevelopmental items to satisfy the agency's needs.
(d)(1) If market research establishes that the Government's need
may be met by a type of item or service customarily available in the
commercial marketplace that would meet the definition of a commercial
item at subpart 2.1, the contracting officer shall solicit and award
any resultant contract using the policies and procedures in part 12.
(2) If market research establishes that the Government's need
cannot be met by a type of item or service customarily available in the
marketplace, part 12 shall not be used. When publication of the notice
at 5.201 is required, the contracting officer shall include a notice to
prospective offerors that the Government does not intend to use part 12
for the acquisition (see 5.207(e)(4)).
(e) Agencies should document the results of market research in a
manner appropriate to the size and complexity of the acquisition.
20. Part 11 is revised to read as follows:
PART 11--DESCRIBING AGENCY NEEDS
Sec.
11.000 Scope of part.
11.001 Definitions.
11.002 Policy.
Subpart 11.1--Selecting and Developing Requirements Documents
11.101 Order of precedence for requirements documents.
11.102 Standardization program.
11.103 Market acceptance.
11.104 Items peculiar to one manufacturer.
Subpart 11.2--Using and Maintaining Requirements Documents
11.201 Identification and availability of specifications.
11.202 Maintenance of standardization documents.
11.203 Customer satisfaction.
11.204 Solicitation provisions and contract clauses.
Subpart 11.3--Acquiring Other Than New Material, Former Government
Surplus Property and Residual Inventory
11.301 Policy.
11.302 Solicitation provisions and contract clauses.
Subpart 11.4--Delivery or Performance Schedules
11.401 General.
11.402 Factors to consider in establishing schedules.
11.403 Supplies or services.
11.404 Contract clauses.
Subpart 11.5--Liquidated Damages
11.501 General.
11.502 Policy.
11.503 Procedures.
11.504 Contract clauses.
Subpart 11.6--Priorities and Allocations
11.600 Scope of part.
11.601 Definitions.
11.602 General.
11.603 Procedures.
11.604 Solicitation provisions and contract clauses.
Subpart 11.7--Variation in Quantity
11.701 Supply contracts.
11.702 Construction contracts.
11.703 Contract clauses.
11.000 Scope of part.
This part prescribes policies and procedures for describing agency
needs.
11.001 Definitions.
Material, as used in this part, includes, but is not limited to,
raw material, parts, items, components, and end products.
New, as used in this part, means previously unused or composed of
previously unused materials and may include unused residual inventory
or unused former Government surplus property.
Other than new, as used in this part, includes, but is not limited
to, recycled, recovered, remanufactured, used, and reconditioned.
Reconditioned, as used in this part, means restored to an earlier
normal operating condition by readjustments and replacement of parts.
Remanufactured, as used in this part, means factory rebuilt to new
equipment performance specification and unused subsequent to
rebuilding.
11.002 Policy.
(a) In fulfilling requirements of 10 U.S.C. 2305(a)(1), 10 U.S.C.
2377, 41 U.S.C. 253a(a), and 41 U.S.C. 264b, agencies shall--
(1) Specify needs using market research in a manner designed to--
(i) Promote full and open competition (see part 6), with due regard to the nature of the supplies or services to be acquired; and
(ii) Only include restrictive provisions or conditions to the
extent necessary to satisfy the minimum needs of the agency or as
authorized by law.
(2) To the maximum extent practicable, ensure that acquisition
officials--
(i) State requirements with respect to an acquisition of supplies or services in terms of--
(A) Functions to be performed;
(B) Performance required; or
(C) Essential physical characteristics;
(ii) Define requirements in terms that enable and encourage
offerors to supply commercial items, or, to the extent that commercial
items suitable to meet the agency's needs are not available,
nondevelopmental items, in response to the agency solicitations;
(iii) Provide offerors of commercial items and nondevelopmental
items an opportunity to compete in any acquisition to fill such
requirements;
(iv) Require prime contractors and subcontractors at all tiers
under the agency contracts to incorporate commercial items or
nondevelopmental items as components of items supplied to the agency;
and
(v) Modify requirements in appropriate cases to ensure that the requirements can be met by commercial items or, to the extent that commercial items suitable to meet the agency's needs are not available, nondevelopmental items.
(b) The Metric Conversion Act of 1975, as amended by the Omnibus
Trade and Competitiveness Act of 1988 (15 U.S.C. 205a, et seq.),
designates the metric system of measurement as the preferred system of
weights and measures for United States trade and commerce, and it
requires that each agency use the metric system of measurement in its
acquisitions, except to the extent that such use is impracticable or is
likely to cause significant inefficiencies or loss of markets to United
States firms. Requiring activities are responsible for establishing
guidance implementing this policy in formulating their requirements for
acquisitions.
(c) To the extent practicable and consistent with subpart 9.5,
potential offerors should be given an opportunity to comment on agency
requirements or to recommend application and tailoring of requirements
documents and alternative approaches. Requiring agencies should apply
specifications, standards, and related documents initially for guidance
only, making final decisions on the application and tailoring of these
documents as a product of the design and development process. Requiring
agencies should not dictate detailed design solutions prematurely (see
7.101 and 7.105(a)(8)).
(d) The Resource Conservation and Recovery Act of 1976 (42 U.S.C.
6901, et seq.), as amended, and Executive Order 12873, dated October
20, 1993, establish requirements for the procurement of products
containing recovered materials, and environmentally preferable and
energy-efficient products and services. Requiring activities shall
prepare plans, drawings, specifications, standards (including voluntary
standards), and purchase descriptions that consider the requirements
set forth in part 23.
Subpart 11.1--Selecting and Developing Requirements Documents
11.101 Order of precedence for requirements documents.
(a) Agencies may select from existing requirements documents,
modify or combine existing requirements documents, or create new
requirements documents to meet agency needs, consistent with the
following order of precedence:
(1) Documents mandated for use by law.
(2) Performance-oriented documents.
(3) Detailed design-oriented documents.
(4) Standards, specifications and related publications issued by
the Government outside the Defense or Federal series for the non-
repetitive acquisition of items.
(b) Agencies should prepare product descriptions to achieve maximum
practicable use of recovered material and other materials that are
environmentally preferable (see subparts 23.4 and 23.7).
11.102 Standardization program.
Agencies shall select existing requirements documents or develop
new requirements documents that meet the needs of the agency in
accordance with the guidance contained in the Federal Standardization
Manual and, for DOD components, DOD 4120.3-M, Defense Standardization Program Policies and Procedures. The Federal Standardization Manual may be obtained from General Services Administration, Federal Supply Service Bureau, Specifications Section, Suite 8100, 470 L'Enfant Plaza, SW, Washington, DC 20407. DOD 4120.3-M may be obtained from DOD Single Stock Point, Standardization Document Order Desk, Building 4D, 700 Robbins Avenue, Philadelphia, PA 19111-5094.
11.103 Market acceptance.
(a) Section 8002(c) of Pub. L. 103-355 provides that, in accordance
with agency procedures, the head of an agency may, under appropriate
circumstances, require offerors to demonstrate that the items offered--
(1) Have either--
(i) Achieved commercial market acceptance; or
(ii) Been satisfactorily supplied to an agency under current or recent contracts for the same or similar requirements; and
(2) Otherwise meet the item description, specifications, or other
criteria prescribed in the public notice and solicitation.
(b) Appropriate circumstances may, for example, include situations
where the agency's minimum need is for an item that has a demonstrated
reliability, performance or product support record in a specified
environment. Use of market acceptance is inappropriate when new or
evolving items may meet the agency's needs.
(c) In developing criteria for demonstrating that an item has
achieved commercial market acceptance, the contracting officer shall
ensure the criteria in the solicitation--
(1) Reflect the minimum need of the agency and are reasonably
related to the demonstration of an item's acceptability to meet the
agency's minimum need;
(2) Relate to an item's performance and intended use, not an
offeror's capability;
(3) Are supported by market research;
(4) Include consideration of items supplied satisfactorily under
recent or current Government contracts, for the same or similar items;
and
(5) Consider the entire relevant commercial market, including small business concerns.
(d) Commercial market acceptance shall not be used as a sole
criterion to evaluate whether an item meets the Government's
requirements.
(e) When commercial market acceptance is used, the contracting
officer shall document the file to--
(1) Describe the circumstances justifying the use of commercial
market acceptance criteria; and
(2) Support the specific criteria being used.
11.104 Items peculiar to one manufacturer.
Agency requirements shall not be written so as to require a
particular brand-name, product, or a feature of a product, peculiar to
one manufacturer, thereby precluding consideration of a product
manufactured by another company, unless--
(a) The particular brand-name, product, or feature is essential to
the Government's requirements, and market research indicates other
companies' similar products, or products lacking the particular
feature, do not meet, or can not be modified to meet, the agency's
minimum needs; and
(b) The authority to contract without providing for full and open
competition is supported by the required justifications and approvals
(see 6.302-1).
Subpart 11.2--Using and Maintaining Requirements Documents
11.201 Identification and availability of specifications.
(a) Solicitations citing requirements documents listed in the
General Services Administration (GSA) Index of Federal Specifications,
Standards and Commercial Item Descriptions, the DoD Index of
Specifications and Standards (DoDISS), or other agency index shall
identify each document's approval date and the dates of any applicable
amendments and revisions. Do not use general identification references,
such as ``the issue in effect on the date of the solicitation.''
Contracting offices will not normally furnish these cited documents
with the solicitation, except when--
(1) The requirements document must be furnished with the
solicitation to enable prospective contractors to make a competent evaluation of the solicitation;
(2) In the judgment of the contracting officer, it would be
impracticable for prospective contractors to obtain the documents in
reasonable time to respond to the solicitation; or
(3) A prospective contractor requests a copy of a Government
promulgated requirements document.
(b) Contracting offices shall clearly identify in the solicitation
any pertinent documents not listed in the GSA Index of Federal
Specifications, Standards and Commercial Item Descriptions or DoDISS.
Such documents shall be furnished with the solicitation or specific
instructions shall be furnished for obtaining or examining such
documents.
(c) When documents refer to other documents, such references shall
(1) Be restricted to documents, or appropriate portions of
documents, that apply in the acquisition;
(2) Cite the extent of their applicability;
(3) Not conflict with other documents and provisions of the
solicitation; and
(4) Identify all applicable first tier references.
(d) The GSA Index of Federal Specifications, Standards and
Commercial Item Descriptions may be purchased from the General Services Administration, Federal Supply Service Bureau, Specification Section, Suite 8100, 470 L'Enfant Plaza, SW, Washington, DC 20407, telephone (202) 755-0325/0326. The DoDISS may be purchased from the
Standardization Documents Desk, Building 4D, 700 Robbins Avenue,
Philadelphia, PA 19111-5094, telephone (215) 697-2569.
(e) Agencies may generally obtain from the GSA Specification
Section or the DOD Standardization Documents Desk those nongovernment (voluntary) standards adopted for use by Federal or Defense activities. Standards not available from these sources may be obtained from Government libraries, activities subscribing to document handling services or the organization responsible for the preparation,
publication or maintenance of the standard.
11.202 Maintenance of standardization documents.
(a) Recommendations for changes to standardization documents listed
in the GSA Index of Federal Specifications, Standards and Commercial
Item Descriptions should be submitted to the General Services
Administration, Federal Supply Service, Office of Acquisition,
Washington, DC 20406. Agencies shall submit recommendations for changes to standardization documents listed in the DoDISS to the cognizant preparing activity.
(b) When an agency cites an existing standardization document but
modifies it to meet its needs, the agency shall follow the guidance in
Federal Standardization Manual and, for Defense components, DoD 4120.3-M, Defense Standardization Program Policies and Procedures.
11.203 Customer satisfaction.
Acquisition organizations shall communicate with customers to
determine how well the requirements document reflects the customer's
needs and to obtain suggestions for corrective actions. Whenever
practicable, the agency may provide affected industry an opportunity to
comment on the requirements documents.
11.204 Solicitation provisions and contract clauses.
(a) The contracting officer shall insert the provision at 52.211-1,
Availability of Specifications Listed in the GSA Index of Federal
Specifications, Standards and Commercial Item Descriptions, in
solicitations that
(1) Are issued by civilian agency contracting offices and
(2) Cite specifications listed in the Index that are not furnished with the solicitation.
(b) The contracting officer shall insert the provision at 52.211-2,
Availability of Specifications Listed in the DoD Index of
Specifications and Standards (DoDISS), in solicitations that
(1) Are issued by DoD contracting offices and
(2) Cite specifications listed in the DoDISS that are not furnished with the solicitation.
(c) The contracting officer shall insert a provision substantially
the same as the provision at 52.211-3, Availability of Specifications
Not Listed in the GSA Index of Federal Specifications, Standards and
Commercial Item Descriptions, in solicitations that cite specifications
that are not listed in the Index and are not furnished with the
solicitation, but may be obtained from a designated source.
(d) The contracting officer shall insert a provision substantially
the same as the provision at 52.211-4, Availability for Examination of
Specifications Not Listed in the GSA Index of Federal Specifications,
Standards and Commercial Item Descriptions, in solicitations that cite
specifications that are not listed in the Index and are available for
examination at a specified location.
Subpart 11.3--Acquiring Other Than New Material, Former Government
Surplus Property, and Residual Inventory
11.301 Policy.
(a) Agencies shall allow offers of other than new material, former
Government surplus property, or residual inventory unless it is
determined that such materials are unacceptable. When acquiring
commercial items, the contracting officer should consider the customary
practice in the industry for the item being acquired. When only new
material is acceptable, the solicitation shall clearly identify the
material that must be new. Offerors providing other than new material
shall be required to comply with the clause at 52.211-5, New Material,
the provision at 52.211-6, Listing of Other Than New Material, Residual
Inventory, and Former Government Surplus Property, and the clause at
52.211-7, Other Than New Material, Residual Inventory, and Former
Government Surplus Property, as appropriate.
(b) Agencies shall specify products, including packaging, that
contain the highest practicable percentage of recovered and
environmentally preferable materials, and where applicable, post-
consumer material, consistent with performance requirements,
availability, price reasonableness, and cost-effectiveness.
(c) Contracting officers shall consider the following when
determining whether other than new materials, former Government surplus property, or residual inventory are acceptable:
(1) Safety of persons or property.
(2) Specification and performance requirements.
(3) Price reasonableness.
(4) Total cost to the Government (including maintenance,
inspection, testing, and useful life).
(d) When a contract calls for material to be furnished at cost, the
allowable charge for former Government surplus property shall not
exceed the cost at which the contractor acquired the property.
11.302 Solicitation provisions and contract clauses.
(a) The contracting officer may insert the clause at 52.211-5, New
Material, in solicitations and contracts for supplies. The clause shall
not be used if it would be contrary to customary commercial practices
for the item being acquired.
(b) The contracting officer shall insert the provision at 52.211-6,
Listing of Other Than New Material, Residual Inventory, and Former
Government Surplus Property, in solicitations containing the clause at 52.211-5.
(c) The contracting officer shall insert the clause at 52.211-7,
Other Than New Material, Residual Inventory, and Former Government
Surplus Property, in contracts containing the clause at 52.211-5.
Subpart 11.4--[Redesignated from 12.1]
21. and 22. Subpart 11.4 is redesignated from Subpart 12.1 and
sections 12.101 through 12.104 are redesignated as sections 11.401
through 11.404, respectively.
23. Newly redesignated section 11.401 is amended in paragraph (a)
by revising the last sentence; and in the parenthetical of paragraph
(c) by removing ``Subpart 12.2'' and inserting ``Subpart 11.5''. The
revised text reads as follows:
11.401 General.
(a) * * * Schedules that are unnecessarily short or difficult to
attain
(1) Tend to restrict competition,
(2) Are inconsistent with small business policies, and
(3) May result in higher contract prices.
* * * * *
24. Newly redesignated section 11.402 is amended by revising
paragraphs (a) (2) and (5) to read as follows:
11.402 Factors to consider in establishing schedules.
(a) * * *
(2) Industry practices;
* * * * *
(5) Production time;
* * * * *
11.404 [Amended]
25. Newly redesignated section 11.404 is amended in paragraph
(a)(2) by removing ``52.212-1'' and inserting ``52.211-8''; in
paragraph (a)(3) by removing ``52.212-2'' and inserting ``52.211-9'';
and in paragraph (b) by removing ``52.212-3'' and inserting ``52.211-
10''.
Subpart 11.5--[Redesignated From Subpart 12.2]
26. Subpart 11.5 is redesignated from Subpart 12.2 and sections
11.501 through 11.504 are redesignated from sections 12.201 through
12.204, respectively.
11.504 [Amended]
27. Newly designated 11.504 is amended in paragraph (a) by removing
``52.212-4'' and inserting ``52.211-11''; in paragraph (b) by removing
``52.212-5'' and inserting ``52.211-12''; and in paragraph (c) by
removing ``52.212-6'' and ``52.212-5'' and inserting ``52.211-13'' and
``52.211-12'', respectively.
Subpart 11.6 [Redesignated From 12.3]
28. Subpart 11.6 is redesignated from Subpart 12.3 and sections
11.600 through 11.604 are redesignated from sections 12.300 through
12.304, respectively.
11.604 [Amended]
29. Newly redesignated section 11.604 is amended in paragraph (a)
by removing ``52.212-7'' and inserting ``52.211-14''; and in paragraph
(b) by removing ``52.212-8'' and inserting ``52.211-15''.
Subpart 11.7--[Redesignated From 12.4]
30. Subpart 11.7 is redesignated from Subpart 12.4 and sections
11.701 through 11.703 are redesignated from 12.401 through 12.403,
respectively.
11.703 [Amended]
31. Newly redesignated section 11.703 is amended in paragraph (a)
by removing ``52.212-9'' and inserting ``52.211-16''; in paragraph (b)
by removing ``52.212-10'' and inserting ``52.211-17''; and in paragraph
(c) by removing ``52.212-11'' and inserting ``52.211-18''.
32. Subpart 12.5 is redesignated as Subpart 42.13 and sections
12.501 through 12.505 are redesignated as sections 42.1301 through
42.1305, respectively.
33. Part 12 is revised to read as follows:
PART 12--ACQUISITION OF COMMERCIAL ITEMS
Sec.
12.000 Scope of part.
12.001 Definition.
Subpart 12.1--Acquisition of Commercial Items--General
12.101 Policy.
12.102 Applicability.
Subpart 12.2--Special Requirements for the Acquisition of Commercial
Items
12.201 General.
12.202 Market research and description of agency need.
12.203 Procedures for solicitation, evaluation, and award.
12.204 Solicitation/contract form.
12.205 Offers.
12.206 Use of past performance.
12.207 Contract type.
12.208 Contract quality assurance.
12.209 Pricing of commercial items when contracting by negotiation.
12.210 Contract financing.
12.211 Technical data.
12.212 Computer software.
12.213 Other customary commercial practices.
Subpart 12.3--Solicitation Provisions and Contract Clauses for the
Acquisition of Commercial Items
12.300 Scope of subpart.
12.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
12.302 Tailoring of provisions and clauses for the acquisition of
commercial items.
12.303 Contract format.
Subpart 12.4--Unique Requirements Regarding Terms and Conditions for
Commercial Items
12.401 General.
12.402 Acceptance.
12.403 Termination.
12.404 Warranties.
Subpart 12.5--Applicability of Certain Laws to the Acquisition of
Commercial Items
12.500 Scope of subpart.
12.501 Applicability.
12.502 Procedures.
12.503 Applicability of certain laws to Executive agency contracts
for the acquisition of commercial items.
12.504 Applicability of certain laws to subcontracts for the
acquisition of commercial items.
Subpart 12.6--Streamlined Procedures for Evaluation and Solicitation
for Commercial Items
12.601 General.
12.602 Streamlined evaluation of offers.
12.603 Streamlined solicitation for commercial
items.
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
12.000 Scope of part.
This part prescribes policies and procedures unique to the
acquisition of commercial items. It implements the Federal Government's
preference for the acquisition of commercial items contained in Title
VIII of the Federal Acquisition Streamlining Act of 1994 (Public Law
103-355) by establishing acquisition policies more closely resembling
those of the commercial marketplace and encouraging the acquisition of
commercial items and components.
12.001 Definition.
Subcontract, as used in this part, includes, but is not limited to,
a transfer of commercial items between divisions, subsidiaries, or
affiliates of a contractor or subcontractor.
Subpart 12.1--Acquisition of Commercial Items-- General
12.101 Policy.
Agencies shall--
(a) Conduct market research to determine whether commercial items
or nondevelopmental items are available that could meet the agency's
requirements;
(b) Acquire commercial items or nondevelopmental items when they
are available to meet the needs of the agency; and
(c) Require prime contractors and subcontractors at all tiers to
incorporate, to the maximum extent practicable, commercial items or
nondevelopmental items as components of items supplied to the agency.
12.102 Applicability.
(a) This part shall be used for the acquisition of supplies or
services that meet the definition of commercial items at section 2.101.
(b) Contracting officers shall use the policies in this part in
conjunction with the policies and procedures for solicitation,
evaluation and award prescribed in part 13, Simplified Acquisition
Procedures; part 14, Sealed Bidding; or part 15, Contracting by
Negotiation, as appropriate for the particular acquisition.
(c) Contracts for the acquisition of commercial items are subject
to the policies in other parts of this chapter. When a policy in
another part of this chapter is inconsistent with a policy in this
part, this part 12 shall take precedence for the acquisition of
commercial items.
(d) This part shall not apply to the acquisition of commercial
items--
(1) At or below the micro-purchase threshold (see subpart 13.6);
(2) Using the SF 44 (see section 13.505-3);
(3) Using the imprest fund (see subpart 13.4); or
(4) Using the Governmentwide commercial purchase card (see subpart 13.6).
Subpart 12.2--Special Requirements for the Acquisition of
Commercial Items.
12.201 General.
Public Law 103-355 establishes special requirements for the
acquisition of commercial items intended to more closely resemble those
customarily used in the commercial marketplace. This subpart identifies
those special requirements as well as other considerations necessary
for proper planning, solicitation, evaluation and award of contracts
for commercial items.
12.202 Market research and description of agency need.
(a) Market research (see 10.001) is an essential element of
building an effective strategy for the acquisition of commercial items
and establishes the foundation for the agency description of need (see
part 11), the solicitation, and resulting contract.
(b) The description of agency need must contain sufficient detail
for potential offerors of commercial items to know which commercial
products or services to offer. Generally, for acquisitions in excess of
the simplified acquisition threshold, an agency's statement of need for
a commercial item will describe the product or service to be acquired
and explain how the agency intends to use the product or service in
terms of function to be performed, performance requirement or essential
physical characteristics. Describing the agency's need in these terms
allows offerors to propose methods that will best meet the needs of the
Government.
(c) Follow the procedures in subpart 11.2 regarding the
identification and availability of specifications, standards and
commercial item descriptions.
12.203 Procedures for solicitation, evaluation, and award.
Contracting officers shall use the policies unique to the
acquisition of commercial items prescribed in this part in conjunction
with the policies and procedures for solicitation, evaluation and award
prescribed in part 13, Simplified Acquisition Procedures; part 14,
Sealed Bidding; or part 15, Contracting by Negotiation, as appropriate
for the particular acquisition. The contracting officer may use the
streamlined procedure for soliciting offers for commercial items
prescribed in 12.603.
12.204 Solicitation/contract form.
The Standard Form 1449, Solicitation/Contract/Order for Commercial
Items, shall be used by the contracting officer when issuing written
solicitations and awarding contracts and placing orders for commercial
items. This form contains the information necessary for solicitations
and contracts. The form may also be used for documenting receipt,
inspection and acceptance of commercial items. Other forms shall not be
used for solicitation or award of contracts or orders for the
acquisition of commercial items.
12.205 Offers.
(a) Where technical information is necessary for evaluation of
offers, agencies should, as part of market research, review existing
product literature generally available in the industry to determine its
adequacy for purposes of evaluation. If adequate, contracting officers
shall request existing product literature from offerors of commercial
items in lieu of unique technical proposals.
(b) Contracting officers should allow offerors to propose more than
one product that will meet a Government need in response to
solicitations for commercial items. The contracting officer shall
evaluate each product as a separate offer.
(c) Contracting officers may, considering the circumstances
described in 5.203(b), allow fewer than 30 days response time for
receipt of offers for commercial items.
12.206 Use of past performance.
Past performance should be an important element of every evaluation
and contract award for commercial items. Contracting officers should
consider past performance data from a wide variety of sources both
inside and outside the Federal Government in accordance with the
policies and procedures contained in subpart 9.1, section 13.106-1, or
subpart 15.6, as applicable.
12.207 Contract type.
Agencies shall use firm-fixed-price contracts or fixed-price
contracts with economic price adjustment for the acquisition of
commercial items. Indefinite-delivery contracts (see subpart 16.5) may
be used where the prices are established based on a firm-fixed-price or
fixed-price with economic price adjustment. Use of any other contract
type to acquire commercial items is prohibited.
12.208 Contract quality assurance.
Contracts for commercial items shall rely on contractors' existing
quality assurance systems as a substitute for Government inspection and
testing before tender for acceptance unless customary market practices
for the commercial item being acquired include in-process inspection.
Any in-process inspection by the Government shall be conducted in a
manner consistent with commercial practice.
12.209 Pricing of commercial items when contracting by negotiation.
(a) When contracting by negotiation for commercial items, the
policies and procedures in part 15 shall be used to establish the
reasonableness of prices.
(b) The provisions and clauses prescribed in this part for the
acquisition of commercial items do not include the provisions and
clauses prescribed in part 15 because they assume prices for commercial
items will either
(1) Not be subject to the Truth in Negotiations Act because the contract price is below the dollar threshold for application of the Act; or
(2) Be based upon one of the exceptions to cost or pricing data
requirements contained in 15.804-1(a)(1).
(c) If the contracting officer determines it is appropriate to use
the commercial item exception to cost or pricing data requirements (see
15.804-1(a)(2)), the provisions and clauses prescribed in 15.804-8 and
15.106 for this purpose shall be inserted in an addendum to the
solicitation and contract.
(d) If the contracting officer is required to obtain cost or
pricing data (see 15.804-1(b)(4) and 15.804-2), the provisions and
clauses prescribed in 15.804-8 and 15.106 for this purpose shall be
inserted in an addendum to the solicitation and contract.
(e) When a contract is priced using the exceptions at 15.804-
1(a)(1), no cost or pricing data may be obtained for modifications
unless the proposed modification would change the contract from a
contract for a commercial item to a contract for other than a
commercial item (see 15.804-1(b)(6)). If the exceptions at 15.804-
1(a)(1) are not used, the contracting officer may be required to obtain
cost or pricing data to determine the reasonableness of prices for
subsequent modifications (see 15.804-2(a)(1)) and the contracting
officer shall insert the provisions and clauses prescribed for this
purpose in an addendum to the solicitation and contract.
12.210 Contract financing.
Customary market practice for some commercial items may include
buyer contract financing. The contracting officer may offer Government
financing in accordance with the policies and procedures in part 32.
12.211 Technical data.
Except as provided by agency-specific statutes, the Government
shall acquire only the technical data and the rights in that data
customarily provided to the public with a commercial item or process.
The contracting officer shall presume that data delivered under a
contract for commercial items was developed exclusively at private
expense. When a contract for commercial items requires the delivery of
technical data, the contracting officer shall include appropriate
provisions and clauses delineating the rights in the technical data in
addenda to the solicitation and contract (see part 27 or agency FAR
supplements).
12.212 Computer software.
(a) Commercial computer software or commercial computer software
documentation shall be acquired under licenses customarily provided to
the public to the extent such licenses are consistent with Federal law
and otherwise satisfy the Government's needs. Generally, offerors and
contractors shall not be required to--
(1) Furnish technical information related to commercial computer software or commercial computer software documentation that is not customarily provided to the public; or
(2) Relinquish to, or otherwise provide, the Government rights to use, modify, reproduce, release, perform, display, or disclose
commercial computer software or commercial computer software
documentation except as mutually agreed to by the parties.
(b) With regard to commercial computer software and commercial
computer software documentation, the Government shall have only those
rights specified in the license contained in any addendum to the
contract.
12.213 Other customary commercial practices.
It is customary practice in the commercial marketplace for both the
buyer and seller to propose terms and conditions for a given
transaction, each written from their particular perspectives. The terms
and conditions prescribed in this part 12 seek to balance the interests
of both the buyer and seller. These terms and conditions are generally
appropriate for use in a wide range of acquisitions. However, market
research may indicate other customary commercial practices that are
appropriate for the acquisition of the particular item. These practices
should be considered for incorporation into the solicitation and
contract if the contracting officer determines them appropriate in
concluding a business arrangement satisfactory to both parties and not
otherwise precluded by law or executive order.
Subpart 12.3--Solicitation Provisions and Contract Clauses for the
Acquisition of Commercial Items
12.300 Scope of subpart.
This subpart establishes provisions and clauses to be used when
acquiring commercial items.
12.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
(a) In accordance with Section 8002 of Public Law 103-355 (41 U.S.C
264, note), contracts for the acquisition of commercial items shall, to
the maximum extent practicable, include only those clauses--
(1) Required to implement provisions of law or executive orders
applicable to the acquisition of commercial items; or
(2) Determined to be consistent with customary commercial practice.
(b) To implement this Act, the contracting officer shall insert the
following provisions in solicitations for the acquisition of commercial
items, and clauses in solicitations and contracts for the acquisition
of commercial items:
(1) The provision at 52.212-1, Instructions to Offerors--Commercial Items. This provision provides a single, streamlined set of
instructions to be used when soliciting offers for commercial items and
is incorporated in the solicitation by reference (see Block 26, SF
1449). The contracting officer may tailor these instructions or provide
additional instructions tailored to the specific acquisition in
accordance with 12.302;
(2) The provision at 52.212-3, Offeror Representations and
Certifications--Commercial Items. This provision provides a single,
consolidated list of certifications and representations for the
acquisition of commercial items and is attached to the solicitation for
offerors to complete and return with their offer. This provision may
not be tailored except in accordance with Subpart 1.4;
(3) The clause at 52.212-4, Contract Terms and Conditions--
Commercial Items. This clause includes terms and conditions which are,
to the maximum extent practicable, consistent with customary commercial
practices and is incorporated in the solicitation and contract by
reference (see Block 26, SF 1449). The contracting officer may tailor
this clause in accordance with 12.302; and
(4) The clause at 52.212-5, Contract Terms and Conditions Required to Implement Statutes or Executive Orders--Commercial Items. This clause incorporates by reference only those clauses required to
implement provisions of law or executive orders applicable to the
acquisition of commercial items. The contracting officer shall attach
this clause to the solicitation and contract and, using the appropriate
clause prescriptions, indicate which, if any, of the additional clauses
cited in 52.2125(b) or (c) are applicable to the specific acquisition.
When cost information is obtained pursuant to part 15 to establish the
reasonableness of prices for commercial items, the contracting officer
shall insert the clauses prescribed for this purpose in an addendum to
the solicitation and contract. This clause may not be tailored.
(c) When the use of evaluation factors is appropriate, the
contracting officer may--
(1) Insert the provision at 52.212-2, Evaluation-- Commercial
Items, in solicitations for commercial items (see 12.602); or
(2) Include a similar provision containing all evaluation factors
required by section 13.106-1, Subpart 14.2 or subpart 15.6, as an
addendum (see 12.302(d)).
(d) Use of required provisions and clauses. Notwithstanding
prescriptions contained elsewhere in the FAR, when acquiring commercial
items, contracting officers shall be required to use only those
provisions and clauses prescribed in this part. The provisions and
clauses prescribed in this part shall be revised, as necessary, to
reflect the applicability of statutes and executive orders to the
acquisition of commercial items.
(e) Discretionary use of FAR provisions and clauses. The
contracting officer may include in solicitations and contracts by
addendum other FAR provisions and clauses when their use is consistent
with the limitations contained in 12.302. For example:
(1) The contracting officer may include appropriate clauses when an indefinite-delivery type of contract will be used. The clauses
prescribed at 16.505 may be used for this purpose.
(2) The contracting officer may include appropriate provisions and clauses when the use of options is in the Government's interest. The
provisions and clauses prescribed in 17.208 may be used for this
purpose. If the provision at 52.212-2 is used, paragraph (b) provides
for the evaluation of options.
(3) The contracting officer may use the provisions and clauses
contained in part 23 regarding the use of recovered material when
appropriate for the item being acquired.
(f) Agencies may supplement the provisions and clauses prescribed
in this part (to require use of additional provisions and clauses) only
as necessary to reflect agency unique statutes applicable to the
acquisition of commercial items or as may be approved by the agency
senior procurement executive, or the individual responsible for
representing the agency on the FAR Council, without power of
delegation.
12.302 Tailoring of provisions and clauses for the acquisition of
commercial items.
(a) General. The provisions and clauses established in this subpart
are intended to address, to the maximum extent practicable, customary
commercial market practices for a wide range of potential Government
acquisitions of commercial items. However, because of the broad range
of commercial items acquired by the Government, variations in customary
commercial practices across markets and the relative volume of the
Government's acquisitions in the specific market, contracting officers
may, within the limitations of this subpart, and after conducting
appropriate market research, tailor the provision at 52.212-1,
Instructions to Offerors--Commercial Items, and the clause at 52.212-4,
Contract Terms and Conditions--Commercial Items, to adapt to the market conditions for each acquisition.
(b) Tailoring 52.212-4, Contract Terms and Conditions--Commercial
Items. The following paragraphs of the clause at 52.212-4, Contract
Terms and Conditions--Commercial Items, implement statutory
requirements and shall not be tailored--
(1) Assignments;
(2) Disputes;
(3) Payment;
(4) Invoice;
(5) Other compliances; and
(6) Compliance with laws unique to Government contracts.
(c) Tailoring inconsistent with customary commercial practice. The
contracting officer shall not tailor any clause or otherwise include
any additional terms or conditions in a solicitation or contract for
commercial items in a manner that is inconsistent with customary
commercial practice for the item being acquired unless a waiver is
approved in accordance with agency procedures. The request for waiver
must describe the customary commercial practice found in the
marketplace, support the need to include a term or condition that is
inconsistent with that practice and include a determination that use of
the customary commercial practice is inconsistent with the needs of the
Government. A waiver may be requested for an individual or class of
contracts for that specific item.
(d) Tailoring shall be by addenda to the solicitation and contract.
The contracting officer shall indicate in Block 26 of the SF 1449 if
addenda are attached. These addenda may include, for example, a
continuation of the schedule of supplies/services to be acquired from
blocks 18 through 21 of the SF 1449; a continuation of the description
of the supplies/services being acquired; further elaboration of any
other item(s) on the SF 1449; any other terms or conditions necessary
for the performance of the proposed contract (such as options, ordering
procedures for indefinite-delivery type contracts, warranties, contract
financing arrangements, etc.).
12.303 Contract format.
Solicitations and contracts for the acquisition of commercial items
prepared using this part 12 shall be assembled, to the maximum extent
practicable, using the following format:
(a) Standard Form (SF) 1449;
(b) Continuation of any block from SF 1449, such as--
(1) Block 10 if set-aside for emerging small businesses;
(2) Block 16B for remittance address;
(3) Block 18 for contract line item numbers;
(4) Block 19 for schedule of supplies/services; or
(5) Block 24 for accounting data;
(c) Contract clauses--
(1) 52.212-4, Contract Terms and Conditions--Commercial Items, by reference (see SF 1449, Block 26);
(2) Any addendum to 52.212-4; and
(3) 52.212-5, Contract Terms and Conditions Required to Implement Statutes and Executive Orders;
(d) Any contract documents, exhibits or attachments; and
(e) Solicitation provisions--
(1) 52.212-1, Instructions to Offerors--Commercial Items, by
reference (see SF 1449, Block 26);
(2) Any addendum to 52.212-1;
(3) 52.212-2, Evaluation--Commercial Items, or other description of evaluation factors for award, if used; and
(4) 52.212-3, Offeror Representations and Certifications--
Commercial Items.
Subpart 12.4--Unique Requirements Regarding Terms and Conditions
for Commercial Items
12.401 General.
This subpart provides--
(a) Guidance regarding tailoring of the paragraphs in the clause at
52.212-4, Contract Terms and Conditions--Commercial Items, when the
paragraphs do not reflect the customary practice for a particular
market; and
(b) Guidance on the administration of contracts for commercial
items in those areas where the terms and conditions in 52.212-4 differ
substantially from those contained elsewhere in the FAR.
12.402 Acceptance.
(a) The acceptance paragraph in 52.212-4 is based upon the
assumption that the Government will rely on the contractor's assurances
that the commercial item tendered for acceptance conforms to the
contract requirements. The Government inspection of commercial items
will not prejudice its other rights under the acceptance paragraph.
Additionally, although the paragraph does not address the issue of
rejection, the Government always has the right to refuse acceptance of
nonconforming items. This paragraph is generally appropriate when the
Government is acquiring noncomplex commercial items.
(b) Other acceptance procedures may be more appropriate for the
acquisition of complex commercial items or commercial items used in
critical applications. In such cases, the contracting officer shall
include alternative inspection procedure(s) in an addendum and ensure
these procedures and the postaward remedies adequately protect the
interests of the Government. The contracting officer must carefully
examine the terms and conditions of any express warranty with regard to the effect it may have on the Government's available postaward remedies (see 12.404).
(c) The acquisition of commercial items under other circumstances
such as on an ``as is'' basis may also require acceptance procedures
different from those contained in 52.212-4. The contracting officer
should consider the effect the specific circumstances will have on the
acceptance paragraph as well as other paragraphs of the clause.
12.403 Termination.
(a) General. The clause at 52.212-4 permits the Government to
terminate a contract for commercial items either for the convenience of
the Government or for cause. However, the paragraphs in 52.212-4
entitled ``Termination for the Government's Convenience'' and
``Termination for Cause'' contain concepts which differ from those
contained in the termination clauses prescribed in part 49.
Consequently, the requirements of part 49 do not apply when terminating
contracts for commercial items and contracting officers shall follow
the procedures in this section. Contracting officers may continue to
use part 49 as guidance to the extent that part 49 does not conflict
with this section and the language of the termination paragraphs in
12.212-4.
(b) Policy. The contracting officer should exercise the
Government's right to terminate a contract for commercial items either
for convenience or for cause only when such a termination would be in
the best interests of the Government. The contracting officer should
consult with counsel prior to terminating for cause.
(c) Termination for cause.
(1) The paragraph in 52.2124 entitled
``Excusable Delay'' requires contractors notify the contracting officer
as soon as possible after commencement of any excusable delay. In most
situations, this requirement should eliminate the need for a show cause
notice prior to terminating a contract. The contracting officer shall
send a cure notice prior to terminating a contract for a reason other
than late delivery.
(2) The Government's rights after a termination for cause shall
include all the remedies available to any buyer in the marketplace. The
Government's preferred remedy will be to acquire similar items from
another contractor and to charge the defaulted contractor with any
excess reprocurement costs together with any incidental or
consequential damages incurred because of the termination.
(3) When a termination for cause is appropriate, the contracting officer shall send the contractor a written notification regarding the termination. At a minimum, this notification shall--
(i) Indicate the contract is terminated for cause;
(ii) Specify the reasons for the termination;
(iii) Indicate which remedies the Government intends to seek or provide a date by which the Government will inform the contractor of the remedy; and
(iv) State that the notice constitutes a final decision of the contracting officer and that the contractor has the right to appeal
under the Disputes clause (see 33.211).
(d) Termination for the Government's convenience.
(1) When the contracting officer terminates a contract for commercial items for the Government's convenience, the contractor shall be paid--
(i) The percentage of the contract price reflecting the percentage of the work performed prior to the notice of the termination, and
(ii) Any charges the contractor can demonstrate directly resulted from the termination. The contractor may demonstrate such charges using its standard record keeping system and is not required to comply with the cost accounting standards or the contract cost principles in part 31. The Government does not have any right to audit the contractor's records solely because of the termination for convenience.
(2) Generally, the parties should mutually agree upon the
requirements of the termination proposal. The parties must balance the
Government's need to obtain sufficient documentation to support payment
to the contractor against the goal of having a simple and expeditious
settlement.
12.404 Warranties.
(a) Implied warranties. The Government's post award rights
contained in 52.212-4 are the implied warranty of merchantability, the
implied warranty of fitness for particular purpose and the remedies
contained in the acceptance paragraph.
(1) The implied warranty of merchantability provides that an item is reasonably fit for the ordinary purposes for which such items are
used. The items must be of at least average, fair or medium-grade
quality and must be comparable in quality to those that will pass
without objection in the trade or market for items of the same
description.
(2) The implied warranty of fitness for a particular purpose
provides that an item is fit for use for the particular purpose for
an implied warranty of fitness for particular purpose when--
(i) The seller knows the particular purpose for which the
Government intends to use the item; and
(ii) The Government relied upon the contractor's skill and judgment that the item would be appropriate for that particular purpose.
(3) Contracting officers should consult with legal counsel prior to asserting any claim for a breach of an implied warranty.
(b) Express warranties. The Federal Acquisition Streamlining Act of
1994 (41 U.S.C. 264 note) requires contracting officers to take
advantage of commercial warranties. To the maximum extent practicable,
solicitations for commercial items shall require offerors to offer the
Government at least the same warranty terms, including offers of
extended warranties, offered to the general public in customary
commercial practice. Solicitations may specify minimum warranty terms,
such as minimum duration, appropriate for the Government's intended use
of the item.
(1) Any express warranty the Government intends to rely upon must meet the needs of the Government. The contracting officer should
analyze any commercial warranty to determine if--
(i) The warranty is adequate to protect the needs of the
Government, e.g., items covered by the warranty and length of warranty;
(ii) The terms allow the Government effective postaward
administration of the warranty to include the identification of
warranted items, procedures for the return of warranted items to the
contractor for repair or replacement, and collection of product
performance information; and
(iii) The warranty is cost-effective.
(2) In some markets, it may be customary commercial practice for contractors to exclude or limit the implied warranties contained in
52.212-4 in the provisions of an express warranty. In such cases, the
contracting officer shall ensure that the express warranty provides for
the repair or replacement of defective items discovered within a
reasonable period of time after acceptance.
(3) Express warranties shall be included in the contract by
addendum (see 12.302).
Subpart 12.5--Applicability of Certain Laws to the Acquisition of
Commercial Items
12.500 Scope of subpart.
As required by Section 34 of the Office of Federal Procurement
Policy Act (41 U.S.C. 430), this subpart lists provisions of laws that
are not applicable to contracts for the acquisition of commercial
items, or are not applicable to subcontracts, at any tier, for the
acquisition of a commercial item. This subpart also lists provisions of
law that have been amended to eliminate or modify their applicability
to either contracts or subcontracts for the acquisition of commercial
items.
12.501 Applicability.
(a) This subpart applies to any contract or subcontract at any tier
for the acquisition of commercial items.
(b) Nothing in this subpart shall be construed to authorize the
waiver of any provision of law with respect to any subcontract if the
prime contractor is reselling or distributing commercial items of
another contractor without adding value. This limitation is intended to
preclude establishment of unusual contractual arrangements solely for
the purpose of Government sales.
(c) For purposes of this subpart, contractors awarded subcontracts
under subpart 19.8, Contracting with the Small Business Administration
(the 8(a) Program), shall be considered prime contractors.
12.502 Procedures.
(a) The FAR prescription for the provision or clause for each of
the laws listed in 12.503 has been revised in the appropriate part to
reflect its proper application to prime contracts for the acquisition
of commercial items.
(b) For subcontracts for the acquisition of commercial items or
commercial components, the clauses at 52.212-5, Contract Terms and
Conditions Required to Implement Statutes or Executive Orders--
Commercial Items, and 52.244-6, Subcontracts for Commercial Items and
Commercial Components, reflect the applicability of the laws listed in
12.504 by identifying the only provisions and clauses that are required
to be included in a subcontract at any tier for the acquisition of
commercial items or commercial components.
12.503 Applicability of certain laws to executive agency contracts for
the acquisition of commercial items.
(a) The following laws are not applicable to executive agency
contracts for the acquisition of commercial items:
(1) 41 U.S.C. 43, Walsh-Healey Act (see subpart 22.6).
(2) 41 U.S.C. 254(a) and 10 U.S.C. 2306(b), Contingent Fees (see
3.404).
(3) 41 U.S.C. 416(a)(6), Minimum Response Time for Offers under Office of Federal Procurement Policy Act (see 5.203).
(4) 41 U.S.C. 701, et seq., Drug-Free Workplace Act of 1988 (see 23.501).
(b) Certain requirements of the following laws have been eliminated
for executive agency contracts for the acquisition of commercial items:
(1) 33 U.S.C. 1368, Requirement for a certificate and clause under the Federal Water Pollution Control Act (see 23.105).
(2) 40 U.S.C. 327 et seq., Requirement for a certificate and clause under the Contract Work Hours and Safety Standards Act (see 22.305).
(3) 41 U.S.C. 57(a) and (b), and 58, Requirement for a clause and certain other requirements related to the Anti-Kickback Act of 1986
(see 3.502).
(4) 41 U.S.C. 423(e)(1)(B), Requirement for a certain certification under the Procurement Integrity Act (see 3.104-9).
(5) 42 U.S.C. 7606, Requirements for a certificate and clause under the Clean Air Act (see 23.105).
(6) 49 U.S.C. 40118, Requirement for a certificate and clause under the Fly American provisions (see 47.405).
(c) The applicability of the following laws have been modified in
regards to Executive agency contracts for the acquisition of commercial
items:
(1) 41 U.S.C. 253g and 10 U.S.C. 2402, Prohibition on Limiting
Subcontractor Direct Sales to the United States (see 3.503).
(2) 41 U.S.C. 254(d) and 10 U.S.C. 2306a, Truth in Negotiations Act (see 15.804).
(3) 41 U.S.C. 422, Cost Accounting Standards (see 48 CFR chapter 99).
12.504 Applicability of certain laws to subcontracts for the
acquisition of commercial items.
(a) The following laws are not applicable to subcontracts at any
tier for the acquisition of commercial items or commercial components
at any tier:
(1) 15 U.S.C. 644(d), Requirements relative to labor surplus areas under the Small Business Act (see subpart 19.2).
(2) 19 U.S.C. 1202, Tariff Act of 1930 (see subpart 25.6).
(3) 19 U.S.C. 1309, Supplies for Certain Vessels and Aircraft (see subpart 25.6).
(4) 19 U.S.C. 2701, et seq., Authority to Grant Duty Free Treatment (see subpart 25.6).
(5) 31 U.S.C. 1352, Limitation on Payments to Influence Certain
Federal Transactions (see subpart 3.8).
(6) 41 U.S.C. 43, Walsh-Healey Act (see subpart 22.6).
(7) 41 U.S.C. 253d, Validation of Proprietary Data Restrictions
(see subpart 27.4).
(8) 41 U.S.C. 254(a) and 10 U.S.C. 2306(b), Contingent Fees (see
subpart 3.4).
(9) 41 U.S.C. 254d(c) and 10 U.S.C. 2313(c), Examination of Records of Contractor, when a subcontractor is not required to provide cost or pricing data (see subpart 15.1).
(10) 41 U.S.C. 351, Service Contract Act of 1965, as amended (see subpart 22.10).
(11) 41 U.S.C. 416(a)(6), Minimum Response Time for Offers under Office of Federal Procurement Policy Act (see subpart 5.2).
(12) 41 U.S.C. 418a, Rights in Technical Data (see subpart 27.4).
(13) 41 U.S.C. 701, et seq., Drug-Free Workplace Act of 1988 (see subpart 23.5).
(14) 46 U.S.C. 1241(b), Transportation in American Vessels of
Government Personnel and Certain Cargo (see subpart 47.5)
(inapplicability effective May 1, 1996).
(15) 49 U.S.C. 40118, Fly American provisions (see subpart 47.4).
(16) Public Law 90-469, William Langer Jewel Bearing Plant Special Act (see subpart 8.2).
(b) Certain requirements of the following laws have been eliminated
for subcontracts at any tier for the acquisition of commercial items or
commercial components:
(1) 33 U.S.C. 1368, Requirement for a certificate and clause under the Federal Water Pollution Control Act (see subpart 23.1).
(2) 40 U.S.C. 327, et seq., Requirement for a certificate and
clause under the Contract Work Hours and Safety Standards Act (see
subpart 22.3).
(3) 41 U.S.C. 423(e)(1)(B), Requirement for certain certifications
under the Procurement Integrity Act (see subpart 3.1).
(4) 42 U.S.C. 7606, Requirements for a certificate and clause under the Clean Air Act (see subpart 23.1).
(c) The applicability of the following laws have been modified in
regards to subcontracts at any tier for the acquisition of commercial
items or commercial components:
(1) 41 U.S.C. 253g and 10 U.S.C. 2402, Prohibition on Limiting
Subcontractor Direct Sales to the United States (see subpart 3.5).
(2) 41 U.S.C. 254(d) and 10 U.S.C. 2306a, Truth in Negotiations Act (see subpart 15.8).
(3) 41 U.S.C. 422, Cost Accounting Standards (see 48 CFR chapter 99).
Subpart 12.6--Streamlined Procedures for Evaluation and
Solicitation for Commercial Items
12.601 General.
This subpart provides optional procedures for--
(a) Streamlined evaluation of offers for commercial items; and
(b) Streamlined solicitation of offers for commercial items for use
where appropriate.
These procedures are intended to simplify the process of preparing
and issuing solicitations, and evaluating offers for commercial items
consistent with customary commercial practices.
12.602 Streamlined evaluation of offers.
(a) When evaluation factors are used, the contracting officer may
insert a provision substantially the same as the provision at 52.212-2,
Evaluation--Commercial Items, in solicitations for commercial items or
comply with the procedures in 13.106-1 if the acquisition is being made
using the procedures in part 13. When the provision at 52.212-2 is
used, paragraph (a) of the provision shall be tailored to the specific
acquisition to describe the evaluation factors and relative importance
of those factors. This provision contemplates an approach designed to
select the source whose offer will provide the Government with the
greatest value in terms of performance and other factors. Other methods
of evaluation and basis for award may be more appropriate for a given
acquisition.
(b) Offers shall be evaluated in accordance with the criteria
contained in the solicitation. For many commercial items, the criteria
need not be more detailed than technical (capability of the item
offered to meet the agency need), price and past performance. Technical
capability may be evaluated by how well the proposed products meet the
Government requirement instead of predetermined subfactors.
Solicitations for commercial items do not have to contain subfactors
for technical capability when the solicitation adequately describes the
item's intended use. A technical evaluation would normally include
examination of such things as product literature, product samples (if
requested), technical features and warranty provisions. Past
performance shall be evaluated in accordance with the procedures in
section 13.106-1 or subpart 15.6, as applicable. The contracting
officer shall ensure the instructions provided in the provision at
52.212-1, Instructions to Offerors--Commercial Items, and the
evaluation criteria provided in the provision at 52.212-2, Evaluation--
Commercial Items, are in agreement.
(c) Select the offer that is most advantageous to the Government
based on the factors contained in the solicitation. Fully document the
rationale for selection of the successful offeror including discussion
of any tradeoffs considered.
12.603 Streamlined solicitation for commercial items.
(a) When a written solicitation will be issued, the contracting
officer may use the following procedure to reduce the time required to
solicit and award contracts for the acquisition of commercial items.
This procedure combines the Commerce Business Daily (CBD) synopsis
required by 5.203 and the issuance of the solicitation into a single
document with the following limitations:
(1) Section 5.207 limits submissions to the CBD to 12,000 textual characters (approximately 3 \1/2\ single-spaced pages).
(2) This combined CBD synopsis/solicitation is only appropriate
where the solicitation is relatively simple and is not recommended for
use when lengthy addenda to the solicitation are necessary.
(b) When using the combined synopsis/solicitation procedure, the SF
1449 is not used for issuing the solicitation.
(c) To use these procedures, the contracting officer shall--
(1) Prepare the synopsis as described at 5.207 for items 1-16.
(2) In item 17, Description, include the following additional
information:
(i) The following statement:
This is a combined synopsis/solicitation for commercial items
prepared in accordance with the format in FAR Subpart 12.6, as
supplemented with additional information included in this notice.
This announcement constitutes the only solicitation; proposals are
being requested and a written solicitation will not be issued.
(ii) The solicitation number and a statement that the solicitation is issued as an invitation to bid (IFB), request for quotation (RFQ) or request for proposal (RFP).
(iii) A statement that the solicitation document and incorporated provisions and clauses are those in effect through Federal Acquisition Circular ______.
(iv) A notice regarding any set-aside and the associated standard industrial classification code and small business size standard. Also include a statement regarding the Small Business Competitiveness
Demonstration Program, if applicable.
(v) A list of contract line item number(s) and items, quantities and units of measure, (including option(s), if applicable).
(vi) Description of requirements for the items to be acquired.
(vii) Date(s) and place(s) of delivery and acceptance and FOB point.
(viii) A statement that the provision at 52.212-1, Instructions to Offerors--Commercial, applies to this acquisition and a statement regarding any addenda to the provision.
(ix) A statement regarding the applicability of the provision at 52.212-2, Evaluation--Commercial Items, if used, and the specific evaluation criteria to be included in paragraph (a) of that provision. If this provision is not used, describe the evaluation procedures to be used.
(x) A statement advising offerors to include a completed copy of the provision at 52.212-3, Offeror Representations and Certifications--Commercial Items, with its offer.
(xi) A statement that the clause at 52.212-4, Contract Terms and Conditions--Commercial Items, applies to this acquisition and a statement regarding any addenda to the clause.
(xii) A statement that the clause at 52.212-5, Contract Terms and Conditions Required To Implement Statutes Or Executive Orders--Commercial Items, applies to this acquisition and a statement regarding which, if any, of the additional FAR clauses cited in the clause are applicable to the acquisition.
(xiii) A statement regarding any additional contract requirement(s)
or terms and conditions (such as contract financing arrangements,
warranty requirements or GSA Delegation of Procurement Authority (DPA)
case number (see 48 CFR 201-39.106-4)) determined by the contracting
officer to be necessary for this acquisition and consistent with
customary commercial practices.
(xiv) A statement regarding the Defense Priorities and Allocations System (DPAS) and assigned rating, if applicable.
(xv) A statement regarding any applicable Commerce Business Daily numbered notes.
(xvi) The date, time and place offers are due.
(xvii) The name and telephone number of the individual to contact for information regarding the solicitation.
(3) Allow response time for receipt of offers as follows:
(i) Because the CBD synopsis and solicitation are contained in a single document, it is not necessary to publish a separate CBD synopsis 15 days before the issuance of the solicitation.
(ii) When using the combined CBD synopsis/solicitation, contracting officers shall establish a response time in accordance with 5.203(b), but shall allow at least 15 days response time from the date the notice is published in the CBD.
(4) Publish amendments to solicitations in the same manner as the initial synopsis/solicitation.
PART 14--SEALED BIDDING
14.201-2 [Amended]
34. Section 14.201-2 is amended in the parenthetical of paragraphs
(b) and (c) by removing ``part 10, Specifications, Standards, and Other
Product Descriptions'' and inserting ``part 11'' in its place; in
paragraph (d) by removing ``(see 10.004(e))''; and in the parenthetical
of paragraph (f) by revising the parenthetical to read ``(see subpart
11.4, Delivery or Performance Schedules).''
14.404-1 [Amended]
35. Section 14.404-1 is amended in paragraph (b) by removing
``10.008'' and inserting ``11.201''.
PART 15--CONTRACTING BY NEGOTIATION
15.406-2 [Amended]
36. Section 15.406-2 is amended in the parenthetical of paragraph
(c) by removing ``part 10, Specifications, Standards, and Other Product
Descriptions'' and inserting ``part 11''; in paragraph (d) by removing
``(see 10.004(e))''; and in paragraph (f) by revising the parenthetical
to read ``(subpart 11.4, Delivery or Performance Schedules, and 47.301-
1).''
37. Section 15.501 is amended by revising the definition
``Commercial product offer'' to read as follows:
15.501 Definitions.
* * * * *
Commercial item offer means an offer of a commercial item the
vendor wishes to see introduced in the Government's supply system as an alternate or replacement for an existing supply item.
* * * * *
15.503 [Amended]
38. Section 15.503 is amended in paragraph (b) by removing the word
``product'' and inserting ``item''.
39. Section 15.704 is amended by revising the second sentence to
read as follows:
15.704 Items and work included.
* * * Raw materials, commercial items (see 2.101), and off-the-
shelf items (see 46.101) shall not be included, unless their potential
impact on contract cost or schedule is critical. * * *
PART 16--TYPES OF CONTRACTS
40. Section 16.201 is amended by adding a sentence at the end of
the paragraph to read as follows:
16.201 General.
* * * The contracting officer shall use firm-fixed-price or fixed-
price with economic price adjustment contracts when acquiring
commercial items.
41. Section 16.202-2 is amended by revising the introductory
paragraph to read as follows:
16.202-2 Application.
A firm-fixed-price contract is suitable for acquiring commercial
items (see parts 2 and 12) or for acquiring other supplies or services
on the basis of reasonably definite functional or detailed
specifications (see part 11) when the contracting officer can establish
fair and reasonable prices at the outset, such as when--
* * * * *
42. Section 16.301-3 is amended by redesignating paragraphs (a)
through (c) as paragraph (a)(1) through (a)(3), respectively;
designating the introductory text as paragraph (a) introductory text
and adding new (b) to read as follows:
16.301-3 Limitations.
* * * * *
(b) The use of cost-reimbursement contracts is prohibited for the
acquisition of commercial items (see parts 2 and 12).
16.603-2 [Amended]
43. Section 16.603-2 is amended in paragraph (e) by removing
``12.304'' and inserting ``11.604''.
PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
44. Section 22.305 is amended by redesignating paragraph (g) as (h)
and adding a new paragraph (g) to read as follows:
22.305 Contract clause.
* * * * *
(g) Contracts for commercial items (see parts 2 and 12).
* * * * *
45. Section 22.604-1 is amended by revising paragraph (a) to read
as follows:
22.604-1 Statutory exemptions.
* * * * *
(a) Any item in those situations where the contracting officer is
authorized by the express language of a statute to purchase ``in the
open market'' generally (such as commercial items, see part 12); or
where a specific purchase is made under the conditions described in
6.302-2 in circumstances where immediate delivery is required by the
public exigency.
* * * * *
PART 23--ENVIRONMENTAL, CONSERVATION, OCCUPATIONAL SAFETY, AND
DRUG-FREE WORKPLACE
46. Section 23.104 is amended in paragraph (a)(1) by removing the
word ``or'' the second time it is used; in paragraph (a)(2) by removing
the period and inserting ``; or'' and adding paragraph (a)(3) to read
as follows:
23.104 Exemptions.
(a) * * * (3) for commercial items.
* * * * *
47. Section 23.501 is amended by redesignating paragraphs (b)
through (d) as (c) through (e) and adding a new paragraph (b) to read
as follows:
23.501 Applicability.
* * * * *
(b) Contracts for the acquisition of commercial items (see part 12);
* * * * *
PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES
31.106-3 [Amended]
48. Section 31.106-3 is amended in the section heading and the
first sentence of the undesignated paragraph by removing the word
``products'' and inserting ``items'' in their place.
PART 36--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS
36.202 [Amended]
49. Section 36.202 is amended in paragraph (a) by removing ``part
10'' and inserting ``part 11'' in its place.
36.206 [Amended]
50. Section 36.206 is amended by removing ``12.202'' and inserting
``11.502''.
36.303 [Amended]
51. Section 36.303 is amended in paragraph (c)(4) by removing
``12.1'' and inserting ``11.4''.
PART 42--CONTRACT ADMINISTRATION
42.1105 [Amended]
53. Section 42.1105 is amended by removing the reference ``subpart
12.3'' and inserting ``subpart 11.6''.
Subpart 42.13--[Redesignated from Subpart 12.5]
42.1304 [Amended]
54. and 55. Newly redesignated section 42.1304 (redesignated from
12.504) is amended in paragraph (a) by removing ``52.212-15'' and
inserting ``52.242-17''; and at the end of paragraph (d) by removing
the period and inserting ``, or information other than cost or pricing
data.'' in its place.
42.1305 [Amended]
56. Newly redesignated section 42.1305 (redesignated from 12.505)
is amended in paragraph (a) by removing ``52.212-12'' and inserting
``52.24214''; in paragraph (b)(1) by removing ``52.212-13'' and
inserting ``52.242-15''; in paragraph (c) by removing ``52.21214'' and
inserting ``52.242-16''; and in paragraph (d) by removing ``52.212-15''
and inserting ``52.242-17''.
PART 44--SUBCONTRACTING POLICIES AND PROCEDURES
57. Subpart 44.4, consisting of sections 44.400 through 44.403, is
added to read as follows:
Subpart 44.4--Subcontracts for Commercial Items and Commercial
Components
Sec.
44.400 Scope of subpart.
44.401 Applicability.
44.402 Policy requirements.
44.403 Contract clause.
Subpart 44.4--Subcontracts for Commercial Items and Commercial
Components
44.400 Scope of subpart.
This subpart prescribes the policies limiting the contract clauses
a prime contractor may be required to apply to any subcontractors that
are furnishing commercial items or commercial components in accordance
with Section 8002(b)(2) (Public Law 103-355).
44.401 Applicability.
This subpart applies to all contracts and subcontracts. For the
purpose of this subpart, the term ``subcontract'' has the same meaning
as defined in part 12.
44.402 Policy requirements.
(a) Contractors and subcontractors at all tiers shall, to the
maximum extent practicable:
(1) Be required to incorporate commercial items or nondevelopmental items as components of items delivered to the Government; and
(2) Not be required to apply to any of its divisions, subsidiaries, affiliates, subcontractors or suppliers that are furnishing commercial items or commercial components any clause, except those--
(i) Required to implement provisions of law or executive orders applicable to subcontractors furnishing commercial items or commercial components; or
(ii) Determined to be consistent with customary commercial practice for the item being acquired.
(b) The clause at 52.244-6, Subcontracts for Commercial Items and
Commercial Components, implements the policy in paragraph (a) of this
section. Notwithstanding any other clause in the prime contract, only
those clauses identified in the clause at 52.244-6 are required to be
in subcontracts for commercial items or commercial components.
(c) Agencies may supplement the clause at 52.244-6 only as
necessary to reflect agency unique statutes applicable to the
acquisition of commercial items.
44.403 Contract clause.
The contracting officer shall insert the clause at 52.244-6,
Subcontracts for Commercial Items and Commercial Components, in
solicitations and contracts for supplies or services other than
commercial items.
PART 46--QUALITY ASSURANCE
58. Section 46.101 is amended by adding in alphabetical order the
definition ``Commercial item'' to read as follows:
46.101 Definitions.
* * * * *
Commercial item (see 2.101).
* * * * *
59. Section 46.102 is amended in paragraph (e) by removing ``and'';
by redesignating paragraph (f) as (g) and adding a new paragraph (f) to
read as follows:
46.102 Policy.
* * * * *
(f) Contracts for commercial items shall rely on a contractor's
existing quality assurance system as a substitute for compliance with
Government inspection and testing before tender for acceptance unless
customary market practices for the commercial item being acquired
permit in-process inspection (Section 8002 of Public Law 103-355). Any
in-process inspection by the Government shall be conducted in a manner
consistent with commercial practice; and
* * * * *
46.202 [Amended]
60. Section 46.202 is amended by removing ``three'' and inserting
``four''.
61. Sections 46.202-1 through 46.202-3 are redesignated as 46.202-2
through 46.202-4 and a new 46.202-1 is added to read as follows:
46.202-1 Contracts for commercial items.
When acquiring commercial items (see part 12), the Government shall
rely on contractors' existing quality assurance systems as a substitute
for Government inspection and testing before tender for acceptance
unless customary market practices for the commercial item being
acquired include in-process inspection. Any in-process inspection by
the Government shall be conducted in a manner consistent with
commercial practice.
46.202-2 [Amended]
62. Newly redesignated section 46.202-2 is amended in paragraph
(b)(1) by removing ``(see 46.204 and Table 46-1)''.
46.202-4 [Amended]
63. Newly redesignated section 46.202-4 is amended in paragraph
(a)(1) by removing ``(see 46.204 and Table 46-1)''.
64. Section 46.203 is amended by revising paragraph (a)(1); at the
end of paragraph (a)(2) by removing ``;or'' and inserting a period; and
by removing paragraph (a)(3). The revised text reads as follows:
46.203 Criteria for use of contract quality requirements.
* * * * *
(a) * * *
(1) Commercial (described in commercial catalogs, drawings, or
industrial standards; see part 2); or
* * * * *
46.204 [Removed and reserved]
65. Section 46.204 and Table 46-1 are
removed.
46.301 [Amended]
66. Section 46.301 is amended by removing ``46.202-1(b)'' and
inserting ``46.202-2(b)'' in its place.
46.311 and 46.402 [Amended]
67. Sections 46.311 and 46.402(e) are amended by removing ``46.202-
3'' and inserting ``46.202-4'' in their place.
46.404 [Amended]
68. Section 46.404 is amended at the end of paragraph (a) by
removing ``46.202-1'' and inserting ``46.202-2'' in its place; in
paragraph (b) introductory text by removing ``46.202-1(b)'' and
inserting ``46.202-2(b)'' in its place; and in paragraph (b)(2) by
removing the last sentence.
69. Section 46.709 is revised to read as follows:
46.709 Warranties of commercial items.
The contracting officer should take advantage of commercial
warranties, including extended warranties, where appropriate and in the
Government's best interests, offered by the contractor for the repair
and replacement of commercial items (see part 12).
70. Section 46.710 is amended by revising the first sentence of the
introductory paragraph; by removing paragraphs (a)(2) and (b)(2) and
redesignating paragraphs (a)(3) through (a)(6) as (a)(2) through
(a)(5), and paragraphs (b)(3) through (b)(5) as (b)(2) through (b)(4),
respectively. The revised text reads as follows:
46.710 Contract clauses.
The clauses and alternates prescribed in this section may be used
in solicitations and contracts in which inclusion of a warranty is
appropriate (see 46.709 for warranties for commercial items). * * *
* * * * *
PART 47--TRANSPORTATION
71. Section 47.405 is amended by revising the last sentence to read
as follows:
47.405 Contract clause.
* * * This clause does not apply to contracts awarded using the
simplified acquisition procedures in part 13 or contracts for
commercial items (see part 12).
72. Section 47.504 is amended by adding paragraph (e) to read as
follows:
47.504 Exceptions.
* * * * *
(e) Beginning May 1, 1996, subcontracts for the acquisition of
commercial items or commercial components (see 12.504(a)(13)). This
exception does not apply to grants-in-aid shipments, such as
agricultural and food-aid shipments, to shipments covered under Export-
Import Bank loans or guarantees, and to subcontracts under Government
contracts or agreements for ocean transportation
services.
PART 49--TERMINATION OF CONTRACTS
49.402-7 [Amended]
73. Section 49.402-7 is amended in the last sentence of paragraph
(a) by removing ``52.212-4'' and inserting ``52.211-11'' in its place.
74. Section 49.501 is revised to read as follows:
49.501 General.
This subpart prescribes the principal contract termination clauses.
For contracts for the acquisition of commercial items, this part
provides administrative guidance which may be followed when it is
consistent with the requirements and procedures in the clause at
52.212-4, Contract Terms and Conditions--Commercial Items. In
appropriate cases, agencies may authorize the use of special purpose
clauses, if consistent with this chapter.
49.607 [Amended]
75. Section 49.607 is amended by removing from the introductory
text ``12.5'' and inserting ``42.13''.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
76. Section 52.202-1 is amended by revising the date of the clause;
by redesignating paragraphs (b) and (c) as (f) and (g), and adding new
paragraphs (b), (c), (d), and (e) to read as follows:
52.202-1 Definitions.
* * * * *
Definitions (Oct. 1995)
* * * * *
(b) Commercial component means any component that is a
commercial item.
(c) Commercial item means--
(1) Any item, other than real property, that is of a type
customarily used for nongovernmental purposes and that--
(i) Has been sold, leased, or licensed to the general public; or
(ii) Has been offered for sale, lease, or license to the general public;
(2) Any item that evolved from an item described in paragraph
(c)(1) of this clause through advances in technology or performance
and that is not yet available in the commercial marketplace, but
will be available in the commercial marketplace in time to satisfy
the delivery requirements under a Government solicitation;
(3) Any item that would satisfy a criterion expressed in
paragraphs (c)(1) or (c)(2) of this clause, but for--
(i) Modifications of a type customarily available in the
commercial marketplace; or
(ii) Minor modifications of a type not customarily available in the commercial marketplace made to meet Federal Government requirements. ``Minor'' modifications means modifications that do not significantly alter the nongovernmental function or essential physical characteristics of an item or component, or change the
purpose of a process. Factors to be considered in determining
whether a modification is minor include the value and size of the
modification and the comparative value and size of the final
product. Dollar values and percentages may be used as guideposts,
but are not conclusive evidence that a modification is minor;
(4) Any combination of items meeting the requirements of
paragraphs (c)(1), (2), (3), or (5) of this clause that are of a
type customarily combined and sold in combination to the general
public;
(5) Installation services, maintenance services, repair
services, training services, and other services if such services are
procured for support of an item referred to in paragraphs (c)(1),
(2), (3), or (4) of this clause, and if the source of such
services--
(i) Offers such services to the general public and the Federal
Government contemporaneously and under similar terms and conditions;
and
(ii) Offers to use the same work force for providing the Federal Government with such services as the source uses for providing such services to the general public;
(6) Services of a type offered and sold competitively in
substantial quantities in the commercial marketplace based on
established catalog or market prices for specific tasks performed
under standard commercial terms and conditions. This does not
include services that are sold based on hourly rates without an
established catalog or market price for a specific service
performed;
(7) Any item, combination of items, or service referred to in
subparagraphs (c)(1) through (c)(6), notwithstanding the fact that
the item, combination of items, or service is transferred between or
among separate divisions, subsidiaries, or affiliates of a
Contractor; or
(8) A nondevelopmental item, if the procuring agency determines the item was developed exclusively at private expense and sold in substantial quantities, on a competitive basis, to multiple State
and local Governments.
(d) Component means any item supplied to the Federal Government
as part of an end item or of another component.
(e) Nondevelopmental item means--
(1) Any previously developed item of supply used exclusively for governmental purposes by a Federal agency, a State or local government, or a foreign government with which the United States has a mutual defense cooperation agreement;
(2) Any item described in paragraph (e)(1) of this definition
that requires only minor modification or modifications of a type
customarily available in the commercial marketplace in order to meet
the requirements of the procuring department or agency; or
(3) Any item of supply being produced that does not meet the
requirements of paragraph (e)(1) or (e)(2) solely because the item
is not yet in use.
* * * * *
(End of clause)
52.203-4 [Amended]
77. Section 52.203-4 is amended in the first sentence of the
introductory text by removing ``(b)(5)'' and inserting ``(b)(6)'' in
its place.
78. Section 52.203-6 is amended by revising the date of the clause
and adding an Alternate I following paragraph (c) to read as follows:
52.203-6 Restrictions on Subcontractor Sales to the Government.
Restrictions on Subcontractor Sales to the Government (Oct. 1995)
* * * * *
Alternate I (OCT. 1995). As prescribed in 3.503-2, substitute
the following paragraph in place of paragraph (b) of the basic
clause:
(b) The prohibition in paragraph (a) of this clause does not
preclude the Contractor from asserting rights that are otherwise
authorized by law or regulation. For acquisitions of commercial
items, the prohibition in paragraph (a) applies only to the extent
that any agreement restricting sales by subcontractors results in
the Federal Government being treated differently from any other
prospective purchaser for the sale of the commercial item(s).
52.210-1 through 52.210-7 [Redesignated]
79. Sections 52.210-1 through 52.210-7 are redesignated as 52.211-1
through 52.211-7.
52.212-1 through 52.212-11 [Redesignated]
80. Sections 52.212-1 through 52.212-11 are redesignated as 52.211-
8 through 52.211-18.
52.212-12 through 52.212-15 [Redesignated]
81. Sections 52.212-12 through 52.212-15 are redesignated as
52.242-14 through 52.242-17, respectively.
52.212-1 through 52.212-5 [Added]
82. Part 52 is amended by adding new sections 52.212-1 through
52.212-5 to read as follows:
Sec.
52.212-1 Instructions to Offerors-Commercial Items.
52.212-2 Evaluation-Commercial Items.
52.212-3 Offeror Representations and Certifications-Commercial
Items.
52.212-4 Contract Terms and Conditions-Commercial Items.
52.212-5 Contract Terms and Conditions Required to Implement
Statutes or Executive Orders-Commercial Items.
52.212-1 Instructions to Offerors--Commercial Items.
As prescribed in 12.301(b)(1), insert the following provision:
Instructions to Offerors--Commercial Items (Oct. 1995)
(a) Standard industrial classification (SIC) code and small
business size standard. The SIC code and small business size
standard for this acquisition appear in Block 10 of the solicitation
cover sheet (SF 1449). However, the small business size standard for
a concern which submits an offer in its own name, but which proposes
to furnish an item which it did not itself manufacture, is 500
employees.
(b) Submission of offers. Submit signed and dated offers to the
office specified in this solicitation at or before the exact time
specified in this solicitation. Offers may be submitted on the SF
1449, letterhead stationery, or as otherwise specified in the
solicitation. As a minimum, offers must show----
(1) The solicitation number;
(2) The time specified in the solicitation for receipt of
offers;
(3) The name, address, and telephone number of the offeror;
(4) A technical description of the items being offered in
sufficient detail to evaluate compliance with the requirements in
the solicitation. This may include product literature, or other
documents, if necessary;
(5) Terms of any express warranty;
(6) Price and any discount terms;
(7) ``Remit to'' address, if different than mailing address;
(8) A completed copy of the representations and certifications
at FAR 52.212-3;
(9) Acknowledgment of Solicitation Amendments;
(10) Past performance information, when included as an
evaluation factor, to include recent and relevant contracts for the
same or similar items and other references (including contract
numbers, points of contact with telephone numbers and other relevant
information); and
(11) If the offer is not submitted on the SF 1449, include a
statement specifying the extent of agreement with all terms,
conditions, and provisions included in the solicitation. Offers that
fail to furnish required representations or information, or reject
the terms and conditions of the solicitation may be excluded from
consideration.
(c) Period for acceptance of offers. The offeror agrees to hold
the prices in its offer firm for 30 calendar days from the date
specified for receipt of offers, unless another time period is
specified in an addendum to the solicitation.
(d) Product samples. When required by the solicitation, product
samples shall be submitted at or prior to the time specified for
receipt of offers. Unless otherwise specified in this solicitation,
these samples shall be submitted at no expense to the Government,
and returned at the sender's request and expense, unless they are
destroyed during preaward testing.
(e) Multiple offers. Offerors are encouraged to submit multiple
offers presenting alternative terms and conditions or commercial
items for satisfying the requirements of this solicitation. Each
offer submitted will be evaluated separately.
(f) Late offers. Offers or modifications of offers received at
the address specified for the receipt of offers after the exact time
specified for receipt of offers will not be considered.
(g) Contract award (not applicable to Invitation for Bids). The
Government intends to evaluate offers and award a contract without
discussions with offerors. Therefore, the offeror's initial offer
should contain the offeror's best terms from a price and technical
standpoint. However, the Government reserves the right to conduct
discussions if later determined by the Contracting Officer to be
necessary. The Government may reject any or all offers if such
action is in the public interest; accept other than the lowest
offer; and waive informalities and minor irregularities in offers
received.
(h) Multiple awards. The Government may accept any item or group
of items of an offer, unless the offeror qualifies the offer by
specific limitations. Unless otherwise provided in the Schedule,
offers may not be submitted for quantities less than those
specified. The Government reserves the right to make an award on any
item for a quantity less than the quantity offered, at the unit
prices offered, unless the offeror specifies otherwise in the offer.
(i) Availability of requirements documents cited in the
solicitation.
(1) The Index of Federal Specifications, Standards and
Commercial Item Descriptions and the documents listed in it may be
obtained from the General Services Administration, Federal Supply
Service Bureau, Specifications Section, Suite 8100, 470 L'Enfant
Plaza, SW., Washington, DC 20407 ((202) 755-0325/0326).
(2) The DOD Index of Specifications and Standards (DODISS) and documents listed in it may be obtained from the Standardization
Documents Desk, Building 4D, 700 Robbins Avenue, Philadelphia, PA
19111-5094 (telephone (215) 697-2569).
(i) Automatic distribution may be obtained on a subscription basis.
(ii) Individual documents may be ordered from the Telespecs ordering system by touch-tone telephone. A customer number is required to use this service and can be obtained from the
Standardization Documents Order Desk or the Special Assistance Desk
(telephone (610) 607-2667/2179).
(3) Nongovernment (voluntary) standards must be obtained from
the organization responsible for their preparation, publication or
maintenance.
(End of provision)
52.212-2 Evaluation--Commercial Items.
As prescribed in 12.301(c), the Contracting Officer may insert a
provision substantially as follows:
Evaluation--Commercial Items (Oct. 1995)
(a) The Government will award a contract resulting from this
solicitation to the responsible offeror whose offer conforming to
the solicitation will be most advantageous to the Government, price
and other factors considered. The following factors shall be used to
evaluate offers:
----------------------------------------------------------------------
----------------------------------------------------------------------
(Contracting Officer shall insert the significant evaluation
factors, such as (i) technical capability of the item offered to
meet the Government requirement; (ii) price; (iii) past performance
(see FAR 15.605) and include them in the relative order of
importance of the evaluation factors, such as in descending order of
importance.)
Technical and past performance, when combined, are ------------
-------- (Contracting Officer state, in accordance with FAR 15.605,
the relative importance of all other evaluation factors, when
combined, when compared to price.)
(b) Options. The Government will evaluate offers for award
purposes by adding the total price for all options to the total
price for the basic requirement. The Government may determine that
an offer is unacceptable if the option prices are significantly
unbalanced. Evaluation of options shall not obligate the Government
to exercise the option(s).
(c) A written notice of award or acceptance of an offer, mailed
or otherwise furnished to the successful offeror within the time for
acceptance specified in the offer, shall result in a binding
contract without further action by either party. Before the offer's
specified expiration time, the Government may accept an offer (or
part of an offer), whether or not there are negotiations after its
receipt, unless a written notice of withdrawal is received before
award.
(End of Provision)
52.212-3 Offeror Representations and Certifications Commercial Items.
As prescribed in 12.301(b)(2), insert the following provision:
Offeror Representations and Certifications--Commercial Items (Oct.
1995)
(a) Definitions. As used in this provision:
Emerging small business means a small business concern whose
size is no greater than 50 percent of the numerical size standard
for the standard industrial classification code designated.
Small business concern means a concern, including its
affiliates, that is independently owned and operated, not dominant
in the field of operation in which it is bidding on Government
contracts, and qualified as a small business under the criteria in
13 CFR Part 121 and size standards in this solicitation.
Small disadvantaged business concern means a small business
concern that--
(1) Is at least 51 percent unconditionally owned by one or more
individuals who are both socially and economically disadvantaged, or
a publicly owned business, having at least 51 percent of its stock
unconditionally owned by one or more socially and economically
disadvantaged individuals, and
(2) Has its management and daily business controlled by one or
more such individuals. This term also means a small business concern
that is at least 51 percent unconditionally owned by an economically
disadvantaged Indian tribe or Native Hawaiian organization, or a
publicly owned business having at least 51 percent of its stock
unconditionally owned by one or more of these entities, which has
its management and daily business controlled by members of an
economically disadvantaged Indian tribe or Native Hawaiian
organization and which meets the requirements of 13 CFR Part 124.
Women-owned small business concern means a small business
concern--
(a) Which is at least 51 percent owned by one or more women or,
in the case of any publicly owned business, at least 51 percent of
the stock of which is owned by one or more women; and
(b) Whose management and daily business operations are
controlled by one or more women.
Women-owned business concern means a concern which is at least
51 percent owned by one or more women; or in the case of any
publicly owned business, at least 51 percent of the stock of which
is owned by one or more women; and whose management and daily
business operations are controlled by one or more women.
(b) Taxpayer identification number (TIN) (26 U.S.C. 6050M). (1)
Taxpayer Identification Number (TIN).
{time} TIN: ________________.
{time} TIN has been applied for.
{time} TIN is not required because:
{time} Offeror is a nonresident alien, foreign corporation, or
foreign partnership that does not have income effectively connected
with the conduct of a trade or business in the U.S. and does not
have an office or place of business or a fiscal paying agent in the
U.S.;
{time} Offeror is an agency or instrumentality of a foreign
government;
{time} Offeror is an agency or instrumentality of a Federal,
state, or local government;
{time} Other. State basis. ________________
(2) Corporate Status.
{time} Corporation providing medical and health care services,
or engaged in the billing and collecting of payments for such
services;
{time} Other corporate entity;
{time} Not a corporate entity:
{time} Sole proprietorship
{time} Partnership
{time} Hospital or extended care facility described in 26 CFR
501(c)(3) that is exempt from taxation under 26 CFR 501(a).
(3) Common Parent.
{time} Offeror is not owned or controlled by a common parent.
Name and TIN of common parent:
Name-------------------------------------------------------------------
TIN--------------------------------------------------------------------
(c) Offerors must complete the following representations when
the resulting contract 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. Check all that
apply.
(1) Small business concern. The offeror represents as part of
its offer that it {time} is, {time} is not a small business
concern.
(2) Small disadvantaged business concern. The offeror represents and certifies that it {time} is, {time} is not a small
disadvantaged business concern.
(3) Women-owned small business concern. The offeror represents that it {time} is, {time} is not a women-owned small business
concern.
Note: Complete paragraphs (c)(4) and (c)(5) only if this
solicitation is expected to exceed the simplified acquisition
threshold.
(4) Women-owned business concern. The offeror represents that it {time} is, {time} is not, a women-owned business concern.
(5) Tie bid priority for labor surplus area concerns. If this is
an invitation for bid, small business offerors may identify the
labor surplus areas in which costs to be incurred on account of
manufacturing or production (by offeror or first-tier subcontractors) amount to more than 50 percent of the contract price:
----------------------------------------------------------------------
(6) Small Business Size for the Small Business Competitiveness
Demonstration Program and for the Targeted Industry Categories under
the Small Business Competitiveness Demonstration Program. [Complete
only if the offeror has certified itself to be a small business
concern under the size standards for this solicitation.]
(i) (Complete only for solicitations indicated in an addendum as being set-aside for emerging small businesses in one of the four designated industry groups (DIGs).) The offeror represents as part
of its offer that it {time} is, {time} is not an emerging small
business.
(ii) (Complete only for solicitations indicated in an addendum as being for one of the targeted industry categories (TICs) or four designated industry groups (DIGs).) Offeror represents and certifies
as follows:
(A) Offeror's number of employees for the past 12 months (check the Employees column if size standard stated in the solicitation is expressed in terms of number of employees); or
(B) Offeror's average annual gross revenue for the last 3 fiscal years (check the Average Annual Gross Number of Revenues column if size standard stated in the solicitation is expressed in terms of annual receipts)
(Check one of the following):
Average Annual Gross
Number of Employees Revenues
____ 50 or fewer ____ $1 million or less
____ 51-100 ____ $1,000,001-$2 million
____ 101-250 ____ $2,000,001-$3.5 million
____ 251-500 ____ $3,500,001-$5 million
____ 501-750 ____ $5,000,001-$10 million
____ 751-1,000 ____ $10,000,001-$17 million
____ Over 1,000 ____ Over $17 million
(d) Certifications and representations required to implement
provisions of Executive Order 11246--
(1) Certification of non-segregated facilities. (Applies only if
the contract amount is expected to exceed $10,000)--
By submission of this offer, the offeror certifies that it does
not and will not maintain or provide for its employees, any
facilities that are segregated on the basis of race, color,
religion, or national origin because of habit, local custom, or
otherwise and that it does not and will not permit its employees to
perform their services at any location where segregated facilities
are maintained. The offeror agrees that a breach of this
certification is a violation of the Equal Opportunity clause in the
contract.
(2) Previous Contracts and Compliance. The offeror represents
that--
(i) It {time} has, {time} has not, participated in a previous contract or subcontract subject either to the Equal Opportunity
clause of this solicitation, the clause originally contained in
Section 310 of Executive Order 10925, or the clause contained in
Section 201 of Executive Order 11114; and
(ii) It {time} has, {time} has not, filed all required
compliance reports.
(3) Affirmative Action Compliance. The offeror represents that--
(i) It {time} has developed and has on file, {time} has not developed and does not have on file, at each establishment,
affirmative action programs required by rules and regulations of the
Secretary of Labor (41 CFR Subparts 60-1 and 60-2), or
(ii) It {time} has not previously had contracts subject to the written affirmative action programs requirement of the rules and
regulations of the Secretary of Labor.
(e) Certification Regarding Payments to Influence Federal
Transactions (31 U.S.C. 1352). (Applies only if the contract is
expected to exceed $100,000.) By submission of its offer, the
offeror certifies to the best of its knowledge and belief that no
Federal appropriated funds have been paid or will be paid to any
person for influencing or attempting to influence an officer or
employee of any agency, a Member of Congress, an officer or employee
of Congress or an employee of a Member of Congress on his or her
behalf in connection with the award of any resultant contract.
(f) Buy American Act--Trade Agreements--Balance of Payments
Program Certificate. (Applies only if FAR clause 52.225-9, Buy
American Act--Trade Agreement--Balance of Payments Program, is
included in this solicitation.)
(1) The offeror hereby certifies that each end product, except
those listed in paragraph (f)(2) of this provision, is a domestic
end product (as defined in the clause entitled ``Buy American Act--
Trade Agreements Balance of Payments Program'') and that components
of unknown origin have been considered to have been mined, produced,
or manufactured outside the United States, a designated country, a
North American Free Trade Agreement (NAFTA) country, or a Caribbean
Basin country, as defined in section 25.401 of the Federal
Acquisition Regulation.
(2) Excluded End Products:
Line item No. Country of origin
__________________________________ __________
__________________________________ __________
(List as necessary)
(3) Offers will be evaluated by giving certain preferences to
domestic end products, designated country end products, NAFTA
country end products, and Caribbean Basin country end products over
other end products. In order to obtain these preferences in the
evaluation of each excluded end product listed in paragraph (f)(2)
of this provision, offerors must identify and certify below those
excluded end products that are designated or NAFTA country end
products, or Caribbean Basin country end products. Products that are
not identified and certified below will not be deemed designated
country end products, NAFTA country end products, or Caribbean Basin
country end products. Offerors must certify by inserting the
applicable line item numbers in the following:
(i) The offeror certifies that the following supplies qualify as ``designated or NAFTA country end products'' as those terms are
defined in the clause entitled ``Buy American Act--Trade Agreements--Balance of Payments Program:''
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(Insert line item numbers)
(ii) The offeror certifies that the following supplies qualify as ``Caribbean Basin country end products'' as that term is defined in the clause entitled ``Buy American Act--Trade Agreements--Balance of Payments Program'':
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(Insert line item numbers)
(4) Offers will be evaluated in accordance with FAR Part 25.
(g) Buy American Act--North American Free Trade Agreement
(NAFTA) Implementation Act--Balance of Payments Program Certificate.
(Applies only if FAR clause 52.22521, Buy American Act--North
American Free Trade Agreement (NAFTA) Implementation Act--Balance of Payments Program, is included in this solicitation.)
(1) The offeror hereby certifies that each end product, except
those listed in paragraph (g)(2) of this provision, is a domestic
end product (as defined in the clause entitled ``Buy American Act--
North American Free Trade Agreement (NAFTA) Implementation Act-
Balance of Payments Program'' and that components of unknown origin
have been considered to have been mined, produced, or manufactured
outside the United States.
(2) Excluded End Products:
Line item No. Country of origin
___________________________________ __________
___________________________________ __________
(List as necessary )
(3) Offers will be evaluated by giving certain preferences to
domestic end products or NAFTA country end products over other end
products. In order to obtain these preferences in the evaluation of
each excluded end product listed in paragraph (g)(2) of this
provision, offerors must identify and certify below those excluded
end products that are NAFTA country end products. Products that are
not identified and certified below will not be deemed NAFTA country
end products. Offerors must certify by inserting the applicable line
item numbers in the following:
The offeror certifies that the following supplies qualify as
``NAFTA country end products'' as that term is defined in the clause
entitled ``Buy American Act--North American Free Trade Agreement
Implementation Act--Balance of Payments Program:''
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(Insert line item numbers)
(4) Offers will be evaluated in accordance with FAR Part 25.
(h) Certification Regarding Debarment, Suspension or
Ineligibility for Award (Executive Order 12549). The offeror
certifies, to the best of its knowledge and belief, that--
(1) The offeror and/or any of its principals {time} are,
{time} are not presently debarred, suspended, proposed for
debarment, or declared ineligible for the award of contracts by any
Federal agency, and
(2) {time} Have, {time} have not, within a three-year period
preceding this offer, been convicted of or had a civil judgment
rendered against them for: commission of fraud or a criminal offense
in connection with obtaining, attempting to obtain, or performing a
Federal, state or local government contract or subcontract;
violation of Federal or state antitrust statutes relating to the
submission of offers; or commission of embezzlement, theft, forgery,
bribery, falsification or destruction of records, making false
statements, or receiving stolen property; and {time} are, {time} are not presently indicted for, or otherwise criminally or civilly charged by a Government entity with, commission of any of these offenses.
(i) Procurement Integrity Certification (41 U.S.C. 423).
(Applies only if the contract is expected to exceed $100,000.)
I, the undersigned, am the officer or employee responsible for
the preparation of this offer. I certify, to the best of my
knowledge and belief, that either--
{time} I have no information, or
{time} I have disclosed information to the Contracting Officer
concerning a violation or possible violation of subsection (a), (b),
(d) or (f) of 41 U.S.C. 423, Procurement Integrity, or its
implementing regulations that may have occurred during the conduct
of this procurement.
----------------------------------------------------------------------
Signature of the officer or employee responsible for the offer and
date.
(End of Provision)
52.212-4 Contract Terms and Conditions--Commercial Items.
As prescribed in 12.301(b)(3), insert the following clause:
Contract Terms and Conditions--Commercial Items (Oct 1995)
(a) Inspection/Acceptance. The Contractor shall only tender for
acceptance those items that conform to the requirements of this
contract. The Government reserves the right to inspect or test any
supplies or services that have been tendered for acceptance. The
Government may require repair or replacement of nonconforming
supplies or reperformance of nonconforming services at no increase
in contract price. The Government must exercise its postacceptance
rights (1) within a reasonable time after the defect was discovered
or should have been discovered; and (2) before any substantial
change occurs in the condition of the item, unless the change is due
to the defect in the item.
(b) Assignment. The Contractor or its assignee's rights to be
paid amounts due as a result of performance of this contract, may be
assigned to a bank, trust company, or other financing institution,
including any Federal lending agency in accordance with the
Assignment of Claims Act (31 U.S.C. 3727).
(c) Changes. Changes in the terms and conditions of this
contract may be made only by written agreement of the parties.
(d) Disputes. This contract is subject to the Contract Disputes
Act of 1978, as amended (41 U.S.C. 601-613). Failure of the parties
to this contract to reach agreement on any request for equitable
adjustment, claim, appeal or action arising under or relating to
this contract shall be a dispute to be resolved in accordance with
the clause at FAR 52.233-1, Disputes, which is incorporated herein
by reference. The Contractor shall proceed diligently with
performance of this contract, pending final resolution of any
dispute arising under the contract.
(e) Definitions. The clause at FAR 52.202-1, Definitions, is
incorporated herein by reference.
(f) Excusable delays. The Contractor shall be liable for default
unless nonperformance is caused by an occurrence beyond the
reasonable control of the Contractor and without its fault or
negligence such as, acts of God or the public enemy, acts of the
Government in either its sovereign or contractual capacity, fires,
floods, epidemics, quarantine restrictions, strikes, unusually
severe weather, and delays of common carriers. The Contractor shall
notify the Contracting Officer in writing as soon as it is
reasonably possible after the commencement of any excusable delay,
setting forth the full particulars in connection therewith, shall
remedy such occurrence with all reasonable dispatch, and shall
promptly give written notice to the Contracting Officer of the
cessation of such occurrence.
(g) Invoice. The Contractor shall submit an original invoice and
three copies (or electronic invoice, if authorized,) to the address
designated in the contract to receive invoices. An invoice must
include--
(1) Name and address of the Contractor;
(2) Invoice date;
(3) Contract number, contract line item number and, if
applicable, the order number;
(4) Description, quantity, unit of measure, unit price and
extended price of the items delivered;
(5) Shipping number and date of shipment including the bill of
lading number and weight of shipment if shipped on Government bill
of lading;
(6) Terms of any prompt payment discount offered;
(7) Name and address of official to whom payment is to be sent; and
(8) Name, title, and phone number of person to be notified in
event of defective invoice.
Invoices will be handled in accordance with the Prompt Payment
Act (31 U.S.C. 3903) and Office of Management and Budget (OMB)
Circular A-125, Prompt Payment.
(h) Patent indemnity. The Contractor shall indemnify the
Government and its officers, employees and agents against liability,
including costs, for actual or alleged direct or contributory
infringement of, or inducement to infringe, any United States or
foreign patent, trademark or copyright, arising out of the
performance of this contract, provided the Contractor is reasonably
notified of such claims and proceedings.
(i) Payment. Payment shall be made for items accepted by the
Government that have been delivered to the delivery destinations set
forth in this contract. The Government will make payment in
accordance with the Prompt Payment Act (31 U.S.C. 3903) and Office
of Management and Budget (OMB) Circular A-125, Prompt Payment.
Payments under this contract may be made by the Government either by
check, electronic funds transfer, or the Automated Clearing House,
at the option of the Government.
In connection with any discount offered for early payment, time
shall be computed from the date of the invoice. For the purpose of
computing the discount earned, payment shall be considered to have
been made on the date which appears on the payment check or the date
on which an electronic funds transfer was made.
(j) Risk of loss. Unless the contract specifically provides
otherwise, risk of loss or damage to the supplies provided under
this contract shall remain with the Contractor until, and shall pass
to the Government upon:
(1) Delivery of the supplies to a carrier, if transportation is
f.o.b. origin; or
(2) Delivery of the supplies to the Government at the
destination specified in the contract, if transportation is f.o.b.
destination.
(k) Taxes. The contract price includes all applicable Federal,
State, and local taxes and duties.
(l) Termination for the Government's convenience. The Government
reserves the right to terminate this contract, or any part hereof,
for its sole convenience. In the event of such termination, the
Contractor shall immediately stop all work hereunder and shall
immediately cause any and all of its suppliers and subcontractors to
cease work. Subject to the terms of this contract, the Contractor
shall be paid a percentage of the contract price reflecting the
percentage of the work performed prior to the notice of termination,
plus reasonable charges the Contractor can demonstrate to the
satisfaction of the Government using its standard record keeping
system, have resulted from the termination. The Contractor shall not
be required to comply with the cost accounting standards or contract
cost principles for this purpose. This paragraph does not give the
Government any right to audit the Contractor's records. The
Contractor shall not be paid for any work performed or costs
incurred which reasonably could have been avoided.
(m) Termination for cause. The Government may terminate this
contract, or any part hereof, for cause in the event of any default
by the Contractor, or if the Contractor fails to comply with any
contract terms and conditions, or fails to provide the Government,
upon request, with adequate assurances of future performance. In the
event of termination for cause, the Government shall not be liable
to the Contractor for any amount for supplies or services not
accepted, and the Contractor shall be liable to the Government for
any and all rights and remedies provided by law. If it is determined
that the Government improperly terminated this contract for default,
such termination shall be deemed a termination for convenience.
(n) Title. Unless specified elsewhere in this contract, title to
items furnished under this contract shall pass to the Government
upon acceptance, regardless of when or where the Government takes
physical possession.
(o) Warranty. The Contractor warrants and implies that the items
delivered hereunder are merchantable and fit for use for the
particular purpose described in this contract.
(p) Limitation of liability. Except as otherwise provided by an
express or implied warranty, the Contractor will not be liable to
the Government for consequential damages resulting from any defect
or deficiencies in accepted items.
(q) Other compliances. The Contractor shall comply with all
applicable Federal, State and local laws, executive orders, rules
and regulations applicable to its performance under this contract.
(r) Compliance with laws unique to Government contracts. The
Contractor agrees to comply with 31 U.S.C. 1352 relating to
limitations on the use of appropriated funds to influence certain
Federal contracts; 18 U.S.C. 431 relating to officials not to
benefit; 40 U.S.C 327, et seq., Contract Work Hours and Safety
Standards Act; 41 U.S.C. 51-58, Anti-Kickback Act of 1986; 41 U.S.C.
251 related to whistle blower protections; and 49 U.S.C 40118, Fly
American.
(s) Order of precedence. Any inconsistencies in this
solicitation or contract shall be resolved by giving precedence in
the following order: (1) the schedule of supplies/services; (2) the
Assignments, Disputes, Payments, Invoice, Other Compliances, and
Compliance with Laws Unique to Government Contracts paragraphs of
this clause; (3) the clause at 52.212-5; (4) addenda to this
solicitation or contract, including any license agreements for
computer software; (5) solicitation provisions if this is a
solicitation; (6) other paragraphs of this clause; (7) the Standard
Form 1449; (8) other documents, exhibits, and attachments; and (9)
the specification.
52.212-5 Contract Terms and Conditions Required to Implement Statutes
or Executive Orders--Commercial Items.
As prescribed in 12.301(b)(4), insert the following clause:
Contract Terms and Conditions Required to Implement Statutes or
Executive Orders--Commercial Items (Oct 1995)
(a) The Contractor agrees to comply with the following FAR
clauses, which are incorporated in this contract by reference, to
implement provisions of law or Executive orders applicable to
acquisitions of commercial items:
(1) 52.222-3, Convict Labor (E.O. 11755); and
(2) 52.233-3, Protest After Award (31 U.S.C 3553 and 40 U.S.C.
759).
(b) The Contractor agrees to comply with the FAR and FIRMR
clauses in this paragraph (b) which the contracting officer has
indicated as being incorporated in this contract by reference to
implement provisions of law or executive orders applicable to
acquisitions of commercial items or components:
(Contracting Officer shall check as appropriate.)
________ (1) 52.203-6, Restrictions on Subcontractor Sales to
the Government, with Alternate I (41 U.S.C. 253g and 10 U.S.C.
2402).
________ (2) 52.203-10, Price or Fee Adjustment for Illegal or
Improper Activity (41 U.S.C. 423).
________ (3) 52.219-8, Utilization of Small Business Concerns
and Small Disadvantaged Business Concerns (15 U.S.C. 637 (d) (2) and
(3));
________ (4) 52.219-9, Small, Small Disadvantaged and Women-
Owned Small Business Subcontracting Plan (15 U.S.C. 637 (d)(4));
________ (5) 52.219-14, Limitation on Subcontracting (15 U.S.C.
637(a)(14)).
________ (6) 52.222-26, Equal Opportunity (E.O. 11246).
________ (7) 52.222-35, Affirmative Action for Special Disabled
and Vietnam Era Veterans (38 U.S.C. 4212).
________ (8) 52.222-36, Affirmative Action for Handicapped
Workers (29 U.S.C. 793).
________ (9) 52.222-37, Employment Reports on Special Disabled
Veterans and Veterans of the Vietnam Era (38 U.S.C. 4212).
________ (10) 52.225-3, Buy American Act--Supplies (41 U.S.C.
10).
________ (11) 52.225-9, Buy American Act--Trade Agreements Act--
Balance of Payments Program (41 U.S.C. 10, 19 U.S.C. 2501-2582).
________ (12) 52.225-17, Buy American Act--Supplies Under
European Community Sanctions for End Products (E.O. 12849).
________ (13) 52.225-18, European Community Sanctions for End
Products (E.O. 12849).
________ (14) 52.225-19, European Community Sanctions for
Services (E.O. 12849).
________ (15) 52.225-21, Buy American Act--North American Free
Trade Agreement Implementation Act--Balance of Payments Program (41
U.S.C 10, Pub. L. 103-187).
________ (16) 52.247-64, Preference for Privately Owned U.S.-
Flag Commercial Vessels (46 U.S.C. 1241).
________ (17) 201-39.5202-3, Procurement Authority (FIRMR).
(This acquisition is being conducted under ______________
delegation of GSA's exclusive procurement authority for FIP
resources. The specific GSA DPA case number is ____________).
(c) The Contractor agrees to comply with the FAR clauses in this
paragraph (c), applicable to commercial services, which the
Contracting Officer has indicated as being incorporated in this
contract by reference to implement provisions of law or executive
orders applicable to acquisitions of commercial items or components:
(Contracting Officer check as appropriate.)
________ (1) 52.222-41, Service Contract Act of 1965, As amended
(41 U.S.C. 351, et seq.).
________ (2) 52.222-42, Statement of Equivalent Rates for
Federal Hires (29 U.S.C. 206 and 41 U.S.C. 351, et seq.).
________ (3) 52.222-43, Fair Labor Standards Act and Service
Contract Act--Price Adjustment (Multiple Year and Option Contracts)
(29 U.S.C. 206 and 41 U.S.C. 351, et seq.).
________ (4) 52.222-44, Fair Labor Standards Act and Service
Contract Act--Price Adjustment (29 U.S.C. 206 and 41 U.S.C. 351, et
seq.).
________ (5) 52.222-47, SCA Minimum Wages and Fringe Benefits
Applicable to Successor Contract Pursuant to Predecessor Contractor
Collective Bargaining Agreement (CBA) (41 U.S.C. 351, et seq.).
(d) Comptroller General Examination of Record. The Contractor
agrees to comply with the provisions of this paragraph (d) if this
contract was awarded using other than sealed bid, is in excess of
the simplified acquisition threshold, and does not contain the
clause at 52.215-2, Audit and Records--Negotiation.
(1) The Comptroller General of the United States, or an
authorized representative of the Comptroller General, shall have
access to and right to examine any of the Contractor's directly
pertinent records involving transactions related to this contract.
(2) The Contractor shall make available at its offices at all
reasonable times the records, materials, and other evidence for
examination, audit, or reproduction, until 3 years after final
payment under this contract or for any shorter period specified in
FAR Subpart 4.7, Contractor Records Retention, of the other clauses
of this contract. If this contract is completely or partially
terminated, the records relating to the work terminated shall be
made available for 3 years after any resulting final termination
settlement. Records relating to appeals under the disputes clause or
to litigation or the settlement of claims arising under or relating
to this contract shall be made available until such appeals,
litigation, or claims are finally resolved.
(3) As used in this clause, records include books, documents,
accounting procedures and practices, and other data, regardless of
type and regardless of form. This does not require the Contractor to
create or maintain any record that the Contractor does not maintain
in the ordinary course of business or pursuant to a provision of
law.
(e) Notwithstanding the requirements of the clauses in
paragraphs (a), (b), (c) or (d) of this clause, the Contractor is
not required to include any FAR clause, other than those listed
below (and as may be required by an addenda to this paragraph to
establish the reasonableness of prices under Part 15), in a
subcontract for commercial items or commercial components--
(1) 52.222-26, Equal Opportunity (E.O. 11246);
(2) 52.222-35, Affirmative Action for Special Disabled and
Vietnam Era Veterans (38 U.S.C. 2012(a)); and
(3) 52.222-36, Affirmative Action for Handicapped Workers (29
U.S.C. 793).
(4) 52.247-64, Preference for Privately Owned U.S.-Flagged
Commercial Vessels (46 U.S.C. 1241) (flow down not required for
subcontracts awarded beginning May 1, 1996).
(End of clause)
83. In the list of newly designated sections below, for each clause
or provision indicated in the left column, remove the reference listed
in the middle column and insert the reference listed in the right
column:
------------------------------------------------------------------------
Clause/provision Remove Insert
------------------------------------------------------------------------
52.211-1.................... 10.011(a) 11.204(a)*
52.211-2.................... 10.011(b) 11.204(b)*
52.211-3.................... 10.011(c) 11.204(c)*
52.211-4.................... 10.011(d) 11.204(d)*
52.211-5.................... 10.011(e) 11.302(a)*
52.211-6.................... 10.011(f) 11.302(b)*
52.211-7.................... 10.011(g) 11.302(c)*
52.211-8.................... 12.104(a)(2) 11.404(a)(2)
52.211-9.................... 12.104(a)(3) 11.404(a)(3)
52.211-10................... 12.104(b) 11.404(b)
52.211-11................... 12.204(a) 11.504(a)
52.211-11................... 12.202 11.502(b)(SIC)
52.211-12................... 12.202 11.502(b)(SIC)
52.211-12................... 12.204(b) 11.504(b)
52.211-13................... 12.204(c) 11.504(c)
52.211-14................... 12.304(a) 11.604(a)
52.211-15................... 12.304(b) 11.604(b)
52.211-16................... 12.403(a) 11.703(a)
52.211-17................... 12.403(b) 11.703(b)
52.211-18................... 12.403(c) 11.703(c)
52.242-14................... 12.505(a) 42.1305(a)
52.242-15................... 12.505(b) 42.1305(b)
52.242-16................... 12.505(c) 42.1305(c)
52.242-17................... 12.505(d) 42.1305(d)
------------------------------------------------------------------------
* Corrected per SAF/AQC
84. Section 52.244-6 is added to read as follows:
52.244-6 Subcontracts for Commercial Items and Commercial Components.
As prescribed in 44.403, insert the following clause:
Subcontracts for Commercial Items and Commercial Components (Oct 1995)
(a) Definition.
Commercial item, as used in this clause, has the meaning
contained in the clause at 52.202-1, Definitions.
Subcontract, as used in this clause, includes a transfer of
commercial items between divisions, subsidiaries, or affiliates of
the Contractor or subcontractor at any tier.
(b) To the maximum extent practicable, the Contractor shall
incorporate, and require its subcontractors at all tiers to
incorporate, commercial items or nondevelopmental items as
components of items to be supplied under this contract.
(c) Notwithstanding any other clause of this contract, the
Contractor is not required to include any FAR provision or clause,
other than those listed below to the extent they are applicable and
as may be required to establish the reasonableness of prices under
Part 15, in a subcontract at any tier for commercial items or
commercial components:
(1) 52.222-26, Equal Opportunity (E.O. 11246);
(2) 52.222-35, Affirmative Action for Special Disabled and
Vietnam Era Veterans (38 U.S.C. 4212(a));
(3) 52.222-36, Affirmative Action for Handicapped Workers (29
U.S.C. 793); and
(4) 52.247-64, Preference for Privately Owned U.S.-Flagged
Commercial Vessels (46 U.S.C. 1241) (flow down not required for
subcontracts awarded beginning May 1, 1996).
(d) The Contractor shall include the terms of this clause,
including this paragraph (d), in subcontracts awarded under this
contract.
(End of clause)
52.246-11 [Amended]
85. & 86. Section 52.246-11 is amended in the introductory text by
removing ``46.202-3'' and inserting ``46.202-4'' in its place.
52.246-17 and 52.246-18 [Amended]
87. Sections 52.246-17 and 52.246-18 are amended by removing and
reserving Alternate I.
PART 53--FORMS
88. Section 53.212 is added to read as follows:
53.212 Acquisition of commercial items.
SF 1449 (OCT 1995), Solicitation/Contract/Order for Commercial
Items. SF 1449 is prescribed for use in solicitations and contracts for
commercial items. Agencies may prescribe additional detailed
instructions for use of the form.
89. Section 53.301-1449 is added to read as follows:
53.301-1449 (OCT 1995), Solicitation/Contract/Order for Commercial
Items
BILLING CODE 6820-EP-P
TR18SE95.002
ral Register: September 18, 1995 (Volume 60, Number 180)]
s and Regulations]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
48 CFR Part 3
[FAC 90-32; FAR Case 94-803; Item IV]
RIN 9000-AG16
Federal Acquisition Regulation; Whistleblower Protections for
Contractor Employees (Ethics) AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Technical amendment to final rule.
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SUMMARY: At 60 FR 37774, July 21, 1995, a final rule was issued
pursuant to the Federal Acquisition Streamlining Act of 1994, Public
Law 103-355 (the Act). The Federal Acquisition Regulatory Council is
now issuing an Applicability Date, in addition to the Effective Date,
of the regulation.
DATES: Effective Date: September 19, 1995.
Applicability Date: This regulation will apply to contracts in
existence as of September 19, 1995, for reprisals to Government
contractor employees occurring on or after that date. The remedy
provided by this regulation does not apply to contracts otherwise
covered by provisions of 10 U.S.C. 2409a.
FOR FURTHER INFORMATION CONTACT: Mr. Julius Rothlein, Ethics Team Leader, at (703) 697-4349 in reference to this FAR case.
SUPPLEMENTARY INFORMATION:
Background:
FAC 90-30, FAR case 94-803, implemented Sections 6005 and 6006 of the Act, Whistleblower Protections for Contractor Employees. These
protections are now virtually identical for contractors employed by
both DOD and civilian agencies.
The rule as originally published did not specifically discuss the
extent of retroactivity. The rule did not require a contract clause. To
clarify this, the FAR Council is establishing the extent of the rule's
retroactivity.
Some existing Department of Defense contracts contain a contractor
employee whistleblower clause, based on prior statute (10 U.S.C.
2409a). That law was narrower in scope and only applied to certain DoD
contracts.
Dated: September 7, 1995.
Edward C. Loeb,
Deputy Project Manager for the Implementation of the Federal
Acquisition Streamlining Act of 1994.
[Federal Register: September 18, 1995 (Volume 60, Number 180)]
[Rules and Regulations]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
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DEPARTMENT OF DEFENSE
48 CFR Parts 4, 5, 6, 9, 14, 15, 16, 17, 19, 20, 25, 26, 42, 44, 52
and 53
[FAC 90-32; FAR Case 94-780; Item V]
RIN 9000-AG37
Federal Acquisition Regulation; Small Business
AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
----------------------------------------------------------------------
SUMMARY: The Federal Acquisition Regulatory Council has agreed on a
final rule to amend the Federal Acquisition Regulation (FAR) to
implement sections 7101(a) and 7106 and to augment regulation
implementation of Section 10004 of the Federal Acquisition Streamlining
Act of 1994 (Pub. L. 103-355), dated October 13, 1994. Section 7101(a)
of FASA deletes sections 15(e) and (f) from the Small Business Act.
Those sections established the priority for award of set-asides and
provided the statutory basis for a procurement preference for concerns
located in Labor Surplus Areas (LSA). Based on this deletion, this rule
removes the LSA set-aside program and LSA subcontracting program from the FAR.
Section 7106 of FASA revises sections 8 and 15 of the Small
Business Act to accommodate a Governmentwide goal of 5 percent for
women-owned small businesses. This rule deletes existing, separate
coverage relating to women-owned businesses and revises existing
coverage to place women-owned small businesses on an equal footing with small disadvantaged businesses. In connection with this revision, the
Standard Forms 294 and 295 are revised and streamlined.
Section 10004 of FASA, which requires the collection of specified
data through the Federal Procurement Data System, is being implemented
by FAR case 94-701. This rule augments that coverage by providing a
solicitation provision to collect the information on women-owned
businesses as required by that FAR case.
This regulatory action was subject to Office of Management and
Budget review under Executive Order 12866, dated September 30, 1993.
EFFECTIVE DATE: October 1, 1995.
FOR FURTHER INFORMATION CONTACT: Ms. Victoria Moss, Small Business Team Leader, at (202) 501-4764 in reference to this FAR case. For general information, contact the FAR Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501-4755. Please cite FAC 90-32, FAR case 94-780.
SUPPLEMENTARY INFORMATION:
A. Background
The Federal Acquisition Streamlining Act of 1994 (the Act), Pub. L.
103-355, provides authorities that streamline the acquisition process
and minimize burdensome Government-unique requirements. The following
sections of the Federal Acquisition Streamlining Act are implemented by
this final rule:
Section 7101, Repeal of Certain Requirements, paragraph (a),
deletes sections 15(e) and (f) from the Small Business Act. These
sections established the priority for the award of contracts and
subcontracts in carrying out the set-aside programs.
Section 7106, Procurement Goals for Small Business Concerns Owned
by Women, establishes a Governmentwide goal for participation by women-owned small business concerns in prime and subcontracts and revises sections 8 and 15 of the Small Business Act to accommodate the goal.
Section 10004, Data Collection through the Federal Procurement Data
System, has been implemented in FAR case 94-701. This rule augments
that implementation.
These sections are implemented in this final rule by way of the
following substantial changes:
Elimination of the Labor Surplus Area (LSA) set-aside program;
Development of coverage giving women-owned small businesses equal
standing with small and small disadvantaged business in subcontracting
plans;
Issuance of an abbreviated provision to allow firms to represent
their status as small, small disadvantaged and/or women-owned small
business in one place;
Simplification and streamlining of the Standard Form (SF) 294,
Subcontract for Individual Contracts, and SF 295, Summary Subcontract
Report;
Inclusion of a solicitation provision collecting information on
women-owned businesses.
B. Regulatory Flexibility Act
The changes may have a significant economic impact on a substantial
number of small entities within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq., because the rule requires large
business contractors to submit and negotiate a subcontracting plan
addressing subcontracting with women-owned small businesses. The rule
further provides for imposition of liquidated damages on those firms
which do not make a good faith effort to comply with that
subcontracting plan. A Final Regulatory Flexibility Analysis (FRFA) has
been prepared and will be provided to the Chief Counsel for Advocacy
for the Small Business Administration. A copy of the FRFA may be
obtained from the FAR Secretariat.
C. Paperwork Reduction Act
The Paperwork Reduction Act (Pub. L. 96-511) applies because the
final rule contains information collection requirements. Requests for
approval of the revised information collection requirements concerning
OMB Control Numbers 9000-0006, Subcontracting Plans/Subcontracting
Report for Individual Contracts, and 9000-0007, Summary Subcontract
Report, were submitted to the Office of Management and Budget under 44 U.S.C. 3501, et seq. The information collections were approved through March 31, 1998. Public comments concerning this request were invited through a Federal Register notice published on January 6, 1995. Based on the comments received concerning these information collection
requirements, substantial changes were made to SFs 294 and 295. The
most significant changes include removal of blocks which collect
information not essential to program management, changing the reporting
frequency for the SF 295 from quarterly to semi-annually (DOD only),
removing signature blocks from the SF 294 (to facilitate electronic
submittal) and clarifying the instructions on the reverse.
D. Public Comments
On January 6, 1995, a proposed rule was published in the Federal
Register (60 FR 2302). In response to the notice of proposed
rulemaking, 114 public comments were received. In order to more
effectively implement those sections of the Act addressed in the
proposed rule, the proposed rule has been divided into distinguishable
segments. Section 4004, Small Business Reservation, has been added to
FAR Case 94-770. Section 7102, Contracting Program for Certain Small
Business Concerns, remains under consideration in light of the Supreme
Court's recent decision in Adarand Construction, Inc. v. Pena, 115 S.
Ct. 2097 (1995), which set forth a new standard for evaluating the
constitutionality of race-based affirmative action programs, and the
President's directive of July 19, 1995, that executive agencies review
such programs under that standard. Section 7102 has been assigned FAR
case 94-781. The comments of all respondents were considered in
developing this final rule. As a result, the following changes have
been made:
Requirements for acquisition plans were revised to include
consideration of women-owned small business concerns.
Use of the provision entitled ``Priority for Labor Surplus Area
Concerns'' was limited to sealed bids.
The Standard Forms 294 and 295 were simplified and streamlined.
List of Subjects in 48 CFR Parts 4, 5, 6, 9, 14, 15, 16, 17, 19, 20,
25, 26, 42, 44, 52 and 53
Government procurement.
Dated: September 7, 1995.
Edward C. Loeb,
Deputy Project Manager for the Implementation of the Federal
Acquisition Streamlining Act of 1994.
Therefore, 48 CFR Parts 4, 5, 6, 9, 14, 15, 16, 17, 19, 20, 25, 26,
42, 44, 52 and 53 are amended as set forth below:
1. The authority citation for 48 CFR Parts 4, 5, 6, 9, 14, 15, 16,
17, 19, 20, 25, 26, 42, 44, 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 is amended by revising paragraph (a)(2) to read as
follows:
4.602 Federal Procurement Data System.
(a) * * *
(2) A means of measuring and assessing the impact of Federal
contracting on the Nation's economy and the extent to which small,
small disadvantaged and women-owned small business concerns are sharing
in Federal contracts; and
* * * * *
3. Section 4.603 is added to read as follows:
4.603 Solicitation provision.
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 in Part 13, when the contract 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 5--PUBLICIZING CONTRACT ACTIONS
5.002 [Amended]
4. Section 5.002 is amended in paragraph (c) by removing ``labor
surplus area'' and inserting ``women-owned small business'' in its
place.
5.207 [Amended]
5. Section 5.207 is amended in paragraph (c)(2)(xiii) by removing
``and labor surplus area concerns'', and in paragraph (d) by removing
``or labor surplus area (LSA)''.
5.404-1 [Amended]
6. Section 5.404-1 is amended in paragraph (b)(6)(ii) by removing
``or LSA''.
7. Section 5.503 is amended by revising the second sentence of
paragraph (a) to read as follows:
5.503 Procedures.
(a) * * * Contracting officers shall give small, small
disadvantaged and women-owned small business concerns maximum
opportunity to participate in these acquisitions.
* * * * *
PART 6--COMPETITION REQUIREMENTS
8. Section 6.203 is revised to read as follows:
6.203 Set-asides for small business concerns.
(a) To fulfill the statutory requirements relating to small
business concerns, contracting officers may set aside solicitations to
allow only such business concerns to compete. This includes contract
actions conducted under the Small Business Innovation Research Program
established under Pub. L. 97-219.
(b) No separate justification or determination and findings is
required under this part to set aside a contract action for small
business concerns.
(c) Subpart 19.5 prescribes policies and procedures that shall be
followed with respect to set-asides.
6.501 [Amended]
9. Section 6.501 is amended in paragraph (c) by removing ``and
disadvantaged''.
PART 9--CONTRACTOR QUALIFICATIONS
10. Section 9.104-3 is amended by revising the last sentence of
paragraph (c) to read as follows:
9.104-3 Application of standards.
* * * * *
(c) * * * If the pending contract requires a subcontracting plan
pursuant to Subpart 19.7, Subcontracting with Small, Small
Disadvantaged Business and Women-Owned Small Business Concerns, the
contracting officer shall also consider the prospective contractor's
compliance with subcontracting plans under recent contracts.
* * * * *
PART 14--SEALED BIDDING
14.205-1 [Amended]
11. Section 14.205-1(e) is amended in the last sentence after the
word ``Disadvantaged'' by inserting ``and women-owned''.
14.205-4 [Amended]
12. Section 14.205-4 is amended in the fourth sentence of paragraph
(b) by inserting after the word ``small'' the phrase ``, small
disadvantaged and women-owned small''; and removing ``and labor surplus
areas (see 20.104(e) and (f))''; and in the last sentence of paragraph
(b) by removing ``parts 19 and 20'' and inserting in its place ``part
19''.
13. Section 14.206 is revised to read as follows:
14.206 Small business set-asides.
(See Part 19.)
14.408-6 [Amended]
14. Section 14.408-6 is amended by removing paragraph (a)(3) and
redesignating paragraph (a)(4) as paragraph (a)(3).
14.502 [Amended]
15. Section 14.502(b)(3) is amended by removing the text following
the word ``business'' and inserting in its place ``set-aside (see
19.502-2).''
PART 15--CONTRACTING BY NEGOTIATION
15.705 [Amended]
16. Section 15.705 is amended in paragraph (b) by removing
``business and labor surplus area'' and inserting in its place ``,
small disadvantaged and women-owned small business''.
15.706 [Amended]
17. Section 15.706 is amended at the end of the first sentence of
paragraph (b) by removing ``and disadvantaged business utilization''
and inserting in its place ``business''; and in paragraph (d)(4) by
removing ``labor surplus area'' and inserting in its place ``women-
owned small business''.
15.905-1 [Amended]
18. Section 15.905-1 is amended in the first sentence of paragraph
(c) by inserting after the word ``individuals,'' the phrase ``women-
owned small businesses,''; and removing the phrase ``labor surplus
areas,''.
PART 16--TYPES OF CONTRACTS
16.103 [Amended]
19. Section 16.103 is amended in paragraph (d)(3) by removing the
words ``or labor surplus area concerns''.
16.505 [Amended]
20. Section 16.505 is amended in paragraphs (d)(4) and (d)(5)(ii)
by removing the phrase ``or labor surplus area''.
PART 17--SPECIAL CONTRACTING METHODS
17.104-1 [Amended]
21. Section 17.104-1 is amended--
a. In paragraph (a) by removing the phrase ``or labor surplus
area'',
b. In paragraph (b) by removing the phrase ``or labor surplus
area''; and
c. In paragraph (b)(2) by removing ``(Partial labor surplus area
set-asides are only authorized for DOD activities at this time.)''.
PART 19--SMALL BUSINESS PROGRAMS
22. The heading of Part 19 is revised to read as set forth above.
* * * * *
23. Section 19.001 is amended by adding, in alphabetical order, the
definitions Labor surplus area, Labor surplus area concern, and Women-
owned small business concern to read as follows:
19.001 Definitions.
* * * * *
Labor surplus area means a geographical area identified by the
Department of Labor in accordance with 20 CFR Part 654, Subpart A, as
an area of concentrated unemployment or underemployment or an area of
labor surplus.
Labor surplus area concern means a concern that together with its
first-tier subcontractors will perform substantially in labor surplus
areas. Performance is substantially in labor surplus areas if the costs
incurred under the contract on account of manufacturing, production, or
performance of appropriate services in labor surplus areas exceed 50
percent of the contract price.
* * * * *
Women-owned small business concern means a small business concern--
(a) Which is at least 51 percent owned by one or more women; or, in
the case of any publicly owned business, at least 51 percent of the
stock of which is owned by one or more women; and
(b) Whose management and daily business operations are controlled
by one or more women.
24. Section 19.201 is amended by revising paragraphs (a), (b),
(c)(9), and (d) to read as follows:
19.201 General policy.
(a) It is the policy of the Government to provide maximum
practicable opportunities in its acquisitions to small business
concerns, small disadvantaged business concerns, and women-owned small
business concerns. Such concerns shall also have the maximum
practicable opportunity to participate as subcontractors in the
contracts awarded by any executive agency, consistent with efficient
contract performance. The Small Business Administration (SBA) counsels
and assists small business concerns and assists contracting personnel
to ensure that a fair proportion of contracts for supplies and services
is placed with small business.
(b) Heads of contracting activities are responsible for effectively
implementing the small business programs within their activities,
including achieving program goals. They are to ensure that contracting
and technical personnel maintain knowledge of small, small
disadvantaged and women-owned small business program requirements and
take all reasonable action to increase participation in their
activities' contracting processes by these businesses.
(c) * * *
(9) Make recommendations in accordance with agency regulations as to whether a particular acquisition should be awarded under Subpart
19.5 as a set-aside, or under Subpart 19.8 as a Section 8(a) award.
(d) Small Business Specialists shall be appointed and act in
accordance with agency regulations.
25. Section 19.202 is amended by revising the first sentence to
read as follows:
19.202 Specific policies.
In order to further the policy in 19.201(a), contracting officers
shall comply with the specific policies listed
in this section and shall consider recommendations of the agency
Director of Small and Disadvantaged Business Utilization, or the
Director's designee, as to whether a particular acquisition should be
awarded under Subpart 19.5 or 19.8. * * *
26. Section 19.202-3 is revised to read as follows:
19.202-3 Equal low bids.
In the event of equal low bids (see 14.408-6), awards shall be made
first to small business concerns which are also labor surplus area
concerns, and second to small business concerns which are not also
labor surplus area concerns.
27. Section 19.202-5 is amended by revising paragraphs (a) and (b)
to read as follows:
19.202-5 Data collection and reporting requirements.
* * * * *
(a) Require each prospective contractor to represent whether it is
a small business, small disadvantaged business or women-owned small
business (see the provision at 52.219-1, Small Business Program
Representations).
(b) Accurately measure the extent of participation by small, small
disadvantaged, and women-owned small businesses in Government
acquisitions in terms of the total value of contracts placed during
each fiscal year, and report data to the SBA at the end of each fiscal
year (see Subpart 4.6).
* * * * *
28. Section 19.301 is amended by revising the first sentence of
paragraph (d) to read as follows:
19.301 Representation by the offeror.
(d) If the SBA determines that the status of a concern as a ``small
business,'' a ``small disadvantaged business'' or a ``women-owned small
business'' has been misrepresented in order to obtain a set-aside
contract, an 8(a) subcontract, a subcontract that is to be included as
part or all of a goal contained in a subcontracting plan, or a prime or
subcontract to be awarded as a result, or in furtherance of any other
provision of Federal law that specifically references Section 8(d) of
the Small Business Act for a definition of program eligibility, the SBA
may take action as specified in Section 16(d) of the Act. * * *
* * * * *
29. Section 19.304 is revised to read as follows:
19.304 Solicitation provision and contract clause.
(a) The contracting officer shall insert the provision at 52.219-1,
Small Business Program Representations, in solicitations exceeding the
micro-purchase threshold when the contract 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.
(b) When contracting by sealed bidding, the contracting officer
shall insert the provision at 52.219-2, Equal Low Bids, in
solicitations and contracts when the contract 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.
19.401 [Amended]
30. Section 19.401 is amended in paragraph (a) by removing the
phrase ``and small disadvantaged business''.
31. Section 19.402 is amended by revising paragraph (c)(1)(ii) to
read as follows:
19.402 Small Business Administration procurement center
representatives.
* * * * *
(c) * * *
(1) * * *
(ii) New qualified small, small disadvantaged and women-owned small business sources, and
* * * * *
32. Section 19.501 is amended in the third sentence of paragraph
(a) by removing ``or, except for the Department of Defense, restricted
to small businesses located in labor surplus areas''; and by revising
the first sentence of paragraph (h) to read as follows:
19.501 General.
* * * * *
(h) Section 305 of Public Law 103-403 authorizes public and private
organizations for the handicapped to participate for fiscal year 1995
in acquisitions set-aside for small business concerns. * * *
* * * * *
19.504 [Reserved]
33. Section 19.504 is removed and reserved.
34. Section 19.505 is revised to read as follows:
19.505 Rejecting Small Business Administration recommendations.
(a) If the contracting officer rejects a recommendation of the SBA
procurement center representative or breakout procurement center
representative, written notice shall be furnished to the appropriate
SBA center representative within 5 working days of the contracting
officer's receipt of the recommendation.
(b) The SBA procurement center representative may appeal the
contracting officer's rejection to the head of the contracting activity
(or designee) within 2 working days after receiving the notice. The
head of the contracting activity (or designee) shall render a decision
in writing, and provide it to the SBA representative within 7 working
days. Pending issuance of a decision to the SBA procurement center
representative, the contracting officer shall suspend action on the
acquisition.
(c) If the head of the contracting activity agrees that the
contracting officer's rejection was appropriate, the SBA procurement
center representative may--
(1) Within 1 working day, request the contracting officer to
suspend action on the acquisition until the SBA Administrator appeals
to the agency head (see paragraph (f) of this section); and
(2) The SBA shall be allowed 15 working days after making such a written request, within which the Administrator of SBA
(i) May appeal to the Secretary of the Department concerned, and
(ii) Shall notify the contracting officer whether the further
appeal has, in fact, been taken.
If notification is not received by the contracting officer within the
15-day period, it shall be deemed that the SBA request to suspend
contracting action has been withdrawn and that an appeal to the
Secretary was not taken.
(d) When the contracting officer has been notified within the 15-
day period that the SBA has appealed to the agency head, the head of
the contracting activity (or designee) shall forward justification for
its decision to the agency head. The contracting officer shall suspend
contract action until notification is received that the SBA appeal has
been settled.
(e) The agency head shall reply to the SBA within 30 working days
after receiving the appeal. The decision of the agency head shall be
final.
(f) A request to suspend action on an acquisition need not be
honored if the contracting officer determines that proceeding to
contract award and performance is in the public interest. The
contracting officer shall include in the contract file a statement of
the facts justifying the determination, and shall promptly notify the
SBA representative of the determination and provide a copy of the
justification.
35. Section 19.506 is revised to read as follows:
19.506 Withdrawing or modifying set-asides.
(a) If, before award of a contract involving a set-aside, the
contracting officer considers that award would be detrimental to the
public interest, (e.g., payment of more than a fair market price), the
contracting officer may withdraw the set-aside determination whether it
was unilateral or joint. The contracting officer shall initiate a
withdrawal of an individual set-aside by giving written notice to the
agency small business specialist and the SBA procurement center
representative, if one is assigned, stating the reasons. In a similar
manner, the contracting officer may modify a unilateral or joint class
set-aside to withdraw one or more individual acquisitions.
(b) If the agency small business specialist does not agree to a
withdrawal or modification, the case shall be promptly referred to the
SBA representative (if one is assigned) for review. If an SBA
representative is not assigned, disagreements between the agency small
business specialist and the contracting officer shall be resolved using
agency procedures. However, the procedures are not applicable to
automatic dissolutions of set-asides (see 19.507) or dissolution of
set-asides under $100,000.
(c) The contracting officer shall prepare a written statement
supporting any withdrawal or modification of a set-aside and include it
in the contract file.
19.508 [Amended]
36. Section 19.508 is amended by removing and reserving paragraph (b).
Subpart 19.7--Subcontracting With Small Business, Small
Disadvantaged Business and Women-Owned Small Business Concerns
37. The heading of Subpart 19.7 is revised to read as set forth
above.
38. Section 19.702 is amended by revising the introductory text and
paragraph (b)(4) to read as follows:
19.702 Statutory requirements.
Any contractor receiving a contract for more than the simplified
acquisition threshold in Part 13 shall agree in the contract that small
business concerns, small disadvantaged business concerns and women-
owned small business concerns shall have the maximum practicable
opportunity to participate in contract performance consistent with its
efficient performance. It is further the policy of the United States
that its prime contractors establish procedures to ensure the timely
payment of amounts due pursuant to the terms of their subcontracts with small business concerns, small disadvantaged business concerns and
women-owned small business concerns.
* * * * *
(b) * * *
(4) For modifications to contracts that do not contain the clause
at 52.219-8, Utilization of Small, Small Disadvantaged and Women-Owned
Small Business Concerns (or equivalent prior clauses).
* * * * *
39. Section 19.703 is amended by revising paragraph (a)
introductory text, (a)(1), and (b) to read as follows:
19.703 Eligibility requirements for participating in the program.
(a) To be eligible as a subcontractor under the program, a concern
must represent itself as a small business concern, small disadvantaged
business concern or a woman-owned small business concern.
(1) To represent itself as a small business concern or a women-
owned small business concern, a concern must meet the appropriate
definition in 19.001.
* * * * *
(b) A contractor acting in good faith may rely on the written
representation of its subcontractor regarding the subcontractor's
status. The contractor, the contracting officer, or any other
interested party can challenge a subcontractor's size status
representation by filing a protest, in accordance with 13 CFR 121.1601
through 121.1608. Protests challenging a subcontractor's disadvantaged
status representation shall be filed in accordance with 13 CFR 124.601
through 124.610. Protests challenging a subcontractor's status as a
women-owned small business concern shall be filed in accordance with
Small Business Administration procedures.
40. Section 19.704 is amended by revising paragraphs (a)(1),
(a)(3), (a)(4), (a)(6), and (b) to read as follows:
19.704 Subcontracting plan requirements.
(a) * * *
(1) Separate percentage goals for using small business concerns,
small disadvantaged business concerns and women-owned small business
concerns as subcontractors;
* * * * *
(3) A description of the efforts the offeror will make to ensure
that small business concerns, small disadvantaged business concerns and
women-owned small business concerns will have an equitable opportunity
to compete for subcontracts;
(4) Assurances that the offeror will include the clause at 52.219-
8, Utilization of Small, Small Disadvantaged and Women-Owned Small
Business Concerns (see 19.708(b)), in all subcontracts that offer
further subcontracting opportunities, and that the offeror will require
all subcontractors (except small business concerns) that receive
subcontracts in excess of $500,000 ($1,000,000 for construction) to
adopt a plan similar to the plan required by the clause at 52.219-9,
Small, Small Disadvantaged and Women-Owned Small Business
Subcontracting Plan (see 19.708(c));
* * * * *
(6) A recitation of the types of records the offeror will maintain
to demonstrate procedures adopted to comply with the requirements and
goals in the plan, including establishing source lists; and a
description of the offeror's efforts to locate small, small
disadvantaged and women-owned small business concerns and to award
subcontracts to them.
(b) Contractors may establish, on a plant or division-wide basis, a
master subcontracting plan which contains all the elements required by
the clause at 52.219-9, Small, Small Disadvantaged and Women-Owned
Small Business Subcontracting Plan, except goals. Master plans shall be
effective for a 1-year period after approval by the contracting
officer; however, a master plan when incorporated in an individual plan
shall apply to that contract throughout the life of the contract.
* * * * *
19.705-1 [Amended]
41. Section 19.705-1 is amended in the first sentence by removing
the phrase ``for Small and Small Disadvantaged Business Concerns''.
19.705-2 [Amended]
42. Section 19.705-2 is amended in the first sentence of paragraph
(d) introductory text by removing the words ``small business and small
disadvantaged'' and inserting in their place, ``small, small
disadvantaged and women-owned small''.
43. Section 19.705-4 is amended by revising the last sentence of
paragraph (b), the second and last sentences of paragraph (c); the
first sentence of paragraphs (d)(1) and (d)(5); and paragraphs (d)(4)
and (d)(6) to read as follows:
19.705-4 Reviewing the subcontracting plan.
* * * * *
(b) * * * If the plan, although responsive, evidences the bidder's
intention not to comply with its obligations under the clause at
52.219-8, Utilization of Small, Small Disadvantaged and Women-Owned Small Business Concerns, the contracting officer may find the bidder
nonresponsible.
(c) * * * Subcontracting goals should be set at a level that the
parties reasonably expect can result from the offeror expending good
faith efforts to use small, small disadvantaged and women-owned small
business subcontractors to the maximum practicable extent. * * * An
incentive subcontracting clause (see 52.219-10, Incentive
Subcontracting Program), may be used when additional and unique
contract effort, such as providing technical assistance, could
significantly increase subcontract awards to small, small disadvantaged
or women-owned small businesses.
(d) * * *
(1) Evaluate the offeror's past performance in awarding
subcontracts for the same or similar products or services to small,
small disadvantaged and women-owned small business concerns. * * *
* * * * *
(4) Evaluate subcontracting potential, considering the offeror's
make-or-buy policies or programs, the nature of the products or
services to be subcontracted, the known availability of small, small
disadvantaged and women-owned small business concerns in the
geographical area where the work will be performed, and the potential
contractor's long-standing contractual relationship with its suppliers.
(5) Advise the offeror of available sources of information on
potential small, small disadvantaged and women-owned small business
subcontractors, as well as any specific concerns known to be potential
subcontractors. * * *
(6) Obtain advice and recommendations from the SBA procurement
center representative (if any) and the agency small business
specialist.
19.705-7 [Amended]
44. Section 19.705-7 is amended--
a. In the first sentence of paragraph (a) by removing the word
``and'' the first time it appears and inserting a comma in its place;
and adding the phrase ``and women-owned small'' after the word
``disadvantaged'';
b. In the third sentence of paragraph (d) by removing the words
``business and'' and replacing them with a comma; and adding the phrase
``and women-owned small'' after the word ``disadvantaged'';
c. In the fourth sentence of paragraph (d) by removing the phrase
``business or'' and inserting a comma in its place; and adding the
phrase ``or woman-owned small'' after the word ``disadvantaged'';
d. In paragraph (f) by removing the words ``Business and'' and
replacing them with a comma; and adding the phrase ``and Women-Owned
Small'' after the word ``Disadvantaged''.
45. Section 19.706 is amended by revising paragraphs (a)(2) and
(a)(3) to read as follows:
19.706 Responsibilities of the cognizant administrative contracting
officer.
(a) * * *
(2) Information on the extent to which the contractor is meeting the plan's goals for subcontracting with eligible small, small
disadvantaged and women-owned small business concerns;
(3) Information on whether the contractor's efforts to ensure the participation of small, small disadvantaged and women-owned small
business concerns are in accordance with its subcontracting plan;
* * * * *
46. Section 19.708 is amended by revising paragraph (a)
introductory text, (b) and (c) to read as follows:
19.708 Solicitation provisions and contract clauses.
(a) The contracting officer shall insert the clause at 52.219-8,
Utilization of Small, Small Disadvantaged and Women-Owned Small
Business Concerns, in solicitations and contracts when the contract
amount is expected to be over the simplified acquisition threshold in
Part 13 unless--
* * * * *
(b)(1) The contracting officer shall, when contracting by
negotiation, insert the clause at 52.219-9, Small, Small Disadvantaged
and Women-Owned Small Business Subcontracting Plan, in solicitations
and contracts that
(i) Offer subcontracting possibilities,
(ii) Are expected to exceed $500,000 ($1,000,000 for construction of any public facility), and
(iii) Are required to include the clause at 52.219-8, Utilization
of Small, Small Disadvantaged and Women-Owned Small Business Concerns, unless the acquisition has been set aside or is to be accomplished under the 8(a) program. When contracting by sealed bidding rather than by negotiation, the contracting officer shall use the clause with its Alternate I.
(2) The contracting officer shall insert the clause at 52.219-16,
Liquidated Damages--Subcontracting Plan, in all solicitations and
contracts containing the clause at 52.219-9, Small, Small Disadvantaged
and Women-Owned Small Business Subcontracting Plan, or its Alternate I.
(c)(1) The contracting officer may, when contracting by
negotiation, insert in solicitations and contracts a clause
substantially the same as the clause at 52.219-10, Incentive
Subcontracting Program, when a subcontracting plan is required (see
19.702(a)(1)), and inclusion of a monetary incentive is, in the
judgment of the contracting officer, necessary to increase
subcontracting opportunities for small, small disadvantaged and women-
owned small business concerns, and is commensurate with the efficient
and economical performance of the contract; unless the conditions in
paragraph (c)(3) of this section are applicable. The contracting
officer may vary the terms of the clause as specified in paragraph
(c)(2) of this section.
(2) Various approaches may be used in the development of small,
small disadvantaged and women-owned small business concerns'
subcontracting incentives. They can take many forms, from a fully
quantified schedule of payments based on actual subcontract achievement
to an award fee approach employing subjective evaluation criteria (see
paragraph (c)(3) of this section). The incentive should not reward the
contractor for results other than those that are attributable to the
contractor's efforts under the incentive subcontracting program.
(3) As specified in paragraph (c)(2) of this section, the
contracting officer may include small, small disadvantaged and women-
owned small business subcontracting as one of the factors to be
considered in determining the award fee in a cost-plus-award-fee
contract; in such cases, however, the contracting officer shall not use
the clause at 52.219-10, Incentive Subcontracting Program.
19.811-3 [Amended]
47. Section 19.811-3(d)(3) is amended by removing the citation
``19.502-2(b)'' and inserting ``19.502-2(c)'' in its place.
Subpart 19.9 [Remove and Reserved]
48. Subpart 19.9, consisting of sections 19.901 and 19.902, is
removed and reserved.
PART 20 [REMOVED AND RESERVED]
49. Part 20 is removed and reserved.
PART 25--FOREIGN ACQUISITION
25.105 [Amended]
50. Section 25.105 is amended in paragraph (a)(1) by removing the
phrase ``that is not a labor surplus area concern''; and in paragraph
(a)(2) by removing the phrase ``or any labor surplus area concern''.
25.404 [REMOVED AND RESERVED]
51. Section 25.404 is removed and reserved.
PART 26--OTHER SOCIOECONOMIC PROGRAMS
52. The Note to Part 26 is amended by removing ``20,''.
26.104 [Amended]
53. Section 26.104 is amended in paragraphs (a) and (b) by removing
``Business and'' and inserting a comma in its place; and inserting
after the word ``Disadvantaged'' the phrase ``and Women-Owned Small''.
PART 42--CONTRACT ADMINISTRATION
54. Section 42.302 is amended by revising paragraphs (a)(52)
through (a)(55) to read as follows:
42.302 Contract administration functions.
* * * * *
(a) * * *
(52) Review, evaluate, and approve plant or division-wide small,
small disadvantaged and women-owned small business master
subcontracting plans.
(53) Obtain the contractor's currently approved company- or
division-wide plans for small, small disadvantaged and women-owned
small business subcontracting for its commercial products, or, if there
is no currently approved plan, assist the contracting officer in
evaluating the plans for those products.
(54) Assist the contracting officer, upon request, in evaluating an
offeror's proposed small, small disadvantaged and women-owned small
business subcontracting plans, including documentation of compliance
with similar plans under prior contracts.
(55) By periodic surveillance, ensure the contractor's compliance
with small, small disadvantaged and women-owned small business
subcontracting plans and any labor surplus area contractual
requirements; maintain documentation of the contractor's performance
under and compliance with these plans and requirements; and provide
advice and assistance to the firms involved, as appropriate.
* * * * *
42.501 [Amended]
55. Section 42.501 is amended in paragraph (b) by removing the word
``and'' and inserting a comma in its place; and inserting after the
word ``disadvantaged'' the phrase ``and women-owned small''.
56. Section 42.502 is amended by revising paragraphs (i) and (j) to
read as follows:
42.502 Selecting contracts for postaward orientation.
* * * * *
(i) Contractor's status, if any, as a small business, small
disadvantaged or women-owned small business concern;
(j) Contractor's performance history with small, small
disadvantaged and women-owned small business subcontracting programs;
* * * * *
PART 44--SUBCONTRACTING POLICIES AND PROCEDURES
44.202-2 [Amended]
57. Section 44.202-2 is amended in paragraph (a)(4) by removing the
phrase ``labor surplus area or''; removing the phrase ``business
concerns and'' and inserting a comma in its place; and inserting after
the word ``disadvantaged'' the phrase ``and women-owned small''.
44.303 [Amended]
58. Section 44.303 is amended in paragraph (e) by removing the
phrase ``labor surplus area concerns and''; and inserting after the
word ``disadvantaged'' the phrase ``and women-owned small''.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
59. Section 52.204-5 is added to read as follows:
52.204-5 Women-Owned Business.
As prescribed in 4.603, insert the following provision:
Women-Owned Business (Oct 1995)
(a) Representation. The offeror represents that it {time} is,
{time} is not a women-owned business concern.
(b) Definition. ``Women-owned business concern,'' as used in
this provision, means a concern which is at least 51 percent owned
by one or more women; or in the case of any publicly owned business,
at least 51 percent of the stock of which is owned by one or more
women; and whose management and daily business operations are
controlled by one or more women.
(End of provision)
52.216-21 [Amended]
60. Section 52.216-21 is amended by revising the clause date to
read (OCT 1995), in Alternates III and IV by revising the dates to read
``(OCT 1995)'' and by removing the phrase ``or labor surplus area''
from the introductory texts.
61. Section 52.219-1 is revised to read as follows:
52.219-1 Small Business Program Representations.
As prescribed in 19.304(a), insert the following provision:
Small Business Program Representations (Oct 1995)
(a)(1) The standard industrial classification (SIC) code for
this acquisition is __________ (insert SIC code).
(2) The small business size standard is ________ (insert size
standard).
(3) The small business size standard for a concern which submits
an offer in its own name, other than on a construction or service
contract, but which proposes to furnish a product which it did not
itself manufacture, is 500 employees.
(b) Representations. (1) The offeror represents and certifies as
part of its offer that it {time} is, {time} is not a small
business concern.
(2) (Complete only if offeror represented itself as a small
business concern in block (b)(1) of this section.) The offeror
represents as part of its offer that it {time} is, {time} is not a
small disadvantaged business concern.
(3) (Complete only if offeror represented itself as a small
business concern in block (b)(1) of this section.) The offeror
represents as part of its offer that it {time} is, {time} is not a
women-owned small business concern.
(c) Definitions. Small business concern, as used in this
provision, means a concern, including its affiliates, that is
independently owned and operated, not dominant in the field of
operation in which it is bidding on Government contracts, and
qualified as a small business under the criteria in 13 CFR Part 121
and the size standard in paragraph (a) of this provision.
Small disadvantaged business concern, as used in this provision,
means a small business concern that (1) is at least 51 percent
unconditionally owned by one or more individuals who are both
socially and economically disadvantaged, or a publicly owned
business having at least 51 percent of its stock unconditionally
owned by one or more socially and economically disadvantaged
individuals, and (2) has its management and daily business
controlled by one or more such individuals. This term also means a
small business concern that is at least 51 percent unconditionally
owned by an economically disadvantaged Indian tribe or Native
Hawaiian Organization, or a publicly owned business having at least
51 percent of its stock unconditionally owned by one or more of
these entities, which has its management and daily business
controlled by members of an economically disadvantaged Indian tribe
or Native Hawaiian Organization, and which meets the requirements of
13 CFR Part 124.
Women-owned small business concern, as used in this provision,
means a small business concern--
(1) Which is at least 51 percent owned by one or more women or,
in the case of any publicly owned business, at least 51 percent of
the stock of which is owned by one or more women; and
(2) Whose management and daily business operations are
controlled by one or more women.
(d) Notice.
(1) If this solicitation is for supplies and has
been set aside, in whole or
in part, for small business concerns, then the clause in this
solicitation providing notice of the set-aside contains restrictions
on the source of the end items to be furnished.
(2) Under 15 U.S.C. 645(d), any person who misrepresents a
firm's status as a small or small disadvantaged business concern in
order to obtain a contract to be awarded under the preference
programs established pursuant to sections 8(a), 8(d), 9, or 15 of
the Small Business Act or any other provision of Federal law that
specifically references section 8(d) for a definition of program
eligibility, shall--
(i) Be punished by imposition of fine, imprisonment, or both;
(ii) Be subject to administrative remedies, including suspension
and debarment; and
(iii) Be ineligible for participation in programs conducted
under the authority of the Act.
(End of provision)
52.219-2 [Removed]
52.220-1 [Redesignated as 52.219]
62. Section 52.219-2 is removed and 52.220-1 is redesignated in its
place and is revised to read as follows:
52.219-2 Equal Low Bids.
As prescribed in 19.304(b), insert the following provision:
Equal Low Bids (Oct 1995)
(a) This provision applies to small business concerns only.
(b) The bidder's status as a labor surplus area (LSA) concern
may affect entitlement to award in case of tie bids. If the bidder
wishes to be considered for this priority, the bidder must identify,
in the following space, the LSA in which the costs to be incurred on
account of manufacturing or production (by the bidder or the first-
tier subcontractors) amount to more than 50 percent of the contract
price.
-----------------------------------------------------------------------
----------------------------------------------------------------------
(c) Failure to identify the labor surplus areas as specified in
paragraph (b) of this provision will preclude the bidder from
receiving priority consideration. If the bidder is awarded a
contract as a result of receiving priority consideration under this
provision and would not have otherwise received award, the bidder
shall perform the contract or cause the contract to be performed in
accordance with the obligations of an LSA concern.
(End of provision)
52.219-3 and 52.219-5 [Removed and reserved]
63. Sections 52.219-3 and 52.219-5 are removed and reserved.
64. Section 52.219-6 is amended by revising Alternate I to read as
follows:
52.219-6 Notice of Total Small Business Set-Aside.
* * * * *
Alternate I (OCT 1995). When the acquisition is for a product in
a class for which the Small Business Administration has determined
that there are no small business manufacturers or processors in the
Federal market in accordance with 19.502-2(c), delete paragraph (c).
65. Section 52.219-7 is amended by revising the date of the clause;
in paragraph (a) by removing the definitions Labor surplus area, Labor
surplus area concern, and Perform substantially in labor surplus areas;
and by revising paragraphs (b)(4) and (c) and Alternate I to read as
follows:
52.219-7 Notice of Partial Small Business Set-Aside.
* * * * *
Notice of Partial Small Business Set-Aside (Oct 1995)
* * * * *
(b) * * *
(4) The contractor(s) for the set-aside portion will be selected
from among the small business concerns that submitted responsive
offers on the non-set-aside portion. Negotiations will be conducted
with the concern that submitted the lowest responsive offer on the
non-set-aside portion. If the negotiations are not successful or if
only part of the set-aside portion is awarded to that concern,
negotiations will be conducted with the concern that submitted the
second-lowest responsive offer on the non-set-aside portion. This
process will continue until a contract or contracts are awarded for
the entire set-aside portion.
* * * * *
(c) Agreement. For the set-aside portion of the acquisition, a
manufacturer or regular dealer submitting an offer in its own name
agrees to furnish, in performing the contract, only end items
manufactured or produced by small business concerns inside the
United States, its territories and possessions, the Commonwealth of
Puerto Rico, the Trust Territory of the Pacific Islands, or the
District of Columbia. However, this requirement does not apply in
connection with construction or service contracts.
(End of clause)
Alternate I (OCT 1995). When the acquisition is for a product in
a class for which the Small Business Administration has determined
that there are no small business manufacturers or processors in the
Federal market in accordance with 19.502-2(c), delete paragraph (c).
66. Section 52.219-8 is amended by revising the section heading;
the clause heading and date; paragraph (a); redesignating paragraph (d)
as (e) and revising it; and adding a new paragraph (d) to read as
follows:
52.219-8 Utilization of Small, Small Disadvantaged and Women-Owned
Small Business Concerns.
* * * * *
Utilization of Small, Small Disadvantaged and Women-Owned Small
Business Concerns (Oct 1995)
(a) It is the policy of the United States that small business
concerns, small business concerns owned and controlled by socially
and economically disadvantaged individuals and small business
concerns owned and controlled by women shall have the maximum
practicable opportunity to participate in performing contracts let
by any Federal agency, including contracts and subcontracts for
subsystems, assemblies, components, and related services for major
systems. It is further the policy of the United States that its
prime contractors establish procedures to ensure the timely payment
of amounts due pursuant to the terms of their subcontracts with
small business concerns, small business concerns owned and
controlled by socially and economically disadvantaged individuals
and small business concerns owned and controlled by women.
* * * * *
(d) The term ``small business concern owned and controlled by
women'' shall mean a small business concern (i) which is at least 51
percent owned by one or more women, or, in the case of any publicly
owned business, at least 51 percent of the stock of which is owned
by one or more women, and (ii) whose management and daily business
operations are controlled by one or more women; and
(e) Contractors acting in good faith may rely on written
representations by their subcontractors regarding their status as a
small business concern, a small business concern owned and
controlled by socially and economically disadvantaged individuals or
a small business concern owned and controlled by women.
(End of clause)
67. Section 52.219-9 is amended by revising--
a. The section heading;
b. The clause heading and date;
c. The first two sentences of paragraph (c);
d. Paragraphs (d), (e), (i), and Alternate I to read as follows:
52.219-9 Small, Small Disadvantaged and Women-Owned Small Business
Subcontracting Plan.
* * * * *
Small, Small Disadvantaged and Women-Owned Small Business
Subcontracting Plan (Oct 1995)
* * * * *
(c) The offeror, upon request by the Contracting Officer, shall
submit and negotiate a subcontracting plan, where applicable, which
separately addresses subcontracting with small business concerns,
with small disadvantaged business concerns and with women-owned
small business concerns. If the offeror is submitting an individual
contract plan, the plan must separately address subcontracting with
small business concerns, small disadvantaged business concerns, and
women-owned small
business concerns with a separate part for the basic contract and
separate parts for each option (if any). * * *
(d) The offeror's subcontracting plan shall include the
following:
(1) Goals, expressed in terms of percentages of total planned
subcontracting dollars, for the use of small business concerns,
small disadvantaged business concerns and women-owned small business
concerns as subcontractors. The offeror shall include all
subcontracts that contribute to contract performance, and may
include a proportionate share of products and services that are
normally allocated as indirect costs.
(2) A statement of--
(i) Total dollars planned to be subcontracted;
(ii) Total dollars planned to be subcontracted to small business
concerns;
(iii) Total dollars planned to be subcontracted to small
disadvantaged business concerns; and
(iv) Total dollars planned to be subcontracted to women-owned
small business concerns.
(3) A description of the principal types of supplies and
services to be subcontracted, and an identification of the types
planned for subcontracting to (i) small business concerns, (ii)
small disadvantaged business concerns and (iii) women-owned small
business concerns.
(4) A description of the method used to develop the
subcontracting goals in paragraph (d)(1) of this clause.
(5) A description of the method used to identify potential
sources for solicitation purposes (e.g., existing company source
lists, the Procurement Automated Source System (PASS) of the Small
Business Administration, the National Minority Purchasing Council
Vendor Information Service, the Research and Information Division of
the Minority Business Development Agency in the Department of
Commerce, or small, small disadvantaged and women-owned small
business concerns trade associations). A firm may rely on the
information contained in PASS as an accurate representation of a
concern's size and ownership characteristics for purposes of
maintaining a small business source list. A firm may rely on PASS as
its small business source list. Use of the PASS as its source list
does not relieve a firm of its responsibilities (e.g., outreach,
assistance, counseling, publicizing subcontracting opportunities) in
this clause.
(6) A statement as to whether or not the offeror included
indirect costs in establishing subcontracting goals, and a
description of the method used to determine the proportionate share
of indirect costs to be incurred with (i) small business concerns,
(ii) small disadvantaged business concerns, and (iii) women-owned
small business concerns.
(7) The name of the individual employed by the offeror who will
administer the offeror's subcontracting program, and a description
of the duties of the individual.
(8) A description of the efforts the offeror will make to assure
that small, small disadvantaged and women-owned small business
concerns have an equitable opportunity to compete for subcontracts.
(9) Assurances that the offeror will include the clause in this
contract entitled ``Utilization of Small, Small Disadvantaged and
Women-Owned Small Business Concerns'' in all subcontracts that offer
further subcontracting opportunities, and that the offeror will
require all subcontractors (except small business concerns) who
receive subcontracts in excess of $500,000 ($1,000,000 for
construction of any public facility) to adopt a plan similar to the
plan agreed to by the offeror.
(10) Assurances that the offeror will (i) cooperate in any
studies or surveys as may be required, (ii) submit periodic reports
in order to allow the Government to determine the extent of
compliance by the offeror with the subcontracting plan, (iii) submit
Standard Form (SF) 294, Subcontracting Report for Individual
Contracts, and/or SF 295, Summary Subcontract Report, in accordance
with the instructions on the forms, and (iv) ensure that its
subcontractors agree to submit Standard Forms 294 and 295.
(11) A recitation of the types of records the offeror will
maintain to demonstrate procedures that have been adopted to comply
with the requirements and goals in the plan, including establishing
source lists; and a description of its efforts to locate small,
small disadvantaged and women-owned small business concerns and
award subcontracts to them. The records shall include at least the
following (on a plant-wide or company-wide basis, unless otherwise
indicated):
(i) Source lists (e.g., PASS), guides, and other data that
identify small, small disadvantaged and women-owned small business
concerns.
(ii) Organizations contacted in an attempt to locate sources
that are small, small disadvantaged or women-owned small business
concerns.
(iii) Records on each subcontract solicitation resulting in an
award of more than $100,000, indicating (A) whether small business
concerns were solicited and if not, why not, (B) whether small
disadvantaged business concerns were solicited and if not, why not,
(C) whether women-owned small business concerns were solicited and
if not, why not, and (D) if applicable, the reason award was not
made to a small business concern.
(iv) Records of any outreach efforts to contact (A) trade
associations, (B) business development organizations, and (C)
conferences and trade fairs to locate small, small disadvantaged and
women-owned small business sources.
(v) Records of internal guidance and encouragement provided to
buyers through (A) workshops, seminars, training, etc., and (B)
monitoring performance to evaluate compliance with the program's
requirements.
(vi) On a contract-by-contract basis, records to support award
data submitted by the offeror to the Government, including the name,
address, and business size of each subcontractor. Contractors having
company or division-wide annual plans need not comply with this
requirement.
(e) In order to effectively implement this plan to the extent
consistent with efficient contract performance, the Contractor shall
perform the following functions:
(1) Assist small, small disadvantaged and women-owned small
business concerns by arranging solicitations, time for the
preparation of bids, quantities, specifications, and delivery
schedules so as to facilitate the participation by such concerns.
Where the contractor's lists of potential small, small disadvantaged
and women-owned small business subcontractors are excessively long,
reasonable effort shall be made to give all such small business
concerns an opportunity to compete over a period of time.
(2) Provide adequate and timely consideration of the
potentialities of small, small disadvantaged and women-owned small
business concerns in all ``make-or-buy'' decisions.
(3) Counsel and discuss subcontracting opportunities with
representatives of small, small disadvantaged and women-owned small
business firms.
(4) Provide notice to subcontractors concerning penalties and
remedies for misrepresentations of business status as small, small
disadvantaged or women-owned small business for the purpose of
obtaining a subcontract that is to be included as part or all of a
goal contained in the Contractor's subcontracting plan.
* * * * *
(i) The failure of the Contractor or subcontractor to comply in
good faith with (1) the clause of this contract entitled
``Utilization Of Small, Small Disadvantaged and Women-Owned Small
Business Concerns,'' or (2) an approved plan required by this
clause, shall be a material breach of the contract.
(End of clause)
Alternate I (OCT 1995). When contracting by sealed bidding
rather than by negotiation, substitute the following paragraph (c)
for paragraph (c) of the basic clause:
(c) The apparent low bidder, upon request by the Contracting
officer, shall submit a subcontracting plan, where applicable, which
separately addresses subcontracting with small business concerns,
with small disadvantaged business concerns and with women-owned
small business concerns. If the bidder is submitting an individual
contract plan, the plan must separately address subcontracting with
small business concerns, small disadvantaged business concerns and
women-owned small business concerns, with a separate part for the
basic contract and separate parts for each option (if any). The plan
shall be included in and made a part of the resultant contract. The
subcontracting plan shall be submitted within the time specified by
the Contracting Officer. Failure to submit the subcontracting plan
shall make the bidder ineligible for the award of a contract.
52.219-10 [Amended]
68. Section 52.219-10 is amended in--
(a) The section heading and clause heading by removing ``for Small
and Small Disadvantaged Business Concerns'' and revising the clause
date to read ``Oct. 1995''.
(b) The introductory text by removing the text following
``19.708(c)(1),'' and inserting in its place ``insert the following clause:''; and
(c) Paragraph (a) of the clause by removing ``and'', inserting a
comma, and removing the period at the end of the sentence and inserting
``and a certain percentage to women-owned small business concerns.''
52.219-13 [Removed and reserved]
69. Section 52.219-13 is removed and reserved.
70. Section 52.219-16 is amended by revising the section heading,
clause heading and date; paragraph (a); the first sentence of paragraph
(b); and paragraphs (d) and (f) to read as follows:
52.219-16 Liquidated Damages--Subcontracting Plan.
* * * * *
Liquidated Damages--Subcontracting Plan (Oct 1995)
(a) Failure to make a good faith effort to comply with the
subcontracting plan, as used in this clause, means a willful or
intentional failure to perform in accordance with the requirements
of the subcontracting plan approved under the clause in this
contract entitled ``Small, Small Disadvantaged and Women-Owned Small
Business Subcontracting Plan,'' or willful or intentional action to
frustrate the plan.
(b) If, at contract completion, or in the case of a commercial
product plan, at the close of the fiscal year for which the plan is
applicable, the Contractor has failed to meet its subcontracting
goals and the Contracting Officer decides in accordance with
paragraph (c) of this clause that the Contractor failed to make a
good faith effort to comply with its subcontracting plan,
established in accordance with the clause in this contract entitled
``Small, Small Disadvantaged and Women-Owned Small Business
Subcontracting Plan,'' the Contractor shall pay the Government
liquidated damages in an amount stated. * * *
* * * * *
(d) With respect to commercial product plans; i.e., company-wide
or division-wide subcontracting plans approved under paragraph (g)
of the clause in this contract entitled ``Small, Small Disadvantaged
and Women-Owned Small Business Subcontracting Plan,'' the
Contracting Officer of the agency that originally approved the plan
will exercise the functions of the Contracting Officer under this
clause on behalf of all agencies that awarded contracts covered by
that commercial product plan.
* * * * *
(f) Liquidated damages shall be in addition to any other
remedies that the Government may have.
(End of clause)
71. Section 52.219-18 is amended by revising Alternate III to read
as follows:
52.219-18 Notification of Competition Limited to Eligible 8(a)
Concerns.
* * * * *
Alternate III (OCT 1995). When the acquisition is for a product
in a class for which the Small Business Administration has
determined that there are no small business manufacturers or
processors in the Federal market in accordance with 19.502-2(c),
delete paragraph (d).
52.219-22 [Removed and reserved]
72. Section 52.219-22 is removed and reserved.
52.220-2, 52.220-3, and 52.220-4 [Removed]
73. Sections 52.220-2, 52.220-3, and 52.220-4 are removed.
PART 53--FORMS
74. Section 53.219 is revised to read as follows:
53.219 Small business programs.
The following standard forms are prescribed for use in reporting
small, small disadvantaged and women-owned small business
subcontracting data, as specified in Part 19:
(a) SF 294 (REV OCT 1995), Subcontracting Report for Individual
contracts. (See 19.704(a)(5).)
(b) SF 295 (REV OCT 1995), Summary Subcontract Report. (See
19.704(a)(5).) SF 295 is authorized for local reproduction and a copy
is furnished for this purpose in Part 53 of the loose-leaf edition of
the FAR.
75. Sections 53.301-294 and 53.301-295 are revised to read as
follows:
BILLING CODE 6820-EP-P
53.301-294 Subcontracting Report for Individual Contracts.
TR18SE95.003
TR18SE95.004
BILLING CODE 6820-EP-C
53.301-295 Summary Subcontract Report.
TR18SE95.005
TR18SE95.006
ral Register: September 18, 1995 (Volume 60, Number 180)]
s and Regulations]
[Page 48272]
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DEPARTMENT OF DEFENSE
48 CFR Part 5
[FAC 90-32; FAR Case 95-606; Item VI]
RIN 9000-AG60
Federal Acquisition Regulation; Publicizing Contract Actions
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 revise
FAR section 5.207(b)(4), Preparation and transmittal of synopses. The
revision deletes the requirement for the Federal Information Processing
Standard (FIPS) Number in Commerce Business Daily synopses and, in lieu thereof, requests Government Printing Office (GPO) Billing Account Code information.
EFFECTIVE DATE: October 1, 1995.
FOR FURTHER INFORMATION CONTACT: Mr. Ralph De Stefano at (202) 501-1758 in reference to this FAR case. For general information, contact the FAR Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501-4755. Please cite FAC 90-32, FAR case 95-606, Publicizing Contract
Actions.
SUPPLEMENTARY INFORMATION:
A. Background
For approximately 45 years, the Commerce Business Daily (CBD) has
provided free printing services to the agencies. During this period,
printing expenses were paid with appropriated funds. Beginning October
1, 1995, the CBD will no longer receive appropriated funds for this
purpose, and the Department of Commerce will be required to charge
agencies a fee for printing services. The cost will be a flat rate of
$18 per notice and bills will be sent to the agency that issues the
notice. The Government Printing Office (GPO) has agreed to provide
billing and collection services and, in order to facilitate this,
agencies will need to include their GPO account number in all CBD
notices. The proposed changes to the FAR will enable GPO to properly
bill and collect from the individual agency that has placed a CBD
notice.
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 comment 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 of the Act. Such comments must be submitted
separately and cite FAR case 95-606 in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act (Pub. L. 96-511) does not apply because this final rule imposes no new reporting requirements or collections of information from offerors, contractors, or members of the public which require the approval of OMB under 44 U.S.C. 3501, et seq.
List of Subjects in 48 CFR Part 5
Government procurement.
Dated: September 7, 1995.
C. Allen Olson,
Director, Office of Federal Acquisition Policy.
Therefore, 48 CFR Part 5 is amended as set forth below:
1. The authority citation for 48 CFR Part 5 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 5--PUBLICIZING CONTRACT ACTIONS
2. Section 5.207 is amended by revising paragraph (b)(4), Item 4,
and paragraph (b)(6), Item 4, to read as follows:
5.207 Preparation and transmittal of synopses.
* * * * *
(b)(4) * * *
* * * * *
4. GOVERNMENT PRINTING OFFICE (GPO) BILLING ACCOUNT CODE.
(The originating office's account number used by the GPO for
billing and collection purposes. The field length is nine alpha-numeric
characters. The first three characters entered are ``GPO'' and then the
following six characters are the numeric account number. Agencies
should contact the GPO's Office of Comptroller for additional
information. Enter N/A if an account number has not been assigned.)
* * * * *
(b)(6) * * *
* * * * *
4. GPO123456!!
* * * * *
[Federal Register: September 18, 1995 (Volume 60, Number 180)]
[Rules and Regulations]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
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DEPARTMENT OF DEFENSE
48 CFR Parts 28, 32, and 52
[FAC 90-32; FAR Case 94-762; Item VII]
RIN 9000-AG35
Federal Acquisition Regulation; Subcontractor Payments
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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SUMMARY: This final rule is issued pursuant to the Federal Acquisition
Streamlining Act of 1994, Public Law 103-355 (the Act). The Federal
Acquisition Regulatory Council is amending the Federal Acquisition
Regulation (FAR) to implement Sections 2091 and 8105 of the Act which
address subcontractor payments, requests for information, and bonds.
This regulatory action was subject to Office of Management and Budget
review under Executive Order 12866, dated September 30, 1993.
EFFECTIVE DATE: October 1, 1995.
FOR FURTHER INFORMATION CONTACT: Mr. John S. Galbraith, Finance/Payment Team Leader, at (703) 697-6710, in reference to this FAR case. For general information, contact the FAR Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501-4755. Please cite FAC 90-32, FAR case 94-762.
SUPPLEMENTARY INFORMATION:
A. Background
The Federal Acquisition Streamlining Act of 1994, Pub. L. 103-355
(the Act), provides authorities that streamline the acquisition process
and minimize burdensome government-unique requirements.
This notice announces revisions developed under FAR case 94-762.
The following sections of the Federal Acquisition Streamlining Act are
implemented by this final rule:
Section 2091 of the Act changed section 806, subsection (c), of the
Fiscal Years 1992 and 1993 Defense Authorization Act by striking the
existing subsection (c) and inserting a
new subsection (c). The stricken words had permitted the FAR Council to substitute FAR coverage for coverage otherwise required from the
Secretary of Defense. The substituted words require the FAR Council to
place in the FAR, for Government-wide applicability, the coverage
required of the Secretary of Defense.
Additionally, Section 8105 of the Act changed section 806 of the
Fiscal Years 1992 and 1993 Defense Authorization Act by striking the
existing subsection (b) and inserting a new subsection (b). The
stricken words dealt with deadlines for the implementation in
regulations of the statutory requirements, and that coverage is no
longer pertinent. The substituted language creates an exemption from
the requirements of the statute for the acquisition of commercial
items. Therefore, the clause prescription at FAR 28.106-4(b) has been
revised to reflect this exemption.
The final rule is, except for minor adjustments, the same language
which was previously in the Defense Federal Acquisition Regulation
Supplement, at 228.106-4-70, 228.106-6, 232.970, and 252.228-7006 and
proposed in the Federal Register on February 2, 1995.
It should be noted that Section 4104(b) of the Act concerning
subcontractor payments under smaller construction contracts is being
addressed in a separate case. This case, 94-762, addresses only the
changes required by Sections 2091 and 8105. It should also be noted
that the duplication of responsibilities for furnishing copies of bonds
in 28.106-6(d)(3) and the clause in 52.228-12 is intentional. The
statute assigns this responsibility to both the Government and
contractor. Finally, the language in 32.112-1(c) concerning
``administrative and other remedial action'' deliberately does not go
into detail as to what these actions are. The specifics of these areas
and especially the regulations and procedures are peculiar to each
agency. The wording is derived from the underlying statute.
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 it merely requires the
contracting officer or the contractor to furnish bonding information to
subcontractors upon request, and provides for remedies which only apply
to contractors who fail to make payment to subcontractors.
C. Paperwork Reduction Act
The Paperwork Reduction Act (Pub. L. 96-511) is deemed to apply
because the final rule contains information collection requirements.
Accordingly, a request for approval of a new information collection
requirement concerning Subcontractor Payments was submitted to the
Office of Management and Budget and approved through March 31, 1998,
OMB Control No. 9000-0135. Public comments concerning this request were
invited through a Federal Register notice at 60 FR 6526, February 2,
1995.
D. Public Comments
A proposed rule was published in the Federal Register at 60 FR
6602, February 2, 1995. During the public comment period, six comments
were received. For the most part, these comments raised editorial and
cross-reference points, which have been corrected. One commentor
expressed concern about the use of the term ``non-commercial'', and
suggested, as an alternative, the term ``other-than-commercial.'' While
the suggested term may be logically more accurate, the term ``non-
commercial'' has been used throughout all the new Part 32 coverage, and
appears to be correctly understood. It was concluded that this change
in terminology would not significantly improve the coverage, so the
suggestion was not adopted.
List of Subjects in 48 CFR Parts 28, 32, and 52
Government procurement.
Dated: September 7, 1995.
Edward C. Loeb,
Deputy Project Manager for the Implementation of the Federal
Acquisition Streamlining Act of 1994.
Therefore, 48 CFR Parts 28, 32, and 52 are amended as set forth
below:
1. The authority citation for 48 CFR Parts 28, 32, 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 28--BONDS AND INSURANCE
2. Section 28.106-4 is amended by designating the existing text as
paragraph (a) and adding (b) to read as follows:
28.106-4 Contract clause.
* * * * *
(b) In accordance with Section 806(a)(3) of Pub. L. 102-190, as
amended by Sections 2091 and 8105 of Pub. L. 103-355, the contracting
officer shall insert the clause at 52.228-12, Prospective Subcontractor
Requests for Bonds, in solicitations and contracts with respect to
which a payment bond will be furnished pursuant to the Miller Act (see
28.102-1), except for contracts for the acquisition of commercial items
as defined in Subpart 2.1.
3. Section 28.106-6 is amended by adding paragraph (d) to read as
follows:
28.106-6 Furnishing information.
* * * * *
(d) Section 806(a)(2) of Pub. L. 102-190, as amended by Sections
2091 and 8105 of Pub. L. 103-355, requires that the Federal Government
provide information to subcontractors on payment bonds under contracts
for other than commercial items as defined in Subpart 2.1. Upon the
written or oral request of a subcontractor/supplier, or prospective
subcontractor/supplier, under a contract with respect to which a
payment bond has been furnished pursuant to the Miller Act, the
contracting officer shall promptly provide to the requester, either
orally or in writing, as appropriate, any of the following:
(1) Name and address of the surety or sureties on the payment bond.
(2) Penal amount of the payment bond.
(3) Copy of the payment bond. The contracting officer may impose reasonable fees to cover the cost of copying and providing a copy of the payment bond.
PART 32--CONTRACT FINANCING
4. Sections 32.112, 32.112-1 and 32.112-2 are added to read as
follows:
32.112 Payment of subcontractors under contracts for non-commercial
items.
32.112-1 Subcontractor assertions of nonpayment.
(a) In accordance with Section 806(a)(4) of Pub. L. 102-190, as
amended by Sections 2091 and 8105 of Pub. L. 103-355, upon the
assertion by a subcontractor or supplier of a Federal contractor that
the subcontractor or supplier has not been paid in accordance with the
payment terms of the subcontract, purchase order, or other agreement
with the prime contractor, the contracting officer may determine--
(1) For a construction contract, whether the contractor has made--
(i) Progress payments to the subcontractor or supplier in
compliance with Chapter 39 of Title 31, United States Code (Prompt
Payment Act); or
(ii) Final payment to the subcontractor or supplier in compliance with the terms of the subcontract, purchase order, or other agreement with the prime contractor;
(2) For a contract other than construction, whether the contractor has made progress payments, final payments, or other payments to the subcontractor or supplier in compliance with the terms of the subcontract, purchase order, or other agreement with the prime
contractor; or
(3) For any contract, whether the contractor's certification of
payment of a subcontractor or supplier accompanying its payment request
to the Government is accurate.
(b) If, in making the determination in paragraphs (a)(1) and (2) of
this section, the contracting officer finds the prime contractor is not
in compliance, the contracting officer may--
(1) Encourage the contractor to make timely payment to the
subcontractor or supplier; or
(2) If authorized by the applicable payment clauses, reduce or
suspend progress payments to the contractor.
(c) If the contracting officer determines that a certification
referred to in paragraph (a)(3) of this section is inaccurate in any
material respect, the contracting officer shall initiate administrative
or other remedial action.
32.112-2 Subcontractor requests for information.
(a) In accordance with Section 806(a)(1) of Pub. L. 102-190, as
amended by Sections 2091 and 8105 of Pub. L. 103-355, upon the request
of a subcontractor or supplier under a Federal contract for a non-
commercial item, the contracting officer shall promptly advise the
subcontractor or supplier as to--
(1) Whether the prime contractor has submitted requests for
progress payments or other payments to the Federal Government under the contract; and
(2) Whether final payment under the contract has been made by the Federal Government to the prime contractor.
(b) In accordance with 5 U.S.C. 552(b)(1), this subsection does not
apply to matters that are--
(1) Specifically authorized under criteria established by an
Executive order to be kept classified in the interest of national
defense or foreign policy; and
(2) Properly classified pursuant to such Executive order.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
6. Section 52.228-12 is added to read as follows:
52.228-12 Prospective Subcontractor Requests for Bonds.
As prescribed in 28.106-4(b), use the following clause:
Prospective Subcontractor Requests For Bonds (Oct 1995)
In accordance with Section 806(a)(3) of Pub. L. 102-190, as
amended by Sections 2091 and 8105 of Pub. L. 103-355, upon the
request of a prospective subcontractor or supplier offering to
furnish labor or material for the performance of this contract for
which a payment bond has been furnished to the Government pursuant
to the Miller Act, the Contractor shall promptly provide a copy of
such payment bond to the requester.
(End of clause)
[Federal Register: September 18, 1995 (Volume 60, Number 180)]
[Rules and Regulations]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
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DEPARTMENT OF DEFENSE
48 CFR Parts 32, 33, and 52
[FAC 90-32; FAR Case 94-731; Item VIII]
RIN 9000-AG52
Federal Acquisition Regulation; Reimbursement of Protest Costs
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Acquisition Regulatory Council is promulgating
this final rule to allow the Government to seek reimbursement for
protest costs it has paid a protester where the protest has been
sustained based upon the awardee's misrepresentation. In addition to
any other remedies available, the Government may collect this debt by
offsetting the amount against any payment due the awardee under any
Government contract the awardee might have. This regulatory action was
subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.
EFFECTIVE DATE: October 1, 1995.
FOR FURTHER INFORMATION CONTACT: Mr. Craig Hodge, Protests/Disputes
Team Leader at (703) 274-8940 in reference to this FAR case. For
general information, contact the FAR Secretariat, Room 4037, GS
Building, Washington, DC 20405 (202) 501-4755. Please cite FAC 90-32,
FAR case 94-731, Reimbursement of Protest Costs.
SUPPLEMENTARY INFORMATION:
A. Background
The Federal Acquisition Streamlining Act of 1994 (the Act), Pub. L.
103-355, provides authorities that streamline the acquisition process
and minimize burdensome Government-unique requirements.
This case presents FAR amendments developed under FAR Case 94-731, Reimbursement of Protest Costs. Sections 1016, 1403, and 1435 of the Act provide that agencies may be required to pay protest and offer
preparation costs to protesters under certain circumstances. Often as
the result of discovery during a protest, misrepresentations may be
detected that could not have been reasonably known to the agency's
evaluators. A protest may be sustained where the award has been induced by a material misrepresentation by the awardee. Such situations often involve proposed ``key personnel.''
The agency is without effective remedy in such cases.
Theoretically, the agency could ask the Department of Justice to file a
lawsuit against the offeror making the misrepresentations. However, due
to the heavy workload of the Justice attorneys, this is not a practical
alternative. This FAR change will not adversely affect any substantive
right of an offeror. Under the language, the Government remedy is to
offset such costs on the same or an unrelated contract. If the offeror
believes that the offset is not justified, it may appeal the action to
the agency, or under the Contract Disputes Act to either a Board of
Contract Appeals or the Court of Federal Claims.
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 vast majority of
contracts do not involve protests where misrepresentation is detected
through discovery.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the proposed
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. Public Comments
A proposed rule was published in the Federal Register at 60 FR
15450, March 23, 1995. During the public comment period, seven comments were received. Some commenters were concerned that the proposed rule might be in conflict with the Debt Collection Act. However, based on Cecile Ind. v. Department of Defense, 995 F.2d 1052 (Fed. Cir. 1993), we do not believe that the Debt Collection Act applies. If it does, the final rule would comply with the Debt Collection Act. Some commenters felt the clause lacked adequate due process. In response, more procedural guidance has been supplied. In particular, the rule provides for a review by the head of the contracting activity, if requested, before there is any final decision. In addition, actions taken under the clause in this rule may be reviewed by courts or boards under the Contract Disputes Act, like any other contract administration decision.
Several commenters suggested the clause was not necessary because
the Government already has adequate remedies for contractor
misrepresentation. The drafting team agreed that there are additional
remedies. For example, the rule now provides that the contracting
officer should consider referring contractor misrepresentations to the
agency debarring official. However, these remedies do not always prove
adequate in the context of misrepresentations discovered as the result
of bid protests.
One commenter recommended clarification of whether the agency head or the contracting officer is responsible for issuing the demand
letter. The final rule states that this is the responsibility of the
contracting officer.
List of Subjects in 48 CFR Parts 32, 33, and 52
Government procurement.
Dated: September 7, 1995.
Edward C. Loeb,
Deputy Project Manager for the Implementation of the Federal
Acquisition Streamlining Act of 1994.
Therefore, 48 CFR Parts 32, 33, and 52 are amended as set forth
below:
1. The authority citation for 48 CFR Parts 32, 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 32--CONTRACT FINANCING
2. Section 32.602 is amended by adding paragraph (h) to read as
follows:
Sec. 32.602 General.
* * * * *
(h) Reimbursement of costs, as provided in 33.102(b), 33.104(h)(1),
and 33.105(g)(1), paid by the Government where a postaward protest is
sustained as a result of an awardee's misstatement, misrepresentation,
or miscertification.
3. Section 32.603 is revised to read as follows:
Sec. 32.603 Applicability.
Except as otherwise specified, this subpart applies to all debts to
the Government arising in connection with contracts and subcontracts
for the acquisition of supplies or services, and debts arising from the
Government's payment of costs, as provided in 33.102(b), 33.104(h)(1),
and 33.105(g)(1), where a postaward protest is sustained as a result of
an awardee's misstatement, misrepresentation, or miscertification.
4. Section 32.605(b) is amended by inserting the phrase ``including
reimbursement of protest costs,'' between the words ``contract debts,''
and ``the contracting officer''.
PART 33--PROTESTS, DISPUTES, AND APPEALS
5. Section 33.102 is amended by adding paragraph (b)(3) to read as
follows:
Sec. 33.102 General.
* * * * *
(b) * * *
(3) Require the awardee to reimburse the Government's costs, as
provided in this paragraph, where a postaward protest is sustained as
the result of an awardee's intentional or negligent misstatement,
misrepresentation, or miscertification. In addition to any other remedy
available, and pursuant to the requirements of Subpart 32.6, the
Government may collect this debt by offsetting the amount against any
payment due the awardee under any contract between the awardee and the Government.
(i) When a protest is sustained by GAO or GSBCA under circumstances that may allow the Government to seek reimbursement for protest costs, the contracting officer will determine whether the protest was sustained based on the awardee's negligent or intentional
misrepresentation. If the protest was sustained on several issues,
protest costs shall be apportioned according to the costs attributable
to the awardee's actions.
(ii) The contracting officer shall review the amount of the debt, degree of the awardee's fault, and costs of collection, to determine
whether a demand for reimbursement ought to be made. If it is in the
best interests of the Government to seek reimbursement, the contracting
officer shall notify the contractor in writing of the nature and amount
of the debt, and the intention to collect by offset if necessary. Prior
to issuing a final decision, the contracting officer shall afford the
contractor an opportunity to inspect and copy agency records pertaining
to the debt to the extent permitted by statute and regulation, and to
request review of the matter by the head of the contracting activity.
(iii) When appropriate, the contracting officer shall also refer
the matter to the agency debarment official for consideration under
Subpart 9.4.
* * * * *
6. Section 33.104 is amended by adding paragraph (h)(7) to read as
follows:
33.104 Protests to GAO.
* * * * *
(h) * * *
(7) If the Government pays costs, as provided in paragraph (h)(1) of this section, where a postaward protest is sustained as the result
of an awardee's intentional or negligent misstatement,
misrepresentation, or miscertification, the Government may require the
awardee to reimburse the Government the amount of such costs. In
addition to any other remedy available, and pursuant to the
requirements of Subpart 32.6, the Government may collect this debt by
offsetting the amount against any payment due the awardee under any
contract between the awardee and the Government.
7. Section 33.105 is amended by adding paragraph (g)(5) to read as
follows:
33.105 Protests to GSBCA.
* * * * *
(g) * * *
(5) If the Government pays costs, as provided in paragraph (g)(1) of this section, where a postaward protest is sustained as the result of an awardee's intentional or negligent misstatement,
misrepresentation, or miscertification, the Government may require the
awardee to reimburse the Government the amount of such costs. In
addition to any other remedy available, and pursuant to the
requirements of Subpart 32.6, the Government may collect this debt by
offsetting the amount against any payment due the awardee under any
contract between the awardee and the Government.
* * * * *
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
8. Section 52.233-3 is amended by adding paragraph (f) to read as
follows:
52.233-3 Protest after Award.
* * * * *
Protest After Award (Oct 1995)
* * * * *
(f) If, as the result of the Contractor's intentional or
negligent misstatement, misrepresentation, or miscertification, a
protest related to this contract is sustained, and the Government
pays costs, as provided in FAR 33.102(b)(2), 33.104(h)(1), or
33.105(g)(1), the Government may require the Contractor to reimburse
the Government the amount of such costs. In addition to any other
remedy available, and pursuant to the requirements of Subpart 32.6,
the Government may collect this debt by offsetting the amount
against any payment due the Contractor under any contract between
the Contractor and the Government.
(End of clause)
(End of FAC 90-32)
