fac90_39

FAC 90-39

Department of Defense General Services Administration National Aeronautics and Space Administration

48 CFR Ch. 1 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 39 Introduction

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

ACTION: Summary presentation of final and interim rules with request for comment.

SUMMARY: This document summarizes the Federal Acquisition Regulation (FAR) rules which follow it in the order listed below. The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council are issuing Federal Acquisition Circular (FAC) 90 39 to amend the FAR.

DATES: For effective dates and comment dates, see separate documents which follow. Please cite FAC 90 39 and the appropriate FAR case number(s) in all correspondence related to the following documents.

FOR FURTHER INFORMATION CONTACT: The analyst whose name appears (in the table below) 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 39 and specific FAR case number(s).

SUPPLEMENTARY INFORMATION: Federal Acquisition Circular 90 39 amends the Federal Acquisition Regulation (FAR) as specified below:

Item Subject FAR case

Analyst

I ...... Double-Sided Copying ................... 92 050

De Stefano.

II ..... National Industrial Security Program

Operating Manual (NISPOM) .............. 95 004

O Neill.

III .... Justification and Approval Thresholds .. 96 302

De Stefano.

IV ..... Implementation of Memorandum of Understanding

Between the United States of America and the

European Economic Community on Government

Procurement and Sanctions Imposed on the

European Community.......................93 606

O Such.

V ...... Postponement of Bid Openings or Closing

Dates .................................. 91 095

De Stefano.

VI ..... Armed Services Pricing Manual........... 95 027

Olson.

VII .... Predetermined Indirect Cost Rates ...... 94 011

De Stefano.

VIII ... Small Business Size Standards .......... 94 600

Klein.

IX ..... Master Subcontracting Plans.............. 92 039

Klein.

X ...... Small Business Competitiveness

Demonstration Program ................... 92 302

Klein.

XI ..... Use of Convict Labor .................... 93 615

O Neill.

XII .... Ozone Executive Order ................... 93 307

De Stefano.

XIII ... Uruguay Round (1996 Code) 95 304

O Such.

XIV .... Implementation of the North American Free

Trade Agreement Implementation Act ...... 93 310

O Such.

XV ..... Caribbean Basin Countries ............... 95 030

O Such.

XVI .... Fluctuating Exchange Rates .............. 92 048

O Such.

XVII.... Irrevocable Letters of Credit and

Alternatives to Miller Act Bonds ........ 95 301

O Neill.

XVIII... Part 31 Agency Supplements .............. 94 606

Olson.

XIX .... Records Retention ....................... 93 020

Olson.

XX ..... Legislative Lobbying Costs .............. 93 006

Olson.

XXI .... Travel Costs ............................ 93 022

Olson

XXII ... Prompt Payment Overseas ................. 92 046

Olson.

XXIII... Alternate Dispute Resolution/Federal

Courts Administration Act ........ 91 062/92 301

O Neill.

XXIV ... Defense Production Act Amendments ....... 93 304

O Neill.

XXV .... Child Care Services ..................... 91 106

Klein.

XXVI ... Quick-Closeout Procedures ............... 95 009

Klein.

XXVII... Quality Assurance Actions Electronic

Screening ............................... 92 031

Klein.

XXVIII.. Quality Assurance Nonconformances ....... 92 027

Klein.

XXIX.... Solicitation Provisions Contract Clauses. 95 603

O Neill.

XXX..... Contract Award Sealed Bidding Construction91 031

O Neill.

XXXI.... Small Business Innovation Research Rights

in Data ................................. 93 305

O Neill.

XXXII... Inspection Clauses Fixed Price .......... 92 001

Klein

XXXIII.. Termination for Convenience ............. 91 102

Klein.

N/A .... Corrections and Technical Amendments

(1) Revision to FAR Utility Matrix (Loose-

leaf edition only) ...................... 92 617

O Such.

(2) Table of Standard Forms and OMB

Expiration Dates ........................ N/A

N/A.

Item I Double-Sided Copying (FAR Case 92 050)

The interim rule published as Item I of FAC 90 27, and amended by Item III of FAC 90 29, is revised and finalized. The interim rule added FAR Subpart 4.3 and a clause at 52.204 4 to encourage offerors and contractors to maximize the use of double-sided copying on recycled paper, in accordance with Executive Order 12873. FAC 90 29 amended FAR 4.304 to eliminate the requirement for use of the clause at 52.204 4 in acquisitions at or below the simplified acquisition threshold. The final rule contains additional changes at 4.301 and 52.204 4 to implement Executive Order 12995, which amended Executive Order 12873 to revise the minimum recycled content standards for printing and writing paper.

Item II National Industrial Security Program Operating Manual (NISPOM) (FAR Case 95 004)

This final rule amends FAR Subparts 4.4 and 27.2 and the clause at 52.204 2 to (1) replace references to the Defense Industrial Security Program with references to the National Industrial Security Program ; and (2) replace references to the DoD Industrial Security Manual for Safeguarding Classified Information with references to the National Industrial Security Program Operating Manual. The National Industrial Security Program has been established in accordance with Executive Order 12829.

Item III Justification and Approval Thresholds (FAR Case 96 302) This final rule amends FAR 6.304 to implement Section 4102 of the Fiscal Year 1996 Defense Authorization Act (Public Law 104 106). Section 4102 amends 10 U.S.C. 2304(f)(1)(B) and 41 U.S.C. 253(f)(1)(B) to raise the dollar thresholds at which approval for the use of other than full and open competition must be obtained from the competition advocate, the head of the procuring activity, or the senior procurement executive. Section 4102 provides for approval of the justification for other than full and open competition by (1) the competition advocate, for proposed contracts over $500,000, but not exceeding $10,000,000; (2) the head of the procuring activity, or designee, for proposed contracts over $10,000,000, but not exceeding $50,000,000; and (3) the senior procurement executive, for proposed contracts over $50,000,000.

Item IV Implementation of Memorandum of Understanding Between the United States of America and the European Economic Community on Government Procurement and Sanctions Imposed on the European Community (FAR Case 93 606) The interim rule published in FAC 90 18, and amended in FACs 90 19 and 90 36, is converted to a final rule without change. The rule amended FAR Parts 14, 15, 17, 25, and 52 to (1) implement Executive Order 12849 which, based on a Memorandum of Understanding between the United States and the European Community, waives the Buy American Act in certain situations; and (2) implement certain trade sanctions imposed on the European Community.

Item V Postponement of Bid Openings or Closing Dates (FAR Case 91 095) This final rule amends FAR 14.402 3, and 15.412 and the provisions at 52.214 7, 52.214 23, 52.214 32, 52.214 33, 52.215 10, and 52.215 36 to clarify policy regarding rescheduling of the time for receipt of bids or proposals when an emergency or unanticipated event interrupts normal processes at a Government installation. An editorial revision is made at 15.411(a).

Item VI Armed Services Pricing Manual (FAR Case 95 027) This final rule amends FAR 15.805 1 to replace the Armed Services Pricing Manual, as the reference guide for pricing and negotiation personnel, with five desk references jointly prepared by the Air Force Institute of Technology and the Federal Acquisition Institute.

Item VII Predetermined Indirect Cost Rates (FAR Case 94 011) This final rule amends FAR 42.705 3 and the clause at 52.216 15 to implement revisions to OMB Circular A 21 that permit predetermined indirect cost rates for educational institutions to be established for periods of up to four years. An editorial revision is made at 16.307(I).

Item VIII Small Business Size Standards (FAR Case 94 600) This final rule revises the table at FAR 19.102 to reflect size standards published by the Small Business Administration.

Item IX Master Subcontracting Plans (FAR Case 92 039) This final rule amends FAR 19.704 and the clause at 52.219 9 to permit master subcontracting plans to be written for a three-year period, and to emphasize that it is incumbent upon contractors to maintain and update master plans.

Item X Small Business Competitiveness Demonstration Program (FAR Case 92 302) The interim rule published as

Item XIII of FAC 90 23 is converted to a final rule without change. The rule amended FAR Subpart 19.10 to (1) extend the Small Business Competitiveness Demonstration Program through September 30, 1996; (2) specify that agencies may reinstate the use of small business set-asides as necessary to meet assigned goals, but only within the organizational unit(s) that failed to meet the small business goals; and (3) revise the description of architectural and engineering services as a designated industry group.

Item XI Use of Convict Labor (FAR Case 93 615) This final rule amends FAR Subpart 22.2 and the clause at 52.222 3 to reflect changes in the statutory restrictions on employment of convict labor in the performance of Government contracts. The amendments (1) remove all references to 18 U.S.C. 4082(c)(2), which now only applies to offenses committed prior to November 1, 1987; (2) reflect the addition of the Commonwealth of the Northern Mariana Islands to the jurisdictions covered by Executive Order 11755; and (3) include further information regarding the requirements of Executive Order 11755, as amended by Executive Order 12608.

Item XII Ozone Executive Order (FAR Case 93 307) The interim rule published as

Item III of FAC 90 27 is revised and finalized. The rule implements Executive Order 12843 and Environmental Protection Agency Clean Air Act regulations (40 CFR Part 82). The final rule differs from the interim rule in that it (1) amends FAR Subpart 23.8 and the clause at 52.223 11 to replace the definitions of class I substance and class II substance with a definition of ozone-depleting substance ; and (2) amends the clause at 52.223 11 to clarify that labeling of ozone-depleting substances shall be in accordance with 42 U.S.C. 7671j and 40 CFR Part 82.

Item XIII Uruguay Round (1996 Code) (FAR Case 95 304) The interim rule published in FAC 90 36 is converted to a final rule without further change. The rule amends FAR Parts 25 and 52 to implement the renegotiated Government Procurement Agreement (1996 Code) (Uruguay Round). This agreement is implemented in statute by the Uruguay Round Agreement Act, Public Law 103 465, which amends the Trade Agreements Act of 1979 (19 U.S.C. 2501 2582).

Item XIV Implementation of the North American Free Trade Agreement Implementation Act (FAR Case 93 310) This interim rule amends the rule published in FAC 90 19 to implement the North American Free Trade Agreement (NAFTA) Implementation Act. This interim rule (1) adds language at FAR 25.402(g) to address the applicability of NAFTA to the acquisition of services; (2) adds language at 27.208 to address the use of patented technology when the patent holder is from a NAFTA country; (3) amends the provision at 52.225 20 to clarify procedures for evaluation of offers; (4) adds an alternate to the provision at 52.225 20 and the clause at 52.225 21 for use in acquisitions between $25,000 and $50,000; and (5) adds a new clause at 52.225 22 for use in construction contracts awarded outside the United States with an estimated value of $6,500,000 or more.

Item XV Caribbean Basin Countries (FAR Case 95 030) This final rule amends FAR 25.402(b) to reflect the U.S. Trade Representative s extension, through September 30, 1996, of the designation of Caribbean Basin products as eligible products under the Trade Agreements Act.

Item XVI Fluctuating Exchange Rates (FAR Case 92 048) This final rule revises FAR 25.501 and adds a new provision at 52.225 4 to address procedures for evaluation of offers priced in a foreign currency.

Item XVII Irrevocable Letters of Credit and Alternatives to Miller Act Bonds (FAR Case 95 301) This interim rule amends FAR Part 28 and the clause at 52.228 2, and adds new clauses at 52.228 13 and 52.228 14 to (1) provide for use of irrevocable letters of credit as an alternative to corporate or individual sureties as security for Miller Act bonds on construction contracts exceeding $100,000; and (2) provide alternative payment protections for construction contracts between $25,000 and $100,000, which are no longer subject to the Miller Act, in accordance with Section 4104(b) of the Federal Acquisition Streamlining Act of 1994 (Public Law 103 355).

Item XVIII Part 31 Agency Supplements (FAR Case 94 606) This final rule amends FAR 31.101 to remove the requirement for Civilian Agency Acquisition Council approval of agency supplements to FAR Part 31. Approval requirements for class deviations from Part 31 remain unchanged.

Item XIX Records Retention (FAR Case 93 020) This final rule amends the cost principle at 31.201 2 to explicitly state that contractors must maintain adequate cost records in order to be reimbursed for costs claimed.

Item XX Legislative Lobbying Costs (FAR Case 93 006) This final rule amends FAR 31.205 22, and deletes 31.205 50, to clarify the cost principle pertaining to legislative lobbying costs.

Item XXI Travel Costs (FAR Case 93 022) This final rule amends the cost principle at FAR 31.205 46 to specify the documentation required to support travel costs incurred by contractors under Government contracts. These documentation requirements are consistent with similar requirements already imposed by Section 274 of the Internal Revenue Code for travel costs claimed for Federal tax purposes.

Item XXII Prompt Payment Overseas (FAR Case 92 046) The interim rule published as

Item XIII of FAC 90 20, and further amended by Item III of FAC 90 29, is converted to a final rule without change. The rule amended FAR 32.901 and the clauses at 52.232 25, 52.232 26, and 52.232 27 to reflect the applicability of the Prompt Payment Act to contracts awarded and performed outside the United States.

Item XXIII Alternate Dispute Resolution/Federal Courts Administration Act (FAR Cases 91 062 and 92 301) The interim rules are converted to final rules without change. The rules were published as Item XIV of FAC 90 20 and Item III of FAC 90 10. The rules amend the claim certification procedures and the Alternative Means of Dispute Resolution (ADR) procedures in FAR Part 33, and implement section 907(a) of the Federal Courts Administration Act of 1992 (Public Law 102 572).

Item XXIV Defense Production Act Amendments (FAR Case 93 304) The interim rule published as Item XXIV of FAC 90 23 is converted to a final rule without change. The rule added FAR Subpart 34.1 and a clause at 52.234 1 to provide policy and procedures for the testing, qualification, and use of industrial resources manufactured or developed with assistance provided under Title III of the Defense Production Act of 1950.

Item XXV Child Care Services (FAR Case 91 106) The interim rule published as Item XXVII of FAC 90 23 is converted to a final rule without change. The rule amended FAR Subpart 37.1 to require contracting officers to ensure that contracts for child care services include requirements for criminal history background checks of employees in accordance with 42 U.S.C. 13041.

Item XXVI Quick-Closeout Procedures (FAR Case 95 009) This final rule amends FAR 42.708 and the clauses at 52.216 7 and 52.216 13 to permit maximum use of quick contract closeout procedures. The rule (1) permits use of quick closeout procedures if total unsettled indirect costs allocable to any one contract do not exceed $1,000,000; (2) and permits contracting officers to waive the 15 percent restriction on unsettled indirect costs, based upon a risk assessment that considers certain factors.

Item XXVII Quality Assurance Actions Electronic Screening (FAR Case 92 031) This final rule amends FAR 46.101 to add definitions of latent defect and patent defect.

Item XXVIII Quality Assurance Nonconformances (FAR Case 92 027) This final rule amends FAR Subpart 46.1 to provide standard terminology and guidance pertaining to supplies and services that do not meet contract requirements.

Item XXIX Solicitation Provisions Contract Clauses (FAR Case 95 603) This final rule amends the provision at FAR 52.211 1 to delete the statement that copies of specifications may be obtained from General Services Administration Business Service Centers. Specifications are no longer available from these centers.

Item XXX Contract Award Sealed Bidding Construction (FAR Case 91 031) This final rule amends the provision at FAR 52.214 19 to advise offerors that, for construction solicitations, the Government may reject bids as nonresponsive if the prices are materially unbalanced. This amendment is consistent with the existing language in the provisions at 52.214 10 and 52.215- 16, which are used in solicitations for other than construction.

Item XXXI Small Business Innovation Research Rights in Data (FAR Case 93 305) The interim rule published as Item XIX of FAC 90 20 is converted to a final rule without change. The rule amended the clause at FAR 52.227 20 to increase a small business concern s data rights retention period from two to four years, in accordance with the Small Business Innovation Research Program Policy Directive published by the Small Business Administration. 31615 Federal Register / Vol. 61, No. 120 / Thursday, June 20, 1996 / Rules and Regulations Item XXXII Inspection Clauses Fixed Price (FAR Case 92 001) This final rule amends the clauses at FAR 52.246 2, 52.246 4, 52.246 7, 52.246 12, and 52.246 13 to replace the phrase without additional charge with the phrase at no increase in contract price for clarity.

Item XXXIII Termination for Convenience (FAR Case 91 102) This final rule amends the clause at 52.249 2 to clarify language pertaining to settlement of contract termination costs and rights of appeal under the Disputes clause. Corrections and Technical Amendments (Loose-leaf edition only)

Revisions to FAR Utility Matrix (FAR Case 92 617)

Section 52.301, Solicitation provisions and contract clauses (Matrix), is amended in the Utility Services column. The matrix is not carried in the Code of Federal Regulations and, therefore, not published in the Federal Register. Subscribers to the loose-leaf edition will receive matrix changes in FAC 90 39.

Table of Standard Forms and OMB Expiration Dates Under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Federal Acquisition Regulation (FAR) Secretariat has obtained Office of Management and Budget (OMB) clearance of all information collection requirements contained in the FAR. In lieu of reissuing Standard and Optional Forms to reflect extended OMB approval dates, and to reduce costs of reprinting forms, FAR users should make appropriate pen-and-ink changes on any listed forms containing expiration dates that differ from the entries published below:

TABLE OF STANDARD FORMS AND OMB EXPIRATION DATES

Standard form Edition OMB control No. Expiration date

SF 24 ... Rev. 1/90 ........ 9000 0045 9/30/98

SF 25 ... Rev. 1/90 ........ 9000 0045 9/30/98

SF 25A Rev. 1/90 ........ 9000 0045 9/30/98

SF 25B Rev. 10/83 ....... 9000 0045 9/30/98

SF 28 ... Rev. 1/90 ........ 9000 0001 9/30/98

SF 34 ... Rev. 1/90 ........ 9000 0045 9/30/98

SF 35 ... Rev. 1/90 ........ 9000 0045 9/30/98

SF 119 Rev. 1/90 ........ 9000 0003 9/30/98

SF 129 Rev. 6/90 ........ 9000 0002 10/31/97

SF 254 Rev. 11/92 ....... 9000 0004 3/31/99

SF 255 Rev. 11/92 ....... 9000 0005 4/30/99

SF 273 Rev. 8/90 ........ 9000 0045 9/30/98

SF 274 Rev. 8/90 ........ 9000 0045 9/30/98

SF 275 Rev. 8/90 ........ 9000 0045 9/30/98

SF 294 Rev. 10/95 ....... 9000 0006 3/31/98

SF 295 Rev. 10/95 ....... 9000 0007 3/31/98

SF 1403 Rev. 9/88 ........ 9000 0011 10/31/97

SF 1404 Rev. 9/88 ........ 9000 0011 10/31/97

SF 1405 Rev. 9/88 ........ 9000 0011 10/31/97

SF 1406 Rev. 9/88 ........ 9000 0011 10/31/97

SF 1407 Rev. 9/88 ........ 9000 0011 10/31/97

SF 1408 Rev. 9/88 ........ 9000 0011 10/31/97

SF 1411 Rev. 10/95 ....... 9000 0013 9/30/98

SF 1413 Rev. 6/89 ........ 9000 0014 4/30/98

SF 1416 Rev. 1/90 ........ 9000 0045 9/30/98

SF 1417 Rev. 8/90 ........ 9000 0037 9/30/98

SF 1423 Rev. 12/88 ....... 9000 0015 5/31/98

SF 1424 Rev. 7/89 ........ 9000 0015 5/31/98

SF 1426 Rev. 7/89 ........ 9000 0015 5/31/98

SF 1427 Rev. 7/89 ........ 9000 0015 5/31/98

SF 1428 Rev. 7/89 ........ 9000 0015 5/31/98

SF 1429 Rev. 7/89 ........ 9000 0015 5/31/98

SF 1430 Rev. 7/89 ........ 9000 0015 5/31/98

SF 1431 Rev. 7/89 ........ 9000 0015 5/31/98

SF 1432 Rev. 7/89 ........ 9000 0015 5/31/98

SF 1433 Rev. 7/89 ........ 9000 0015 5/31/98

SF 1434 Rev. 7/89 ........ 9000 0015 5/31/98

SF 1435 Rev. 7/89 ........ 9000 0012 5/31/98

SF 1436 Rev. 7/89 ........ 9000 0012 5/31/98

SF 1437 Rev. 7/89 ........ 9000 0012 5/31/98

SF 1438 Rev. 7/89 ........ 9000 0012 5/31/98

SF 1439 Rev. 7/89 ........ 9000 0012 5/31/98

SF 1440 Rev. 7/89 ........ 9000 0012 5/31/98

SF 1443 Rev. 10/82 ....... 9000 0010 8/31/96

SF 1444 Rev. 10/87 ....... 9000 0089 4/30/99

SF 1445 Rev. 10/87 ....... 9000 0089 4/30/99

SF 1446 Rev. 10/87 ....... 9000 0089 4/30/99

SF 1448 10/95 edition .... 9000 0013 9/30/98

SF 1449 10/95 edition .... 9000 0136 9/30/98

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division.

Federal Acquisition Circular Number 90 39

Federal Acquisition Circular (FAC) 90 39 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, all Federal Acquisition Regulation (FAR) and other directive material contained in FAC 90 39 is effective August 19, 1996, except for Item XV which was effective September 30, 1995, and Items I, IV, VI, VIII, X, XII through XIV, XVII, XXII through XXV, and XXXI, which are effective June 20, 1996.

Dated: May 16, 1996. Eleanor R. Spector, Director, Defense Procurement. Dated: May 16, 1996. Ida M. Ustad, Deputy Associate Administrator for Acquisition Policy, General Services Administration.

Dated: May 6, 1996. L.W. Bailets, Acting Associate Administrator for Procurement National Aeronautics and Space Administration.

[FAC 90 39; FAR Case 92 050; Item I] Federal Acquisition Regulation; Double-Sided Copying

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

ACTION: Interim rule adopted as final with changes.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed to a final rule which amends the Federal Acquisition Regulation (FAR) to encourage contractors to maximize the use of double-sided copying on recycled paper when submitting written documents related to an acquisition. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: June 20, 1996.

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 39, FAR case 92 050.

SUPPLEMENTARY INFORMATION:

A. Background These revisions are based on a portion of Executive Order 12873, Federal Acquisition, Recycling, and Waste Prevention, dated October 20, 1993 (58 FR 54911), which encourages the use of double-sided copying on recycled paper for documents printed within the Government and under Government contracts.

An interim rule was published in the Federal Register at 60 FR 28493, May 31, 1995, as Item I, FAC 90 27. This interim rule amended FAR Part 4 to add a new subpart 4.3 Paper Documents, and amended FAR Part 52 to add a clause at 52.204 4, Printing/Copying Double-Sided on Recycled Paper. An additional amendment to section 4.304 was published at 60 FR 34744 on July 3, 1995, to eliminate the requirement for use of the clause at 52.204 4 in solicitations and contracts valued at or below the simplified acquisition threshold. Further amendments have been made in the final rule to implement Executive Order 12995 of March 25, 1996 (61 FR 13645, March 28, 1996), which amended Executive Order 12873 to revise the minimum content standards for printing and writing paper.

Seven comments from six sources were received in response to the interim rule. All comments were considered in developing the final rule.

B. Regulatory Flexibility Act

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose record keeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 4 and 52

Government procurement.

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division.

Interim Rule Adopted as Final With Changes Accordingly, the interim rule amending CFR Parts 4 and 52, which was published at 60 FR 28493, May 31, 1995 (FAC 90 27, Item I), and amended at 60 FR 34744, July 3, 1995, is adopted as a final rule with amendments at sections 4.301 and 52.204 4.

1. The authority citation for 48 CFR Parts 4 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 4 ADMINISTRATIVE MATTERS

4.301 [Amended]

2. Section 4.301 is amended by removing the period at the end of the sentence and inserting in its place , as amended by Executive Order 12995, March 25, 1996.

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

3. Section 52.204 4 is amended by revising the date of the clause to read (JUN 1996) ; in paragraph (a) of the clause by inserting after October 20, 1993, the phrase as amended by Executive Order 12995, dated March 25, 1996, ; revising 20% to read 20 percent ; and by revising paragraph (b) to read as follows:

52.204 4 Printing/Copying Double-Sided on Recycled Paper.

* * * * *

PRINTING/COPYING DOUBLE-SIDED RECYCLED PAPER (JUN 1996)

* * * * *

(b) The 20 percent standard applies to high-speed copier paper, offset paper, forms bond, computer printout paper, carbonless paper, file folders, white woven envelopes, and other uncoated printed and writing paper, such as writing and office paper, book paper, cotton fiber paper, and cover stock. An alternative to meeting the 20 percent postconsumer material standard is 50 percent recovered material content of certain industrial by-products.

(End of clause)

48 CFR Parts 4, 27, and 52

[FAC 90 39; FAR Case 95 004; Item II]

Federal Acquisition Regulation; National Industrial Security Program Operating Manual (NISPOM)

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) to reflect the applicability of the National Industrial Security Program Operating Manual (NISPOM). The NISPOM updates and replaces the DOD Industrial Security Manual for Safeguarding Classified Information (DOD 5220.22 M). This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 1996.

FOR FURTHER INFORMATION CONTACT: Mr. Jack O Neill at (202) 501 3856 in reference to this FAR case. For general information, contact the FAR Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501 4755. Please cite FAC 90 39, FAR case 95 004.

SUPPLEMENTARY INFORMATION:

A. Background

The National Industrial Security Program was established by Executive Order 12829, National Industrial Security Program (58 FR 3479). Section 201 of the Executive order directs the Secretary of Defense, in consultation with all affected agencies and with the concurrence of the Secretary of Energy, the Chairman of the Nuclear Regulatory Commission, and the Director of Central Intelligence, to issue and maintain a National Industrial Security Program Operating Manual.

B. Regulatory Flexibility Act

This final rule does not constitute a significant FAR revision within the meaning of FAR 1.501 and Public Law 98 577, and publication for public comment is not required. Therefore, the Regulatory Flexibility Act does not apply. However, comments from small entities concerning the affected FAR subparts will be considered in accordance with 5 U.S.C. 610. Such comments must be submitted separately and cite 5 U.S.C. 601, et seq. (FAC 90 39, FAR case 95 004), in correspondence.

C. Paperwork Reduction Act

List of Subjects in 48 CFR Parts 4, 27, and 52

Government procurement.

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 4, 27, and 52 are amended as set forth below:

1. The authority citation for 48 CFR Parts 4, 27, 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 4 ADMINISTRATIVE MATTERS 2. Section 4.402 is amended by revising paragraphs (a) and (b); and in paragraph by removing Section VIII of the ISR and inserting in its place Chapter 10 of the NISPOM . The revised text reads as follows:

4.402 General.

(a) Executive Order 12829, January 6, 1993 (58 FR 3479, January 8, 1993), entitled National Industrial Security Program (NISP), establishes a program to safeguard Federal Government classified information that is released to contractors, licensees, and grantees of the United States Government. Executive Order 12829 amends Executive Order 10865, February 20, 1960 (25 FR 1583, February 25, 1960), entitled Safeguarding Classified Information Within Industry, as amended by Executive Order 10909,January 17, 1961 (26 FR 508, January 20, 1961).

(b) The National Industrial Security Program Operating Manual (NISPOM) incorporates the requirements of these Executive Orders. The Secretary of Defense, in consultation with all affected agencies and with the concurrence of the Secretary of Energy, the Chairman of the Nuclear Regulatory Commission, and the Director of Central Intelligence, is responsible for issuance and maintenance of this Manual. The following DOD publications implement the program:

(1) National Industrial Security Program Operating Manual (NISPOM) (DOD 5220.22 M).

(2) Industrial Security Regulation (ISR) (DOD 5220.22 R).

* * * * *

4.403 and 4.404 [Amended]

3. Section 4.403 is amended in paragraphs (a)(1)(I), (b)(1), (c)(1), and (c)(2), by revising DISP to read NISP ; and section 4.403(c)(1) is amended in the last sentence by removing Section VII of .

3a. Section 4.404(d) is amended by revising DISP to read NISP .

PART 27 PATENTS, DATA, AND COPYRIGHTS

27.207 1 [Amended]

4. Section 27.207 1 is amended in the second sentence of paragraph (b) by removing Department of Defense Industrial Security Manual for Safeguarding Classified Security Information and inserting in its place National Industrial Security Program Operating Manual .

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

52.204 2 [Amended]

5. Section 52.204 2 is amended by revising the introductory paragraph to read as set forth below; by revising the date of the clause to read (AUG 1996) ; and in paragraph (b)(1) of the clause by removing Department of Defense Industrial Security Manual for Safeguarding Classified Information and inserting in its place National Industrial Security Program Operating Manual . The revised text reads as follows:

52.204 2 Security requirements.

As prescribed in 4.404(a), insert the following clauses:

* * * * *

48 CFR Part 6

[FAC 90 39; FAR Case 96 302; Item III]

Federal Acquisition Regulation; Justification and Approval Thresholds

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) to raise the dollar thresholds pertaining to approval for the use of other than full and open competition in the acquisition process. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 1996.

SUPPLEMENTARY INFORMATION:

A. Background Section 4102 of the Fiscal Year 1996 Defense Authorization Act (Public Law 104 106) amends 10 U.S.C. 2304(f)(1)(B) and 41 U.S.C. 253(f)(1)(B) to raise the dollar thresholds at which approval for the use of other than full and open competition must be obtained from the competition advocate, the head of the procuring activity, or the senior procurement executive. Section 4102 provides for approval of the justification for other than full and open competition by (1) the competition advocate, for proposed contracts over $500,000, but not exceeding $10,000,000; (2) the head of the procuring activity, or designee, for proposed contracts over $10,000,000, but not exceeding $50,000,000; and (3) the senior procurement executive, for proposed contracts over $50,000,000.

B. Regulatory Flexibility Act The final rule does not constitute a significant FAR revision within the meaning of FAR 1.501 and Public Law 98 577, and publication for public comments is not required. Therefore, the Regulatory Flexibility Act does not apply. However, comments from small entities concerning the affected subpart will be considered in accordance with 5 U.S.C. 610. Such comments must be submitted separately and cite 5 U.S.C. 601, et seq. (FAC 90 39, FAR case 96 302), in correspondence.

C. Paperwork Reduction Act

List of Subjects in 48 CFR Part 6

Government procurement.

Dated: June 4, 1996. Edward C. Loeb, Director, Federal Acquisition Policy Division. Therefore, 48 CFR Part 6 is amended as set forth below:

PART 6 COMPETITION REQUIREMENTS

1. The authority citation for 48 CFR Part 6 continues to read as follows: Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).

2. Section 6.304 is amended in paragraph (a)(1) by revising $100,000 to read $500,000 ; in (a)(2) by revising $100,000 to read $500,000 and $1,000,000 to read $10,000,000 ; in (a)(3) introductory text by revising $1,000,000 to read $10,000,000 and $10,000,000 to read $50,000,000 ; and revising (a)(4) to read as follows:

6.304 Approval of the justification.

(a) * * *

(4) For a proposed contract over $50,000,000, by the senior procurement executive of the agency designated pursuant to the OFPP Act (41 U.S.C. 414(3)) in accordance with agency procedures. This authority is not delegable except in the case of the Under Secretary of Defense (Acquisition and Technology), acting as the senior procurement executive for the Department of Defense.

* * * * *

48 CFR Parts 14, 15, 17, 25, and 52

[FAC 90 39; FAR Case 93 606; Item IV]

Federal Acquisition Regulation; Implementation of Memorandum of Understanding Between the United States of America and the European Economic Community on Government Procurement and Sanctions Imposed on the European Community

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

ACTION: Interim rule adopted as final.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) to implement the Memorandum of Understanding Between the United States of America and the European Economic Community on Government Procurement (MOU) and to implement the sanctions imposed by the President on the European community (EC) prohibiting the award of certain contracts for EC products, services, and construction. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: June 20, 1996.

FOR FURTHER INFORMATION CONTACT: Mr. Peter O Such at (202) 501 1759 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 39, FAR case 93 606.

SUPPLEMENTARY INFORMATION:

A. Background An interim rule was published in the Federal Register on May 28, 1993 (58 FR 31140) (FAC 90 18). Revisions based on the analysis of public comments were incorporated in the interim rule published in FAC 90 19 as part of the implementation of the North American Free Trade Agreement Implementation Act (FAR case 93 310) (59 FR 544, January 5, 1994). The rule was further amended by an interim rule published in FAC 90 36 to implement the Uruguay Round Agreement Act (FAR case 95 304) (60 FR 67514, December 29, 1995).

B. Regulatory Flexibility Act

The Regulatory Flexibility Act, 5 U.S.C. 601, et seq., applies to this final rule, and a Final Regulatory Flexibility Analysis has been performed. A copy of the analysis may be obtained from the FAR Secretariat.

C. Paperwork Reduction Act

List of Subjects in 48 CFR Parts 14, 15, 17, 25, and 52

Government procurement.

Interim Rule Adopted as Final

Accordingly, the interim rule amending 48 CFR Parts 14, 15, 17, 25, and 52, which was published at 58 FR 31140, May 28, 1993, and amended at 59 FR 544, January 5, 1994, and 60 FR 67514, December 29, 1995, is adopted as final without further change.

The authority citation for 48 CFR Parts 14, 15, 17, 25, 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). Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division.

48 CFR Parts 14, 15, and 52

[FAC 90 39; FAR Case 91 095; Item V]

Federal Acquisition Regulation; Postponement of Bid Openings or Closing Dates

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) to clarify the time for receipt of bids or proposals when an emergency or unanticipated event interrupts normal processes at a Government installation on the date scheduled for receipt of bids or proposals. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 1996.

SUPPLEMENTARY INFORMATION:

A. Background

A proposed rule was published in the Federal Register on November 9, 1993 (58 FR 59618). The proposed rule amended FAR 14.402 3, 15.411, 15.412, 52.214 7, and 52.215 10 to clarify policy regarding rescheduling of the time for receipt of bids or proposals when an emergency or unanticipated event interrupts normal Government processes and urgent requirements do not allow time to formally extend the bid opening or solicitation closing date. One substantive comment was received in response to the proposed rule. After evaluation of this comment, the Councils agreed to finalize the amendments in the proposed rule and to make similar clarifying amendments at FAR 52.214 23, 52.214 32, 52.214 33, and 52.215 36.

B. Regulatory Flexibility Act

C. Paperwork Reduction Act The Paperwork Reduction Act does not apply because the changes to the FAR do not impose record keeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 14, 15, and 52

Government procurement.

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division. Therefore, 48 CFR Parts 14, 15, and 52 are amended as set forth below:

1. The authority citation for 48 CFR Parts 14, 15, 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 14 SEALED BIDDING

2. Section 14.402 3 is amended by revising paragraph (c) to read as follows:

14.402 3 Postponement of openings.

* * * * *

(c) In the case of paragraph (a)(2) of this section, and when urgent Government requirements preclude amendment of the solicitation as prescribed in 14.208, the time specified for opening of bids will be deemed to be extended to the same time of day specified in the solicitation on the first work day on which normal Government processes resume. In such cases, the time of actual bid opening shall be deemed to be the time set for bid opening for the purpose of determining late bids under 14.304. A note should be made on the abstract of bids or otherwise added to the file explaining the circumstances of the postponement.

PART 15 CONTRACTING BY NEGOTIATION 3. Section 15.411 is amended by revising paragraph (a) to read as follows:

15.411 Receipt of proposals and quotations.

(a) The procedures for receipt and handling of proposals and quotations should be similar to those prescribed in 14.401. Proposals and quotations shall be marked with the date and time of receipt.

* * * * *

4. Section 15.412 is amended by revising paragraph (b) to read as follows:

15.412 Late proposals, modifications, and withdrawals of proposals.

* * * * *

(b) Offerors are responsible for submitting offers, and any modifications to them, so as to reach the Government office designated in the solicitation on time. If an emergency or unanticipated event interrupts normal Government processes so that proposals cannot be received at the office designated for receipt of proposals by the exact time specified in the solicitation, and urgent Government requirements preclude amendment of the solicitation closing date as usually prescribed by 15.410, the time specified for receipt of proposals will be deemed to be extended to the same time of day specified in the solicitation on the first work day on which normal Government processes resume. If no time is specified in the solicitation, the time for receipt is 4:30 p.m., local time, for the designated Government office on the date that proposals are due.

* * * * *

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

5. Section 52.214 7 is amended in the provision by revising the date in the heading and adding paragraph (h) to read as follows:

52.214 7 Late Submissions, Modifications, and Withdrawals of Bids.

* * * * *

Late Submissions, Modifications, and Withdrawals of Bids (Aug 1996)

* * * * *

(h) If an emergency or unanticipated event interrupts normal Government processes so as to cause postponement of the scheduled bid opening, and urgent Government requirements preclude amendment of the solicitation or other notice of an extension of the opening date, the time specified for receipt of bids will be deemed to be extended to the same time of day specified in the solicitation on the first work day on which normal Government processes resume. (End of provision)

6. Section 52.214 23 is amended in the provision by revising the date in the heading and adding paragraph (g) to read as follows:

52.214 23 Late Submissions, Modifications, and Withdrawals of Technical Proposals Under Two-Step Sealed Bidding.

* * * * *

Late Submissions, Modifications, and Withdrawals of Technical Proposals Under Two-Step Sealed Bidding (Aug 1996)

* * * * *

(g) If an emergency or unanticipated event interrupts normal Government processes so that technical proposals cannot be received at the office designated for receipt of technical proposals by the exact time specified in the solicitation, and urgent Government requirements preclude amendment of the solicitation or other notice of an extension of the closing date, the time specified for receipt of technical proposals will be deemed to be extended to the same time of day specified in the solicitation on the first work day on which normal Government processes resume. If no time is specified in the solicitation, the time for receipt is 4:30 p.m., local time, for the designated Government office.

(End of provision)

7. Section 52.214 32 is amended in the provision by revising the date in the heading and adding paragraph (f) to read as follows:

52.214 32 Late Submissions, Modifications, and Withdrawals of Bids (Overseas).

* * * * *

Late Submissions, Modifications, and Withdrawals of Bids (Overseas) (Aug 1996)

* * * * *

(f) If an emergency or unanticipated event interrupts normal Government processes so as to cause postponement of the scheduled bid opening, and urgent Government requirements preclude amendment of the solicitation or other notice of an extension of the opening date, the time specified for receipt of bids will be deemed to be extended to the same time of day specified in the solicitation on the first work day on which normal Government processes resume.

(End of provision)

8. Section 52.214 33 is amended in the provision by revising the date in the heading and adding paragraph (e) to read as follows:

52.214 33 Late Submissions, Modifications, and Withdrawals of Technical Proposals Under Two-Step Sealed Bidding (Overseas).

* * * * *

Late Submissions, Modifications, and Withdrawals of Technical Proposals Under Two-Step Sealed Bidding (Overseas) (Aug 1996)

* * * * *

(e) If an emergency or unanticipated event interrupts normal Government processes so that technical proposals cannot be received at the office designated for receipt of technical proposals by the exact time specified in the solicitation, and urgent Government requirements preclude amendment of the solicitation or other notice of an extension of the closing date, the time specified for receipt of technical proposals will be deemed to be extended to the same time of day specified in the solicitation on the first work day on which normal Government processes resume. If no time is specified in the solicitation, the time for receipt is 4:30 p.m., local time, for the designated Government office. (End of provision)

9. Section 52.215 10 is amended by revising the date in the heading of the provision, and adding paragraph (I) to read as follows:

52.215 10 Late Submissions, Modifications, and Withdrawals of Proposals.

* * * * *

Late Submissions, Modifications, and Withdrawals of Proposals (Aug 1996) * * * * *

(I) If an emergency or unanticipated event interrupts normal Government processes so that proposals cannot be received at the office designated for receipt of proposals by the exact time specified in the solicitation, and urgent Government requirements preclude amendment of the solicitation or other notice of an extension of the closing date, the time specified for receipt of proposals will be deemed to be extended to the same time of day specified in the solicitation on the first work day on which normal Government processes resume. If no time is specified in the solicitation, the time for receipt is 4:30 p.m., local time, for the designated Government office. (End of provision)

10. Section 52.215 36 is amended by revising the date in the heading of the provision, and adding paragraph (g) to read as follows:

52.215 36 Late Submissions, Modifications, and Withdrawals of Proposals (Overseas).

* * * * *

Late Submissions, Modifications, and Withdrawals of Proposals (Overseas) (Aug 1996)

* * * * *

(g) If an emergency or unanticipated event interrupts normal Government processes so that proposals cannot be received at the office designated for receipt of proposals by the exact time specified in the solicitation, and urgent Government requirements preclude amendment of the solicitation or other notice of an extension of the closing date, the time specified for receipt of proposals will be deemed to be extended to the same time of day specified in the solicitation on the first work day on which normal Government processes resume. If no time is specified in the solicitation, the time for receipt is 4:30 p.m., local time, for the designated Government office.

(End of provision)

48 CFR Part 15

[FAC 90 39; FAR Case 95 027; Item VI]

Federal Acquisition Regulation;

Armed Services Pricing Manual

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) to replace the Armed Services Pricing Manual, as the reference guide for pricing and negotiation personnel, with five desk references jointly prepared by the Air Force Institute of Technology and the Federal Acquisition This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: June 20, 1996.

FOR FURTHER INFORMATION CONTACT: Mr. Jeremy F. Olson at (202) 501 3221 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 39, FAR case 95 027.

SUPPLEMENTARY INFORMATION:

A. Background This final rule amends FAR 15.805 1 to replace the Armed Services Pricing Manual, as the reference guide for pricing and negotiation personnel, with five desk references jointly prepared by the Air Force Institute of Technology and the Federal Acquisition Institute.

B. Regulatory Flexibility Act

The final rule does not constitute a significant FAR revision within the meaning of FAR 1.501 and Public Law 98 577, and publication for public comments is not required. Therefore, the Regulatory Flexibility Act does not apply. However, comments from small entities concerning the affected FAR subpart will be considered in accordance with 5 U.S.C. 610. Such comments must be submitted separately and cite 5 U.S.C. 601, et seq. (FAC 90 39, FAR case 95 027), in correspondence.

C. Paperwork Reduction Act

List of Subjects in 48 CFR Part 15 Government procurement.

Dated: June 4, 1996. Edward C. Loeb, Director, Federal Acquisition Policy Division. Therefore, 48 CFR Part 15 is amended as set forth below:

1. The authority citation for 48 CFR Part 15 continues to read as follows:

PART 15 CONTRACTING BY NEGOTIATION

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).

2. Section 15.805 1 is amended by revising paragraph (d) to read as follows:

15.805 1 General.

* * * * *

(d) The Air Force Institute of Technology (AFIT) and the Federal Acquisition Institute (FAI) jointly prepared a series of five desk references to guide pricing and negotiation personnel. The five desk references are: Price Analysis, Cost Analysis, Quantitative Techniques for Contract Pricing, Advanced Issues in Contract Pricing, and Federal Contract Negotiation Techniques. The references provide detailed discussion and examples applying pricing policies to pricing problems. They are to be used for instruction and professional guidance. However, they are not directive and should be considered informational only. Copies of the desk references are available on CD ROM which also contains the FAR, the FIRMR, the FTR and various other regulatory and training materials. The CD ROM may be purchased by annual subscription (updated quarterly), or individually (reference List ID GSAFF, Stock No. 722 009 0000 2). The individual CD ROMs or subscription to the CD ROM may be purchased from the Superintendent of Documents, U.S. Government Printing Office, by telephone (202) 512 1800 or facsimile (202) 512 2550, or by mail order from the Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250 7954. Free copies of the desk references are available on the World Wide Web, Internet address: http://www.gsa.gov/staff/v/training.htm

48 CFR Parts 16, 42, and 52

[FAC 90 39; FAR Case 94 011; Item VII]

Federal Acquisition Regulation; Predetermined Indirect Cost Rates

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) to implement revisions to OMB Circular A 21 that permit predetermined indirect cost rates for educational institutions to be established for periods of up to four years. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 1996.

SUPPLEMENTARY INFORMATION:

A. Background

On July 26, 1993, the Office of Management and Budget published revisions to OMB Circular A 21 (58 FR 39996) which include an increase in the period of time for which predetermined indirect cost rates for educational institutions may be applicable. The FAR is amended to permit use of predetermined indirect cost rates for educational institutions for periods of up to four years, in accordance with OMB circular A 21.

B. Regulatory Flexibility Act

C. Paperwork Reduction Act

The final rule does not impose any additional information collection requirements which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq. However, a request for approval of an extension of the existing information collection requirement concerning 9000 0069, Indirect Cost Rates, is being submitted to the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 16, 42, and 52

Government Dated: June 4, 1996. Edward C. Loeb, Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 16, 42, and 52 are amended as set forth below:

1. The authority citation for 48 CFR Parts 16, 42, and 52 continues to read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).

PART 16 TYPES OF CONTRACTS 2. Section 16.307 is amended by adding a sentence to the end of paragraph (I) to read as follows:

16.307 Contract clauses.

* * * * *

(I) * * * If the contract is a facilities contract, modify paragraph by deleting the words Subpart 31.1 and substituting for them section 31.106.

PART 42 CONTRACT ADMINISTRATION

3. Section 42.705 3 is amended by revising paragraphs (b)(4)(I) and (b)(6) to read as follows:

42.705 3 Educational institutions.

* * * * *

(b) * * *

(4)(I) If predetermined rates are to be used and no rates have been previously established for the institution s current fiscal year, the agency shall obtain from the institution a proposal for predetermined rates.

* * * * *

(6) Predetermined indirect cost rates shall be applicable for a period of not more than four years. The agency shall obtain the contractor s proposal for new predetermined rates sufficiently in advance so that the new rates, based on current data, may be promptly negotiated near the beginning of the new fiscal year or other period agreed to by the parties (see paragraphs (b) and (d) of the clause at 52.216 15, Predetermined Indirect Cost Rates).

* * * * *

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

4. Section 52.216 15 is amended by revising the introductory text and date of the clause; in the first sentence of paragraph (b) by removing the comma after the word year and adding (or other period specified in the Schedule), ; in the second sentence by revising the word rate to read rates and removing the period at the end of the sentence and inserting in its place or other period specified in the Schedule. ; in the third sentence by revising the word Negotiations to read Negotiation ; revising paragraph (d)(3); and in paragraph (g) by inserting after the word year the parenthetical (or other period specified in the Schedule) . The revised text read as follows:

52.216 15 Predetermined Indirect Cost Rates.

As prescribed in 16.307(I), insert the following clause:

PREDETERMINED INDIRECT COST RATES (AUG 1996)

* * * * *

(d) * * *

(3) the period for which the rates apply, and

* * * * *

48 CFR Part 19 [FAC 90 39; FAR Case 94 600; Item VIII]

Federal Acquisition Regulation; Small Business Size Standards AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

SUMMARY: Amendments in this document will bring the Federal Acquisition Regulation into conformance with revised small business size standards published by the Small Business Administration (SBA). This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: June 20, 1996.

FOR FURTHER INFORMATION CONTACT: Ms. Linda Klein at (202) 501 3775. For general information, contact the FAR Secretariat, Room 4037, GS Building, Washington, DC 20405, (202) 501 4755. Please cite FAC 90 39 (FAR case 94 600).

SUPPLEMENTARY INFORMATION:

A. Background SBA has revised its size standards regulations at 13 CFR Part 121 (61 FR 3280, January 31, 1996), effective March 1, 1996. Corrections were published (61 FR 6412, February 20, 1996; 61 FR 7306, February 27, 1996; and 61 FR 7986, March 1, 1996). As a result, the table of Size Standards shown in the FAR at 19.102 has been revised to reflect the changes made by SBA through March 1996.

SBA currently has two size standards publications available via the Internet on SBA ONLINE. They are the table of Size Standards, which currently appears in the FAR, and a copy of 13 CFR 121, the Size Regulations, published in the Federal Register on January 31, 1996.

B. Regulatory Flexibility Act

These changes derive directly from SBAs regulations, without substantive change. Therefore, the final rule does not constitute a significant FAR revision within the meaning of FAR 1.501 and Public Law 98 577, and publication for public comments is not required. The Regulatory Flexibility Act does not apply. However, comments from small entities concerning the affected subpart will be considered in accordance with 5 U.S.C. 610. Such comments must be submitted separately and cite 5 U.S.C. 601, et seq. (FAC 90 39, FAR case 94 600), in correspondence.

C. Paperwork Reduction Act

List of Subjects in 48 CFR Part 19 Government procurement.

Dated: June 4, 1996. Edward C. Loeb, Director, Federal Acquisition Policy Division.

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

PART 19 SMALL BUSINESS PROGRAMS

1. The authority citation for 48 CFR Part 19 continues to read as follows: Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c). 2. Section 19.102 is amended by revising the table consisting of industry size standards and revising the footnotes to read as follows:

19.102 Size standards.

* * * * *

SIZE STANDARDS BY SIC INDUSTRY 3/96

SIC Description (N.E.C. = Not elsewhere classified) Size standards in number of employees or millions of dollars

See Footnotes on Menu Division A Agriculture, Forestry and Fishing

Major Group 01 Agricultural Production Crops

0111 Wheat $0.5

0112 Rice $0.5

0115 Corn $0.5

0116 Soybeans $0.5

0119 Cash Grains, N.E.C. $0.5

0131 Cotton $0.5

0132 Tobacco $0.5

0133 Sugarcane and Sugar Beets $0.5

0134 Irish Potatoes $0.5

0139 Field Crops, Except Cash

Grains, N.E.C. $0.5

0161 Vegetables and Melons $0.5

0171 Berry Crops $0.5

0172 Grapes $0.5

0173 Tree Nuts $0.5

0174 Citrus Fruits $0.5

0175 Deciduous Tree Fruits $0.5

0179 Fruits and Tree Nuts, N.E.C. $0.5

0181 Ornamental Floriculture

Nursery Products $0.5

0182 Food Crops Grown Under Cover $0.5

0191 General Farms, Primarily Crop $0.5

Major Group 02 Livestock and Animal Specialties

0211 Beef Cattle Feedlots (Custom) $1.5

0212 Beef Cattle, Except Feedlots $0.5

0213 Hogs $0.5

0214 Sheep and Goats $0.5

0219 General Livestock, Except Dairy

and Poultry Dairy Broiler, and

Roaster Chickens $0.5

0252 Chicken Eggs $9.0

0253 Turkeys and Turkey Eggs $0.5

0254 Poultry Hatcheries $0.5

0259 Poultry and Eggs, N.E.C. $0.5

0271 Fur-Bearing Animals and Rabbits $0.5

0272 Horses and Other Equines $0.5

0273 Animal Aquaculture $0.5

0279 Animal Specialties, N.E.C $0.5

0291 General Farms, Primarily Livestock

and $0.5

Animal Specialties

Major Group 07 Agricultural Services

0711 Soil Preparation Services $5.0

0721 Crop Planting, Cultivating, and

Protecting $5.0

0722 Crop Harvesting, Primarily by

Machine $5.0

0723 Preparation $5.0

0724 Cotton Ginning $5.0

0741 Veterinary Services for Livestock $5.0

0742 Veterinary Services for Animal

Specialties $5.0

0751 Except $5.0

0761 Farm Labor Contractors and Crew

Leaders

0762 Farm Management Services $5.0

0781 Landscape Counseling and Planning $5.0

0782 Lawn and Garden Services $5.0

0783 Ornamental Shrub and Tree Services $5.0

Major Group 08 Forestry

0811 Timber Tracts $5.0

0831 Forest Nurseries and Gathering of

Forest Products $5.0

0851 Forestry Services $5.0

Major Group 09 Fishing, Hunting, and Trapping

0912 Finfish $3.0

0913 Shellfish $3.0

0919 Miscellaneous Marine Products $3.0

0921 Fish Hatcheries and Preserves $3.0

0971 Hunting and Trapping, and Game

Propagation $3.0

Division B Mining Major Group 10 Metal Mining

1011 Iron Ores 500

1021 Copper Ores 500

1031 Lead and Zinc Ores 500

1041 Gold Ores 500

1044 Silver Ores 500

1061 Ferroalloy Ores, Except Vanadium 500

1081 Metal Mining Services $5.0

1094 Uranium-Radium-Vanadium Ores 500

1099 Miscellaneous Metal Ores, N.E.C. 500

Major Group 12 Coal Mining

1221 Bituminous Coal and Lignite

Surface Mining 500

1222 Bituminous Coal Underground Mining 500

1231 Anthracite Mining 500

1241 Coal Mining Services $5.0

Major Group 13 Oil and Gas Extraction

1311 Crude Petroleum and Natural Gas 500

1321 Natural Gas Liquids 500

1381 Drilling Oil and Gas Wells 500

1382 Oil and Gas Field Exploration Services $5.0

1389 Oil and Gas Field Services, N.E.C. $5.0

Major Group 14 Mining and Quarrying of Nonmetallic Minerals, Except Fuels

1411 Dimension Stone 500

1422 Crushed and Broken Limestone 500

1423 Crushed and Broken Granite 500

1429 Crushed and Broken Stone, N.E.C. 500

1442 Construction Sand and Gravel 500

1446 Industrial Sand 500

1455 Kaolin and Ball Clay 500

1459 Clay, Ceramic, and Refractory

Minerals, N.E.C.

1474 Potash Soda, and Borate Minerals 500

1475 Phosphate Rock 500

1479 Chemical and Fertilizer Mineral

Mining, N.E.C 500

1481 Nonmatalic Minerals Services,

Except Fuels $5.0

1499 Miscellaneous Nonmetallic Minerals,

Except Fuels 500

Division C Construction

Major Group 15 Building Construction General Contractors

and Operative Builders

1521 General Contractors Single-

Family Houses $17.0

1522 General Contractors Residential

Buildings,Other Than Single-Family$17.0

1531 Operative Builders $17.0

1541 General Contractors Industrial

Buildings and Warehouses $17.0

1542 General Contractors Nonresidential

Buildings, Other Than Industrial

Buildings and Warehouses. $17.0

Major Group 16 Heavy Construction Other Than Building Construction Contractors

1611 Highway and Street Construction,

Except Elevated Highways $17.0

1622 Bridge, Tunnel, and Elevated

Highway Construction. $17.0

1623 Water, Sewer, Pipeline, and

Communications and Power Line

Construction $17.0

1629 Heavy Construction, N.E.C. $17.0

Except, Dredging and Surface Cleanup

Activities $13.5 *1

Major Group 17 Construction Special Trade Contractors

1711 Plumbing, Heating, and Air-

Conditioning $7.0

1721 Painting and Paper Hanging $7.0

1731 Electrical Work $7.0

1741 Masonry, Stone Setting, and Other

Stone Work $7.0

1742 Plastering, Drywall, Acoustical

and Insulation Work $7.0

1743 Terrazzo, Tile, Marble, and

Mosaic Work $7.0

1751 Carpentry Work $7.0

1752 Floor Laying and Other Floor Work,

N.E.C. $7.0

1761 Roofing, Siding,& Sheet Metal Work $7.0

1771 Concrete Work $7.0

1781 Water Well Drilling $7.0

1791 Structural Steel Erection $7.0

1793 Glass and Glazing Work $7.0

1794 Excavation Work $7.0

1795 Wrecking and Demolition Work $7.0

1796 Installation or Erection of

Building Equipment, N.E.C. $7.0

1799 Special Trade Contractors, N.E.C. $7.0

Except, Base Housing Maintenance $7.0 12

Division D Manufacturing 2 Major Group 20 Food and Kindred Products

2011 Meat Packing Plants 500

2013 Sausages and Other Prepared Meat

Products 500

2015 Poultry Slaughtering and Processing500

2021 Creamery Butter 500

2022 Natural, Processed, and Imitation

Cheese 500

2023 Dry, Condensed, and Evaporated

Dairy Products 500

2024 Ice Cream and Frozen Desserts 500

2026 Fluid Milk 500

2032 Canned Specialties 1,000

2033 Canned Fruits, Vegetables,

Preserves, Jams, and Jellies 500

2034 Dried and Dehydrated Fruits,

Vegetables, and Soup Mixes 500

2035 Pickled Fruits and Vegetables,

Vegetable Sauces and Seasonings,

and Salad Dressings 500

2037 Frozen Fruits, Fruit Juices,

and Vegetables 500

2038 Frozen Specialties, N.E.C. 500

2041 Flour and Other Grain Mill Products500

2043 Cereal Breakfast Foods 1,000

2044 Rice Milling 500

2045 Prepared Flour Mixes and Doughs 500

2046 Wet Corn Milling 750

2047 Dog and Cat Food 500

2048 Prepared Feeds and Feed Ingredients

for Animals and Fowls, Except Dogs

and Cats 500

2051 Bread and Other Bakery Products,

Except Cookies and Crackers 500

2052 Cookies and Crackers 750

2053 Frozen Bakery Products, Except

Bread 500

2061 Cane Sugar, Except Refining 500

2062 Cane Sugar Refining 750

2063 Beet Sugar 750

2064 Candy and Other Confectionery Products 500

2066 Chocolate and Cocoa Products 500

2067 Chewing Gum 500

2068 Salted and Roasted Nuts and Seeds 500

2074 Cottonseed Oil Mills 500

2075 Soybean Oil Mills 500

2076 Vegetable Oil Mills, Except Corn,

Cottonseed, and Soybean 1,000

2077 Animal and Marine Fats and Oils 500

2079 Shortening, Table Oils, Margarine,

and Other Edible Fats and Oils,

N.E.C ....................... 750

2082 Malt Beverages 500

2083 Malt 500

2084 Wines, Brandy, and Brandy Spirits 500

2085 Distilled and Blended Liquors 750

2086 Bottled and Canned Soft Drinks

and Carbonated Waters 500

2087 Flavoring Extracts and Flavoring

Syrups, N.E.C 500

2091 Canned and Cured Fish and Seafoods 500

2092 Prepared Fresh or Frozen Fish and

Seafoods 500

2095 Roasted Coffee 500

2096 Potato Chips, Corn Chips, and

Similar Snacks 500

2097 Manufactured Ice 500

2098 Macaroni, Spaghetti, Vermicelli,

and Noodles 500

2099 Food Preparations, N.E.C 500

Major Group 21 Tobacco Products

2111 Cigarettes 1,000

2121 Cigars 500

2131 Chewing and Smoking Tobacco and

Snuff 500

2141 Tobacco Stemming and Redrying 500

Major Group 22 Textile Mill Products

2211 Broadwoven Fabric Mills, Cotton 1,000

2221 Broadwoven Fabric Mills, Manmade

Fiber and Silk 500

2231 Broadwoven Fabric Mills, Wool

(Including Dyeing and 500

2241 Narrow Fabric and Other Smallwares

Mills: Cotton, Wool, Silk and

Manmade Fiber 500

2251 Women s Full-Length and Knee-Length

Hosiery, Except 500

2252 Hosiery, N.E.C. 500

2253 Knit Outerwear Mills 500

2254 Knit Underwear and Nightwear Mills 500

2257 Weft Knit Fabric Mills 500

2258 Lace and Warp Knit Fabric Mills 500

2259 Knitting Mills, N.E.C. 500

2261 Finishers of Broadwoven Fabrics of

Cotton 1,000

2262 Finishers of Broadwoven Fabrics

of Manmade Fiber and 500

2269 Finishers of Textiles, N.E.C. 500

2273 Carpets and Rugs 500

2281 Yarn Spinning Mills 500

2282 Yarn Texturizing, Throwing,

Twisting, and Winding Mills 500

2284 Thread Mills 500

2295 Coated Fabrics, Not Rubberized 1,000

2296 Tire Cord and Fabrics 1,000

2297 Nonwoven Fabrics 500

2298 Cordage and Twine 500

2299 Textile Goods, N.E.C. 500

Major Group 23 Apparel and Other Finished Products Made From Fabrics and Similar Materials

2311 Men s and Boys Suits, Coats and

Overcoats 500

2321 Men s and Boys Shirts, Except

Work Shirts 500

2322 Men s and Boys Underwear and

Nightwear 500

2323 Men s and Boys Neckwear 500

2325 Men s and Boys Separate Trousers

and Slacks 500

2326 Men s and Boys Work Clothing 500

2329 Men s and Boys Clothing, N.E.C. 500

2331 Women s, Misses , and Juniors

Blouses and Shirts 500

2335 Women s, Misses , and Juniors

Dresses 500

2337 Women s, Misses , and Juniors

Suits, Skirts, and Coats 500

2339 Women s, Misses , and Juniors

Outerwear, N.E.C 500

2341 Women s, Misses , Children s, and

Infants Underwear and Nightwear 500

2342 Brassieres, Girdles, and Allied

Garments 500

2353 Hats, Caps, and Millinery 500

2361 Girls , Children s, and Infants

Dresses, Blouses, and shirts. 500

2369 Girls , Children s, and Infants

Outerwear, N.E.C. 500

2371 Fur Goods 500

2381 Dress and Work Gloves, Except

Knit and All-Leather 500

2384 Robes and Dressing Gowns 500

2385 Waterproof Outerwear 500

2386 Leather and Sheep-Lined Clothing 500

2387 Apparel Belts 500

2389 Apparel and Accessories, N.E.C. 500

2391 Curtains and Draperies 500

2392 Housefurnishings, Except Curtains

and Draperies 500

2393 Textile Bags 500

2394 Canvas and Related Products 500

2395 Pleating, Decorative and Novelty

Stitching, and Tucking for the

Trade 500

2396 Automotive Trimmings, Apparel

Findings, and Related Products 500

2397 Schiffli Machine Embroideries 500

2399 Fabricated Textile Products, N.E.C.500

Major Group 24 Lumber and Wood Products, Except Furniture

2411 Logging 500

2421 Sawmills and Planing Mills,General 500

2426 Hardwood Dimension and Flooring

Mills 500

2429 Special Product Sawmills, N.E.C. 500

2431 Millwork 500

2434 Wood Kitchen Cabinets 500

2435 Hardwood Veneer and Plywood 500

2436 Softwood Veneer and Plywood 500

2439 Structural Wood Members, N.E.C. 500

2441 Nailed and Lock Corner Wood Boxes

and Shook 500

2448 Wood Pallets and Skids 500

2449 Wood Containers, N.E.C. 500

2451 Mobile Homes 500

2452 Prefabricated Wood Buildings and

Components 500

2491 Wood Preserving 500

2493 Reconstituted Wood Products 500

2499 Wood Products, N.E.C. 500

Major Group 25 Furniture and Fixtures

2511 Wood Household Furniture,

Except Upholstered 500

2512 Wood Household Furniture,

Upholstered 500

2514 Metal Household Furniture 500

2515 Mattresses, Foundations, and

Convertible Beds 500

2517 Wood Television, Radio,Phonograph,

and Sewing Machine Cabinets 500

2519 Household Furniture, N.E.C. 500

2521 Wood Office Furniture 500

2522 Office Furniture, Except Wood 500

2531 Public Building and Related

Furniture 500

2541 Wood Office and Store Fixtures,

Partitions, Shelving, and Lockers 500

2542 Office and Store Fixtures,

Partitions, Shelving, and Lockers,

Except Wood 500

2591 Drapery Hardware and Window

Blinds and Shades 500

2599 Furniture and Fixtures, N.E.C. 500

Major Group 26 Paper and Allied Products

2611 Pulp Mills 750

2621 Paper Mills 750

2631 Paperboard Mills 750

2652 Setup Paperboard Boxes 500

2653 Corrugated and Solid Fiber Boxes 500

2655 Fiber Cans, Tubes, Drums, and

Similar Products 500

2656 Sanitary Food Containers, Except

Folding 750

2657 Folding Paperboard Boxes,

Including Sanitary 750

2671 Packaging Paper and Plastics Film,

Coated and Laminated 500

2672 Coated and Laminated Paper, N.E.C. 500

2673 Plastics, Foil, and Coated Paper

Bags 500

2674 Uncoated Paper and Multiwall Bags 500

2675 Die-Cut Paper and Paperboard and

Cardboard 500

2676 Sanitary Paper Products 500

2677 Envelopes 500

2678 Stationery, Tablets, and Related

Products 500

2679 Converted Paper and Paperboard

Products, N.E.C 500

2386 Leather and Sheep-Lined Clothing 500

2387 Apparel Belts 500

2389 Apparel and Accessories, N.E.C. 500

2391 Curtains and Draperies 500

2392 Housefurnishings, Except Curtains

and Draperies 500

2393 Textile Bags 500

2394 Canvas and Related Products 500

2395 Pleating, Decorative and Novelty

Stitching, and Tucking for the

Trade 500

2396 Automotive Trimmings, Apparel

Findings, and Related Products 500

2397 Schiffli Machine Embroideries 500

2399 Fabricated Textile Products,N.E.C. 500

Major Group 24 Lumber and Wood Products, Except Furniture

2411 Logging 500

2421 Sawmills and Planing Mills,General 500

2426 Hardwood Dimension and Flooring

Mills 500

2429 Special Product Sawmills, N.E.C. 500

2431 Millwork 500

2434 Wood Kitchen Cabinets 500

2435 Hardwood Veneer and Plywood 500

2436 Softwood Veneer and Plywood 500

2439 Structural Wood Members, N.E.C. 500

2441 Nailed and Lock Corner Wood Boxes

and Shook 500

2448 Wood Pallets and Skids 500

2449 Wood Containers, N.E.C. 500

2451 Mobile Homes 500

2452 Prefabricated Wood Buildings and Components 500

2491 Wood Preserving 500

2493 Reconstituted Wood Products 500

2499 Wood Products, N.E.C. 500

Major Group 25 Furniture and Fixtures

2511 Wood Household Furniture, Except

Upholstered 500

2512 Wood Household Furniture,

Upholstered 500

2514 Metal Household Furniture 500

2515 Mattresses, Foundations, and

Convertible Beds 500

2517 Wood Television, Radio,Phonograph,

and Sewing Machine Cabinets 500

2519 Household Furniture, N.E.C. 500

2521 Wood Office Furniture 500

2522 Office Furniture, Except Wood 500

2531 Public Building and Related

Furniture 500

2541 Wood Office and Store Fixtures,

Partitions, Shelving, and Lockers 500

2542 Office and Store Fixtures,

Partitions, Shelving, and Lockers,

Except Wood 500

2591 Drapery Hardware and Window Blinds

and Shades 500

2599 Furniture and Fixtures, N.E.C. 500

Major Group 26 Paper and Allied Products

2611 Pulp Mills 750

2621 Paper Mills 750

2631 Paperboard Mills 750

2652 Setup Paperboard Boxes 500

2653 Corrugated and Solid Fiber Boxes 500

2655 Fiber Cans, Tubes, Drums, and

Similar Products 500

2656 Sanitary Food Containers, Except

Folding 750

2657 Folding Paperboard Boxes,Including

Sanitary 750

2671 Packaging Paper and Plastics Film,

Coated and Laminated 500

2672 Coated and Laminated Paper, N.E.C. 500

2673 Plastics, Foil, and Coated Paper

Bags 500

2674 Uncoated Paper and Multiwall Bags 500

2675 Die-Cut Paper and Paperboard and

Cardboard 500

2676 Sanitary Paper Products 500

2677 Envelopes 500

2678 Stationery, Tablets, and Related

Products 500

2679 Converted Paper and Paperboard

Products, N.E.C 500

2711 Newspapers: Publishing, or

Publishing and Printing 500

2721 Periodicals: Publishing, or

Publishing and Printing 500

2731 Books: Publishing, or Publishing

and Printing 500

2732 Book Printing 500

2741 Miscellaneous Publishing 500

2752 Commercial Printing, Lithographic 500

2754 Commercial Printing, Gravure 500

2759 Commercial Printing, N.E.C. 500

2761 Manifold Business Forms 500

2771 Greeting Cards 500

2782 Blankbooks, Looseleaf Binders

and Devices 500

2789 Bookbinding and Related Work 500

2791 Typesetting 500

2796 Platemaking and Related Services 500

Major Group 28 Chemicals and Allied Products

2812 Alkalies and Chlorine 1,000

2813 Industrial Gases 1,000

2816 Inorganic Pigments 1,000

2819 Industrial Inorganic Chemicals,

N.E.C. 1,000

2821 Plastics Materials, Synthetic

Resins, and Nonvulcanizable

Elastomers 750

2822 Synthetic Rubber (Vulcanizable

Elastomers) 1,000

2823 Cellulosic Manmade Fibers 1,000

2824 Manmade Organic Fibers, Except

Cellulosic 1,000

2833 Medicinal Chemicals and Botanical

Products 750

2834 Pharmaceutical Preparations 750

2835 In Vitro and In Vivo Diagnostic

Substances 500

2836 Biological Products, Except

Diagnostic Substances 500

2841 Soap and Other Detergents, Except

Specialty Cleaners 750

2842 Specialty Cleaning, Polishing,

and Sanitation Preparations 500

2843 Surface Active Agents, Finishing

Agents, Sulfonated Oils, and

Assistants 500

2844 Perfumes, Cosmetics, and Other

Toilet Preparations 500

2851 Paints, Varnishes, Lacquers,

Enamels, and Allied Products 500

2861 Gum and Wood Chemicals 500

2865 Cyclic Organic Crudes and

Intermediates, and Organic Dyes

and Pigments 750

2869 Industrial Organic Chemicals, N.E.C 1,000

2873 Nitrogenous Fertilizers 1,000

2874 Phosphatic Fertilizers 500

2875 Fertilizers, Mixing Only 500

2879 Pesticides and Agricultural

Chemicals, N.E.C. 500

2891 Adhesives and Sealants 500

2892 Explosives 750

2893 Printing Ink 500

2895 Carbon Black 500

2899 Chemicals and Chemical

Preparations,N.E.C. 500

Major Group 29 Petroleum Refining and Related Industries

2911 Petroleum Refining 1,500

2951 Asphalt Paving Mixtures and Blocks 500

2952 Asphalt Felts and Coatings 750

2992 Lubricating Oils and Greases 500

2999 Products of Petroleum and Coal,

N.E.C. 500

Major Group 30 Rubber and Miscellaneous Plastics Products

3011 Tires and Inner Tubes 1,000

3021 Rubber and Plastics Footwear 1,000

3052 Rubber and Plastics Hose andBelting500

3053 Gaskets, Packing, and Sealing

Devices 500

3061 Molded, Extruded, and Lathe-Cut

Mechanical Rubber Goods 500

3069 Fabricated Rubber Products, N.E.C 500

3081 Unsupported Plastics Film & Sheet 500

3082 Unsupported Plastics Profile Shapes500

3083 Laminated Plastics Plate, Sheet,

and Profile Shapes 500

3084 Plastics Pipe 500

3085 Plastics Bottles 500

3086 Plastics Foam Products 500

3087 Custom Compounding of Purchased

Plastics Resins 500

3088 Plastics Plumbing Fixtures 500

3089 Plastics Products, N.E.C. 500

Major Group 31 Leather and Leather Products

3111 Leather Tanning and Finishing 500

3131 Boot and Shoe Cut Stock and Findings 500

3142 House Slippers 500

3143 Men s Footwear, Except Athletic 500

3144 Women s Footwear, Except Athletic 500

3149 Footwear, Except Rubber, N.E.C. 500

3151 Leather Gloves and Mittens 500

3161 Luggage 500

3171 Women s Handbags and Purses 500

3172 Personal Leather Goods, Except Women s Handbags and 500

3199 Leather Goods, N.E.C. 500

Major Group 32 Stone, Clay, Glass, and Concrete Products

3211 Flat Glass 1,000

3221 Glass Containers 750

3229 Pressed and Blown Glass and Glass-

ware, N.E.C. 750

3231 Glass Products, Made of Purchased

Glass 500

3241 Cement, Hydraulic 750

3251 Brick and Structural Clay Tile 500

3253 Ceramic Wall and Floor Tile 500

3255 Clay Refractories 500

3259 Structural Clay Products, N.E.C. 500

3261 Vitreous China Plumbing Fixtures

and China and Earthenware Fittings

and Bathroom Accessories. 750

3262 Vitreous China Table and Kitchen

Articles 500

3263 Fine Earthenware (Whiteware) Table

and Kitchen Articles 500

3264 Porcelain Electrical Supplies 500

3269 Pottery Products, N.E.C. 500

3271 Concrete Block and Brick 500

3272 Concrete Products, Except Block

and Brick 500

3273 Ready Mixed Concrete 500

3274 Lime 500

3275 Gypsum Products 1,000

3281 Cut Stone and Stone Products 500

3291 Abrasive Products 500

3292 Asbestos Products 750

3295 Minerals and Earths, Ground or

Otherwise Treated 500

3296 Mineral Wool 750

3297 Nonclay Refractories 750

3299 Nonmetallic Mineral Products,

N.E.C. 500

Major Group 32 Primary Metal Industries

3312 Steel Works, Blast Furnaces

(Including Coke Ovens), and

Rolling Mills 1,000

3313 Electrometallurgical Products,

Except Stee l750

3315 Steel Wiredrawing and Steel Nails

and Spikes 1,000

3316 Cold-Rolled Steel Sheet, Strip,

and Bars 1,000

3317 Steel Pipe and Tubes 1,000

3321 Gray and Ductile Iron Foundries 500

3322 Malleable Iron Foundries 500

3324 Steel Investment Foundries 500

3325 Steel Foundries, N.E.C. 500

3331 Primary Smelting and Refining of

Copper 1,000

3334 Primary Production of Aluminum 1,000

3339 Primary Smelting and Refining of

Nonferrous Metals, Except Copper

and Aluminum 750

3341 Secondary Smelting and Refining of

Nonferrous Metals 500

3351 Rolling, Drawing, and Extruding

of Copper 750

3353 Aluminum Sheet, Plate, and Foil 750

3354 Aluminum Extruded Products 750

3355 Aluminum Rolling and Drawing,N.E.C.750

3356 Rolling, Drawing, and Extruding of

Nonferrous Metals, Except Copper

and Aluminum 750

3357 Drawing and Insulating of

Nonferrous Wire 1,000

3363 Aluminum Die-Castings 500

3364 Nonferrous Die-Castings, Except

Aluminum 500

3365 Aluminum Foundries 500

3366 Copper Foundries 500

3369 Nonferrous Foundries, Except

Aluminum and Copper 500

3398 Metal Heat Treating 750

3399 Primary Metal Products, N.E.C. 750

Major Group 34 Fabricated Metal Products, Except Machinery and Transportation Equipment

3411 Metal Cans 1,000

3412 Metal Shipping Barrels, Drums,

Kegs, and Pails 500

3421 Cutlery 500

3423 Hand and Edge Tools,Except Machine

Tools and Handsaws 500

3425 Saw Blades and Handsaws 500

3429 Hardware, N.E.C. 500

3431 Enameled Iron and Metal Sanitary

Ware 750

3432 Plumbing Fixture Fittings and Trim 500

3433 Heating Equipment, Except Electric

and Warm Air Furnaces 500

3441 Fabricated Structural Metal 500

3442 Metal Doors, Sash, Frames, Molding,

and Trim 500

3443 Fabricated Plate Work(Boiler Shops)500

3444 Sheet Metal Work 500

3446 Architectural and Ornamental Metal

Work 500

3448 Prefabricated Metal Buildings and

Components 500

3449 Miscellaneous Structural MetalWork 500

3451 Screw Machine Products 500

3452 Bolts, Nuts, Screws, Rivets, and

Washers 500

3462 Iron and Steel Forgings 500

3463 Nonferrous Forgings 500

3465 Automotive Stampings 500

3466 Crowns and Closures 500

3469 Metal Stampings, N.E.C. 500

3471 Electroplating, Plating,

Polishing, Anodizing, and Coloring 500

3479 Coating, Engraving, and Allied

Services, N.E.C. 500

3482 Small Arms Ammunition 1,000

3483 Ammunition, Except for Small Arms 1,500

3484 Small Arms 1,000

3489 Ordnance and Accessories, N.E.C. 500

3491 Industrial Valves 500

3492 Fluid Power Valves and Hose

Fittings 500

3493 Steel Springs, Except Wire 500

3494 Valves and Pipe Fittings, N.E.C. 500

3495 Wire Springs 500

3496 Miscellaneous Fabricated Wire

Products 500

3497 Metal Foil and Leaf 500

3498 Fabricated Pipe and Pipe Fittings 500

3499 Fabricated Metal Products, N.E.C. 500

Major Group 35 Industrial and Commercial Machinery and Computer Equipment

3511 Steam, Gas, and Hydraulic

Turbines, and Turbine Generator

Set Units 1,000

3519 Internal Combustion Engines,N.E.C. 1,000

3523 Farm Machinery and Equipment 500

3524 Lawn and Garden Tractors and Home

Lawn and Garden Equipment 500

3531 Construction Machinery and

Equipment 750

3532 Mining Machinery and Equipment,

Except Oil and Gas Field Machinery

and Equipment 500

3533 Oil and Gas Field Machinery and

Equipment 500

3534 Elevators and Moving Stairways 500

3535 Conveyors and Conveying Equipment 500

3536 Overhead Traveling Cranes, Hoists,

and Monorail Systems 500

3537 Industrial Trucks, Tractors,

Trailers, and Stackers 750

3541 Machine Tools, Metal Cutting Types 500

3542 Machine Tools, Metal Forming Types 500

3543 Industrial Patterns 500

3544 Special Dies and Tools, Die Sets,

Jigs and Fixtures, and Industrial

Molds 500

3545 Cutting Tools, Machine Tool

Accessories, and Machinists

Precision Measuring Devices 500

3546 Power-Driven Handtools 500

3547 Rolling Mill Machinery and

Equipment 500

3548 Electric and Gas Welding and

Soldering Equipment 500

3549 Metalworking Machinery, N.E.C. 500

3552 Textile Machinery 500

3553 Woodworking Machinery 500

3554 Paper Industries Machinery 500

3555 Printing Trades Machinery and

Equipment 500

3556 Food Products Machinery 500

3559 Special Industry Machinery, N.E.C. 500

3561 Pumps and Pumping Equipment 500

3562 Ball and Roller Bearings 750

3563 Air and Gas Compressors 500

3564 Industrial and Commercial Fans and

Blowers and Air Purification

Equipment 500

3565 Packaging Machinery 500

3566 Speed Changers, Industrial

High-Speed Drives, and Gears 500

3567 Industrial Process Furnaces and

Ovens 500

3568 Mechanical Power Transmission

Equipment, N.E.C. 500

3569 General Industrial Machinery and

Equipment, N.E.C. 500

3571 Electronic Computers 1,000

3572 Computer Storage Devices 1,000

3575 Computer Terminals 1,000

3577 Computer Peripheral Equipment,

N.E.C. 1,000

3578 Calculating and Accounting Machines,

Except Electronic Computers 1,000

3579 Office Machines, N.E.C. 500

3581 Automatic Vending Machines . 500

3582 Commercial Laundry, Drycleaning,

and Pressing Machines 500

3585 Air-Conditioning and Warm Air

Heating Equipment and Commercial

and Industrial Re-frigeration

Equipment. 750

3586 Measuring and Dispensing Pumps 500

3589 Service Industry Machinery, N.E.C. 500

3592 Carburetors, Pistons, Piston Rings

and Valves 500

3593 Fluid Power Cylinders and Actuators500

3594 Fluid Power Pumps and Motors 500

3596 Scales and Balances, Except

Laboratory 500

3599 Industrial and Commercial Machinery

and Equipment, N.E.C 500

Major Group 36 Electronic and Other Electrical Equipment and Components, Except Computer Equipment

3612 Power, Distribution, and Specialty

Transformers 750

3613 Switchgear and Switchboard

Apparatus 750

3621 Motors and Generators 1,000

3624 Carbon and Graphite Products 750

3625 Relays and Industrial Controls 750

3629 Electrical Industrial Apparatus,

N.E.C. 500

3631 Household Cooking Equipment 750

3632 Household Refrigerators and Home

and Farm Freezers 1,000

3633 Household Laundry Equipment 1,000

3634 Electric Housewares and Fans . 750

3635 Household Vacuum Cleaners 750

3639 Household Appliances, N.E.C. . 500

3641 Electric Lamp Bulbs and Tubes 1,000

3643 Current-Carrying Wiring Devices 500

3644 Noncurrent-Carrying Wiring Devices 500

3645 Residential Electric Lighting

Fixtures 500

3646 Commercial, Industrial, and

Institutional Electric Lighting

Fixtures 500

3647 Vehicular Lighting Equipment 500

3648 Lighting Equipment, N.E.C. 500

3651 Household Audio & Video Equipment 750

3652 Phonograph Records and Prerecorded

Audio Tapes and Disks 750

3661 Telephone and Telegraph Apparatus 1,000

3663 Radio and Television Broadcasting

and Communications Equipment 750

3669 Communications Equipment, N.E.C. 750

3671 Electron Tubes 750

3672 Printed Circuit Boards 500

3674 Semiconductors and Related Devices 500

3675 Electronic Capacitors 500

3676 Electronic Resistors 500

3677 Electronic Coils, Transformers, and

Other Inductors 5003

3678 Electronic Connectors 500

3679 Electronic Components, N.E.C. 500

3691 Storage Batteries 500

3692 Primary Batteries, Dry and Wet 1,000

3694 Electrical Equipment for Internal

Combustion Engines 750

3695 Magnetic and Optical Recording

Media 1,000

3699 Electrical Machinery, Equipment,

and Supplies, N.E.C. 750

Major Group 37 Transportation Equipment

3711 Motor Vehicles and Passenger

Car Bodies 1,000

3713 Truck and Bus Bodies 500

3714 Motor Vehicle Parts & Accessories 750

3715 Truck Trailers 500

3716 Motor Homes 1,000

3721 Aircraft 1,500

3724 Aircraft Engines and Engine Parts 1,000

3728 Aircraft Parts and Auxiliary

Equipment, N.E.C 1,000

3731 Shipbuilding and Repair of Nuclear

Propelled Ships 1,000

Except Shipbuilding of Nonnuclear Propelled

Ships and Nonpropelled Ships 1,000

Ship Repair (Including Overhauls

and Conversions) Performed on Nonnuclear

Propelled and Nonpropelled Ships

East of the 108 Meridian. 1,000

Ship Repair (Including Overhauls

and Conversions) Performed on Nonnuclear

Propelled and Nonpropelled Ships

West of the 108 Meridian. 1,000

3732 Boat Building and Repairing 500

3743 Railroad Equipment 1,000

3751 Motorcycles, Bicycles, and Parts 500

3761 Guided Missiles and Space Vehicles 1,000

3764 Guided Missile and Space Vehicle

Propulsion Units and Propulsion

Unit Parts 1,000

3769 Guided Missile and Space Vehicle Parts

and Auxiliary Equipment, N.E.C 1,000

3792 Travel Trailers and Campers 500

3795 Tanks and Tank Components 1,000

3799 Transportation Equipment, N.E.C. . 500

Major Group 38 Measuring, Analyzing, and Controlling Instruments; Photographic, Medical, and Optical Goods; Watches and Clocks

3812 Search, Detection, Navigation,

Guidance, Aeronautical, and Nautical

Systems and In-struments. 750

3821 Laboratory Apparatus and Furniture 500

3822 Automatic Controls for Regulating

Residential and Commercial Environments

and Appli-ances. 500

3823 Industrial Instruments for Measurement,

Display, and Control of Process

Variables; and Related Products. 500

3824 Totalizing Fluid Meters and

Counting Devices 500

3825 Instruments for Measuring and

Testing of Electricity and

Electrical Signals 500

3826 Laboratory Analytical Instruments 500

3827 Optical Instruments and Lenses 500

3829 Measuring and Controlling Devices,

N.E.C 500

3841 Surgical and Medical Instruments

and Apparatus 500

3842 Orthopedic, Prosthetic, and

Surgical Appliances and 500

3843 Dental Equipment and Supplies 500

3844 X-Ray Apparatus and Tubes and

Related Irradiation 500

3845 Electromedical and

Electrotherapeutic Apparatus 500

3851 Ophthalmic Goods 500

3861 Photographic Equipment and Supplies500

3873 Watches, Clocks, Clockwork Operated

Devices, and Parts 500

Major Group 39 Miscellaneous Manufacturing Industries

3911 Jewelry, Precious Metal 500

3914 Silverware, Plated Ware, and

Stainless Steel Ware 500

3915 Jewelers Findings and Materials,

and Lapidary Work 500

3931 Musical Instruments 500

3942 Dolls and Stuffed Toys 500

3944 Games, Toys, and Children s Vehicles, Except Dolls and 500

3949 Sporting and Athletic Goods,N.E.C. 500

3951 Pens, Mechanical Pencils,and Parts 500

3952 Lead Pencils, Crayons, and Artists

Materials 500

3953 Marking Devices 500

3955 Carbon Paper and Inked Ribbons 500

3961 Costume Jewelry and Costume Novelties,

Except Precious Metal 500

3965 Fasteners, Buttons, Needles, and Pins 500

3991 Brooms and Brushes 500

3993 Signs and Advertising Specialties 500

3995 Burial Caskets 500

3996 Linoleum, Asphalted-Felt-Base, and

Other Hard Surface Floor Coverings,

N.E.C. 750

3999 Manufacturing Industries, N.E.C. 500

Division E Transportation, Communications Electric, Gas, and Sanitary Services Major Group 40 Railroad Transportation

4011 Railroads, Line-Haul Operating 1,500

4013 Railroad Switching and Terminal

Establishments 500

Major Group 41 Local and Suburban Transit and

Interurban Highway Passenger Transportation

4111 Local and Suburban Transit $5.0

4119 Local Passenger Transportation,

N.E.C. $5.0

4121 Taxicabs $5.0

4131 Intercity and Rural Bus

Transportation $5.0

4141 Local Bus Charter Service $5.0

4142 Bus Charter Service, Except Local $5.0

4151 School Buses $5.0

4173 Terminal and Service Facilities for

Motor Vehicle Passenger

Transportation $5.0

Major Group 42 Motor Freight Transportation and Warehousing

4212 Local Trucking Without Storage $18.5

Except Garbage and Refuse Collection,

Without Disposal $6.0

4213 Trucking, Except Local $18.5

4214 Local Trucking With Storage $18.5

4215 Courier Services, Except by Air $18.5

4221 Farm Product Warehousing & Storage $18.5

4222 Refrigerated Warehousing & Storage $18.5

4225 General Warehousing and Storage $18.5

4226 Special Warehousing and Storage,

N.E.C. $18.5

4231 Terminal and Joint Terminal

Maintenance Facilities for Motor

Freight Transportation $5.0

Major Group 44 Water Transportation

4412 Deep Sea Foreign Transportation

of Freight 500

4424 Deep Sea Domestic Transportation

of Freight 500

4432 Freight Transportation on the Great

Lakes St. Lawrence Seaway 500

4449 Water Transportation of Freight,

N.E.C. 500

4481 Deep Sea Transportation of

Passengers, Except by Ferry 500

4482 Ferries 500

4489 Water Transportation of Passengers,

N.E.C. 500

4491 Marine Cargo Handling $18.5

4492 Towing and Tugboat Services $5.0

4493 Marinas $5.0

4499 Water Transportation Services,

N.E.C. $5.0

Except Offshore Marine Water

Transportation Services $20.5

Major Group 45 Transportation by Air

4512 Air Transportation, Scheduled 1,500

4513 Air Courier Services 1,500

4522 Air Transportation, Nonscheduled, 1,500

Except Offshore Marine Air Transportation

Services $20.5

4581 Airports, Flying Fields, and

Airport Terminal Services $5.0

Major Group 46 Pipelines, Except Natural Gas

4612 Crude Petroleum Pipelines 1,500

4613 Refined Petroleum Pipelines 1,500

4619 Pipelines, N.E.C. $25.0

Major Group 47 Transportation Services

4724 Travel Agencies $1.0

4725 Tour Operators $5.0

4729 Arrangement of Passenger

Transportation, N.E.C. $5.0

4731 Arrangement of Transportation of

Freight and Cargo $18.5

4741 Rental of Railroad Cars $5.0

4783 Packing and Crating $18.5

4785 Fixed Facilities and Inspection

and Weighing Services for Motor

Vehicle Transportation $5.0

4789 Transportation Services, N.E.C. $5.0

Major Group 48 Communications

4812 Radiotelephone Communications 1,500

4813 Telephone Communications, Except

Radiotelephone 1,500

4822 Telegraph and Other Message

Communications $5.0

4832 Radio Broadcasting Stations $5.0

4833 Television Broadcasting Stations $10.5

4841 Cable and Other Pay Television

Services $11.0

4899 Communications Services, N.E.C. $11.0

Major Group 49 Electric, Gas, and Sanitary Services

4911 Electric Services 4 million megawatt hrs.

4922 Natural Gas Transmission $5.0

4923 Gas Transmission and Distribution $5.0

4924 Natural Gas Distribution 500

4925 Mixed, Manufactured, or Liquefied

Petroleum $5.0

Gas Production and/or Distribution

4931 Electric and Other Services

Combined $5.0

4932 Gas and Other Services Combined $5.0

4939 Combination Utilities, N.E.C. $5.0

4941 Water Supply $5.0

4952 Sewerage Systems $5.0

4953 Refuse Systems $6.0

4959 Sanitary Services, N.E.C. $5.0

4961 Steam and Air-Conditioning Supply $9.0

4971 Irrigation Systems $5.0

Division F Wholesale Trade (Not Applicable to Government procurement of supplies. The nonmanufacturer size standard of 500 employees shall be used for purposes of Government procurement of supplies.)

Major Group 50 Wholesale Trade Durable Goods

5012 Automobiles and Other Motor

Vehicles 100

5013 Motor Vehicle Supplies and New

Parts 100

5014 Tires and Tubes 100

5015 Motor Vehicle Parts, Used 100

5021 Furniture 100

5023 Homefurnishings 100

5031 Lumber, Plywood, Millwork, and

Wood Panels 100

5032 *Brick, Stone, and Related

Construction Materials 100

5033 Roofing, Siding, and Insulation

Materials 100

5039 Construction Materials, N.E.C. 100

5043 Photographic Equipment and Supplies 100

5044 Office Equipment 100

5045 Computers and Computer Peripheral

Equipment and Software 100

5046 Commercial Equipment, N.E.C. 100

5047 Medical, Dental, and Hospital

Equipment and Supplies 100

5048 Ophthalmic Goods 100

5049 Professional Equipment and

Supplies, N.E.C. 100

5051 Metals Service Centers and Offices 100

5052 Coal and Other Minerals and Ores 100

5063 Electrical Apparatus and Equipment,

Wiring Supplies, and Construction

Materials 100

5064 *Electrical Appliances, Television

and Radio Sets 100

5065 Electronic Parts and Equipment,

N.E.C. 100

5072 Hardware 100

5074 Plumbing and Heating Equipment and

Supplies (Hydronics) 100

5075 Warm Air Heating and Air-Cond-

itioning Equipment and Supplies 100

5078 Refrigeration Equipment & Supplies 100

5082 Construction and Mining (Except

Petroleum) Machinery and Equipment 100

5083 Farm and Garden Machinery and

Equipment 100

5084 Industrial Machinery and Equipment 100

5085 Industrial Supplies 100

5087 Service Establishment Equipment

and Supplies 100

5088 Transportation Equipment and

Supplies, Except Motor Vehicles 100

5091 Sporting and Recreational Goods

and Supplies 100

5092 Toys and Hobby Goods and Supplies 100

5093 Scrap and Waste Materials 100

5094 Jewelry, Watches, Precious Stones,

and Precious Metals 100

5099 Durable Goods, N.E.C. 100

Major Group 51 Wholesale Trade Nondurable Goods

5111 Printing and Writing Paper 100

5112 Stationery and Office Supplies 100

5113 Industrial and Personal Service

Paper 100

5122 Drugs, Drug Proprietaries, and

Druggists Sundries 100

5131 Piece Goods, Notions, and Other

Dry Goods 100

5136 Men s and Boys Clothing and

Furnishings 100

5137 Women s, Children s, and Infants

Clothing and Accessories 100

5139 Footwear 100

5141 Groceries, General Line 100

5142 Packaged Frozen Foods 100

5143 Dairy Products, Except Dried or

Canned 100

5144 Poultry and Poultry Products 100

5145 Confectionery 100

5146 Fish and Seafood 100

5147 Meats and Meat Products 100

5148 Fresh Fruits and Vegetables 100

5149 Groceries and Related Products,

N.E.C. 100

5153 Grain and Field Beans 100

5154 Livestock 100

5159 Farm-Product Raw Materials, N.E.C. 100

5162 Plastics Materials and Basic

Forms and Shapes 100

5169 Chemical and Allied Products,

N.E.C. 100

5171 Petroleum Bulk Stations and

Terminals 100

5172 Petroleum and Petroleum Products

Wholesalers, Except Bulk Stations

and Terminals 100

5181 Beer and Ale 100

5182 Wine and Distilled Alcoholic Beverages 100

5191 Farm Supplies 100

5192 Books, Periodicals, and Newspapers 100

5193 Flowers, Nursery Stock, and

Florists Supplies 100

5194 Tobacco and Tobacco Products 100

5198 Paints, Varnishes, and Supplies 100

5199 Nondurable Goods, N.E.C. 100

Division G Retail Trade

(Not Applicable to Government procurement of supplies. The nonmanufacturer size standard of 500 employees shall be used for purposes of Government procurement of supplies.)

Major Group 52 Building Materials, Hardware, Garden Supply,

and Mobile Home Dealers

5211 Lumber and Other Building

Materials Dealers $5.0

5231 Paint, Glass, and Wallpaper Stores $5.0

5251 Hardware Stores $5.0

5261 Retail Nurseries, Lawn and Garden

Supply Stores $5.0

5271 Mobile Home Dealers $9.5

Major Group 53 General Merchandise Stores

5311 Department Stores $20.0

5331 Variety Stores $8.0

5399 Miscellaneous General Merchandise

Stores $5.0

Major Group 54 Food Stores

5411 Grocery Stores $20.0

5421 Meat and Fish (Seafood) Markets,

Including Freezer Provisioners $5.0

5431 Fruit and Vegetable Markets $5.0

5441 Candy, Nut, and Confectionery

Stores $5.0

5451 Dairy Products Stores $5.0

5461 Retail Bakeries $5.0

5499 Miscellaneous Food Stores $5.0

Major Group 55 Automotive Dealers and Gasoline Service Stations

5511 Motor Vehicle Dealers (New and

Used) $21.0

5521 Motor Vehicle Dealers (Used Only( $17.0

5531 Auto and Home Supply Stores $5.0

5541 Gasoline Service Stations $6.5

5551 Boat Dealers $5.0

5561 Recreational Vehicle Dealers $5.0

5571 Motorcycle Dealers $5.0

5599 Automotive Dealers, N.E.C. $5.0

Except Aircraft Dealers, Retail $7.5

Major Group 56 Apparel and Accessory Stores

5611 Men s and Boys Clothing and

Accessory Stores $6.5

5621 Women s Clothing Stores $6.5

5632 Women s Accessory and Specialty

Stores $5.0

5641 Children s and Infants Wear Stores$5.0

5651 Family Clothing Stores $6.5

5661 Shoe Stores $6.5

5699 Miscellaneous Apparel and

Accessory Stores $5.0

Major Group 57 Home Furniture, Furnishings, and Equipment Stores

5712 Furniture Stores $5.0

5713 Floor Covering Stores $5.0

5714 Drapery, Curtain, and Upholstery

Stores $5.0

5719 Miscellaneous Homefurnishings

Stores $5.0

5722 Household Appliance Stores $6.5

5731 Radio, Television, and Consumer

Electronics Stores $6.5

5734 Computer and Computer Software

Stores $6.5

5735 Record and Prerecorded Tape Stores $5.0

5736 Musical Instrument Stores $5.0

Major Group 58 Eating and Drinking Places

5812 Eating Places $5.0

Except Food Service, Institutional $15.0

5813 Drinking Places

(Alcoholic Beverages) $5.0

Major Group 59 Miscellaneous Retail

5812 Drug Stores and Proprietary Stores $5.0

5821 Liquor Stores $5.0

5832 Used Merchandise Stores $5.0

5841 Sporting Goods Stores and Bicycle

Shops $5.0

5842 Book Stores $5.0

5843 Stationery Stores $5.0

5844 Jewelry Stores $5.0

5845 Hobby, Toy, and Game Shops $5.0

5846 Camera and Photographic Supply

Stores $5.0

5847 Gift, Novelty, and Souvenir Shops $5.0

5848 Luggage and Leather Goods Stores $5.0

5849 Sewing, Needlework, and Piece

Goods Stores $5.0

5861 Catalog and Mail-Order Houses $18.5

5862 Automatic Merchandising Machine

Operators $5.0

5863 Direct Selling Establishments $5.0

5883 Fuel Oil Dealers $9.0

5884 Liquefied Petroleum Gas

(Bottled Gas) Dealers $5.0

5889 Fuel Dealers, N.E.C. $5.0

5892 Florists $5.0

5893 Tobacco Stores and Stands $5.0

5894 News Dealers and Newsstands $5.0

5895 Optical Goods Stores $5.0

5899 Miscellaneous Retail Stores, N.E.C.$5.0

Division H Finance, Insurance, and Real Estate

Major Group 60 Depository Institutions

6021 National Commercial Banks $100 Million in As- sets *7

6022 State Commercial Banks $100 Million in As- sets *7

6029 Commercial Banks, N.E.C. $100 Million in As- sets *7

6035 Savings Institutions, Federally

Chartered $100 Million in As- sets *7

6036 Savings Institutions, Not

Federally Chartered $100 Million in As- sets *7

6061 Credit Unions, Federally Chartered $100 Million in As- sets *7

6062 Credit Unions, Not Federally

Chartered $100 Million in As- sets *7

6081 Branches and Agencies of Foreign

Banks $100 Million in As- sets *7

6082 Foreign Trade and International

Banks $100 Million in As- sets *7

6091 Nondeposit Trust Facilities $5.0

6099 Functions Related to Depositor

Banking, N.E.C. $5.0

Major Group 61 Nondepository Institution

6141 Personal Credit Institutions $5.0

6153 Short-Term Business Credit

Institutions, Except Agriculture $5.0 * 6158 Miscellaneous Business Credit

Institutions $5.0

6162 Mortgage Bankers and Loan

Correspondents $5.0

6163 Loan Brokers $5.0

Major Group 62 Security and Commodity Brokers,

Dealers, Exchanges and Services

6211 Security Brokers, Dealers and

Flotation Companies $5.0

6221 Commodity Contracts Brokers and

Dealers $5.0

6231 Security and Commodity Exchanges $5.0

6282 Investment Advice $5.0

6289 Services Allied With the Exchange of

Securities or Commodities, N.E.C. $5.0

Major Group 63 Insurance Carriers

6311 Life Insurance $5.0

6321 Accident and Health Insurance $5.0

6324 Hospital and Medical Service Plans $5.0

6331 Fire, Marine, and Casualty

Insurance 1,500.

6351 Surety Insurance $5.0

6361 Title Insurance $5.0

6371 Pension, Health and Welfare Funds $5.0

6399 Insurance Carriers, N.E.C. $5.0

Major Group 64 Insurance Agents, Brokers, and Service

6411 Insurance Agents, Brokers,

and Service $5.0

Major Group 65 Real Estate

6512 Operators of Nonresidential

Buildings $5.0

6513 Operators of Apartment Buildings $5.0

6514 Operators of Dwellings Other Than

Apartment Buildings $5.0

6515 Operators of Residential Mobile

Home Sites, $5.0

Except Leasing of Building Space to

Federal Government by $15.0

6517 Lessors of Railroad Property $5.0

6519 Lessors of Real Property, N.E.C $5.0

6531 Real Estate Agents and Managers $1.5

6541 Title Abstract Offices $5.0

6552 Land Subdividers and Developers,

Except Cemeteries $5.0

6553 Cemetery Subdividers and Developers$5.0

Major Group 67 Holding and Other Investment Offices

6712 Offices of Bank Holding Companies $5.0

6719 Offices of Holding Companies,N.E.C.$5.0

6722 Management Investment Offices,

Open-End $5.0

6726 Unit Investment Trusts, Face-Amount

Certificate Offices, and Closed-End

Management Investment Offices. $5.0

6732 Educational, Religious, and

Charitable Trusts $5.0

6733 Trusts, Except Educational,

Religious, and Charitable $5.0

6792 Oil Royalty Traders $5.0

6794 Patent Owners and Lessors $5.0

6798 Real Estate Investment Trusts $5.0

6799 Investors, N.E.C $5.0

Division I Services

Major Group 70 Hotels, Rooming Houses, Camps, and Other Lodging Places

7011 Hotels and Motels $5.0

7021 Rooming and Boarding Houses $5.0

7032 Sporting and Recreational Camps $5.0

7033 Recreational Vehicle Parks and

Campsites $5.0

7041 Organization Hotels and Lodging

Houses, on Membership Basis $5.0

Major Group 72 Personal Services

7211 Power Laundries,Family & Commercial$10.5

7212 Garment Pressing, and Agents for

Laundries and Drycleaners $5.0

7213 Linen Supply $10.5

7215 Coin-Operated Laundries and

Drycleaning $5.0

7216 Drycleaning Plants, Except Rug

Cleaning $3.5

7217 Carpet and Upholstery Cleaning $3.5

7218 Industrial Launderers $10.5

7219 Laundry and Garment Services,N.E.C $5.0

7221 Photographic Studios, Portrait $5.0

7231 Beauty Shops $5.0

7241 Barber Shops $5.0

7251 Shoe Repair Shops and Shoeshine

Parlors $5.0

7261 Funeral Service and Crematories $5.0

7291 Tax Return Preparation Services $5.0

7299 Miscellaneous Personal Services,

N.E.C $5.0

Major Group 73 Business Services

7311 Advertising Agencies $5.0 *6

7312 Outdoor Advertising Services $5.0 *6

7313 Radio, Television, and Publishers

Advertising Representatives $5.0 *6

7319 Advertising, N.E.C $5.0 *6

7322 Adjustment and Collection Services $5.0

7323 Credit Reporting Services $5.0

7331 Direct Mail Advertising Services $5.0

7334 Photocopying and Duplicating

Services $5.0

7335 Commercial Photography $5.0

7336 Commercial Art and Graphic Design $5.0

7338 Secretarial and Court Reporting

Services $5.0

7342 Disinfecting and Pest Control

Services $5.0

7349 Building Cleaning and

Maintenance Services, N.E.C $12.0

7352 Medical Equipment Rental and

Leasing $5.0

7353 Heavy Construction Equipment

Rental and Leasing $5.0

7359 Equipment Rental and Leasing,N.E.C $5.0

7361 Employment Agencies $5.0

7363 Help Supply Services $5.0

7371 Computer Programming Services $18.0

7372 Prepackaged Software $18.0

7373 Computer Integrated Systems Design $18.0

7374 Computer Processing and Data

Preparation and Processing Services$18.0

7375 Information Retrieval Services $18.0

7376 Computer Facilities Management

Services $18.0

7377 Computer Rental and Leasing $18.0

7378 Computer Maintenance and Repair $18.0

7379 Computer Related Services, N.E.C $18.0

7381 Detective, Guard, and Armored Car

Services $9.0

7382 Security Systems Services $9.0

7383 News Syndicates $5.0

7384 Photofinishing Laboratories $5.0

7389 Business Services, N.E.C $5.0

Except Map Drafting Services, Mapmaking

(Including Aerial) and Photogrammetric

Mapping Services. $3.5

Major Group 75 Automotive Repair, Services, and Parking

7513 Truck Rental and Leasing, Without

Drivers $18.5

7514 Passenger Car Rental $18.5

7515 Passenger Car Leasing $18.5

7519 Utility Trailer and Recreational

Vehicle Rental $5.0

7521 Automobile Parking $5.0

7532 Top, Body, and Upholstery Repair

Shops and Paint Shops $5.0

7533 Automotive Exhaust System Repair

Shops $5.0

7534 Tire Retreading and Repair Shops $10.5

7536 Automotive Glass Replacement Shops $5.0

7537 Automotive Transmission Repair

Shops $5.0

7538 General Automotive Repair Shops $5.0

7539 Automotive Repair Shops, N.E.C. $5.0

7542 Carwashes $5.0

7549 Automotive Services, Except

Repair and Carwashes $5.0

Major Group 76 Miscellaneous Repair Services

7622 Radio and Television Repair Shops $5.0

7623 Refrigeration and Air-Conditioning

Service and Repair Shops $5.0

7629 Electrical and Electronic Repair

Shops, N.E.C. $5.0

7631 Watch, Clock, and Jewelry Repair $5.0

7641 Reupholstery and Furniture Repair $5.0

7692 Welding Repair $5.0

7694 Armature Rewinding Shops $5.0

7699 Repair Shops and Related Services,

N.E.C. $5.0 *9

Major Group 78 Motion Pictures

7812 Motion Picture and Video Tape

Production $21.5

7819 Services Allied to Motion Picture

Production $21.5

7822 Motion Picture and Video Tape

Distribution $21.5

7829 Services Allied to Motion Picture

Distribution $5.0

7832 Motion Picture Theaters, Except

Drive-In $5.0

7833 Drive-In Motion Picture Theaters $5.0

7841 Video Tape Rental $5.0

Major Group 79 Amusement and Recreation Services

7911 Dance Studios, Schools, and Halls $5.0

7922 Theatrical Producers (Except

Motion Picture) and Miscellaneous

Theatrical Services $5.0

7929 Bands, Orchestras, Actors, and

Other Entertainers and

Entertainment Groups $5.0

7933 Bowling Centers $5.0

7941 Professional Sports Clubs and

Promoters $5.0

7991 Physical Fitness Facilities $5.0

7993 Coin-Operated Amusement Devices $5.0

7996 Amusement Parks $5.0

7997 Membership Sports and Recreation

Clubs $5.0

7999 Amusement and Recreation Services,

N.E.C. $5.0

Major Group 80 Health Services

8011 Offices and Clinics of Doctors

of Medicine $5.0

8021 Offices and Clinics of Dentists $5.0

8031 Offices and Clinics of Doctors of

Osteopathy $5.0

8041 Offices and Clinics of

Chiropractors $5.0

8042 Offices and Clinics of Optometrists$5.0

8043 Offices and Clinics of Podiatrists $5.0

8049 Offices and Clinics of Health

Practitioners, N.E.C $5.0

8051 Skilled Nursing Care Facilities $5.0

8052 Intermediate Care Facilities $5.0

8059 Nursing and Personal Care

Facilities, N.E.C $5.0

8062 General Medical and Surgical

Hospitals $5.0

8063 Psychiatric Hospitals $5.0

8069 Specialty Hospitals, Except

Psychiatric $5.0

8071 Medical Laboratories $5.0

8072 Dental Laboratories $5.0

8082 Home Health Care Services $5.0

8092 Kidney Dialysis Centers $5.0

8093 Specialty Outpatient Facilities,

N.E.C. $5.0

8099 Health and Allied Services, N.E.C. $5.0

Major Group 81 Legal Services

8111 Legal Services $5.0

Major Group 82 Educational Services

8211 Elementary and Secondary Schools $5.0

8221 Colleges, Universities, and

Professional Schools $5.0

8222 Junior Colleges and Technical

Institutes $5.0

8231 Libraries $5.0

8243 Data Processing Schools $5.0

8244 Business and Secretarial Schools $5.0

8249 Vocational Schools, N.E.C. $5.0

8299 Schools and Educational Services,

N.E.C. $5.0

8299 Flight Training Services $18.5

Major Group 83 Social Services

8322 Individual and Family Social

Services $5.0

8331 Job Training and Vocational

Rehabilitation Services $5.0

8351 Child Day Care Services $5.0

8361 Residential Care $5.0

8399 Social Services, N.E.C. $5.0

Major Group 84 Museums, Art Galleries, and Botanical and Zoological Gardens

8412 Museums and Art Galleries $5.0

8422 Arboreta and Botanical or

Zoological Gardens $5.0

Major Group 86 Membership Organizations

8611 Business Associations $5.031641

8621 Professional Membership

Organizations $5.0

8631 Labor Unions and Similar Labor

Organizations $5.0

8641 Civic, Social, and Fraternal

Associations $5.0

8651 Political Organizations $5.0

8661 Religious Organizations $5.0

8699 Membership Organizations, N.E.C. $5.0

Major Group 87 Engineering, Accounting, Research, and Related Services

8711 Engineering Services $2.5

Except Military and Aerospace Equipment

and Military Weapons $20.0

Except Contracts and Subcontracts for

Engineering Services Awarded Under

the National En-ergy Policy Act

of 1992. $20.0

Except Marine Engineering and Naval

Architecture $13.5

8712 Architectural Services $2.5

8713 Surveying Services $2.5

8721 Accounting, Auditing, and

Bookkeeping Services $6.0

8731 Commercial Physical and Biological

Research 500 *10 Except Aircraft1, 1,500

Except Aircraft Parts, and Auxiliary

Equipment, and Aircraft Engines

and Engine Parts 1,000

Except Space Vehicles and Guided Missiles,

their Propulsion Units, their

Propulsion Units Parts, and their

Auxiliary Equipment and Parts. 1,000

8732 Commercial Economic, Sociological,

and Educational Research $5.0

8733 Noncommercial Research

Organizations $5.0

8734 Testing Laboratories $5.0

8741 Management Services $5.0

Except Conference Management Services $5.06

8742 Management Consulting Services $5.0

8743 Public Relations Services $5.0

8744 Facilities Support Management

Services $5.0 *11

Except Base Maintenance $20.0 *12

Except Environmental Remediation Services 500 *13

8748 Business Consulting Services,N.E.C.$5.0

Major Group 89 Services, not Elsewhere Classified

8999 Services, N.E.C. $5.0

Division K Nonclassifiable Establishments

9999 Nonclassifiable Establishments. $5.0

*1 SIC code 1629 Dredging: To be considered small for purposes of Government procurement, a firm must perform at least 40 percent of the volume dredged with its own equipment or equipment owned by another small dredging concern.

*2 SIC Division D Manufacturing: For rebuilding machinery or equipment on a factory basis, or equivalent, use the SIC code for a newly manu-factured product. Concerns performing major rebuilding or overhaul activities do not necessarily have to meet the criteria for being a manufac-turer although the activities may be classified under a manufacturing SIC code. Ordinary repair services or preservation are not considered re-building.

*3 SIC code 2033: For purposes of Government procurement for food canning and preserving, the standard of 500 employees excludes agricul-tural labor as defined in 3306(k) of the Internal Revenue Code, 26 U.S.C. 3306(k).

*4 SIC code 2911: For purposes of Government procurement, the firm may not have more than 1,500 employees nor more than 75,000 barrels per day capacity of petroleum-based inputs, including crude oil or bona fide feedstocks. Capacity includes owned or leased facilities as well as facilities under a processing agreement or an arrangement such as an exchange agreement or a throughput. The total product to be delivered under the contract must be at least 90 percent refined by the successful bidder from either crude oil or bona fide feedstocks.

*5 SIC code 3011: For purposes of Government procurement, a firm is small for bidding on a contract for pneumatic tires within Census Classi-fication codes 30111 and 30112, provided that:

(1) The value of tires within Census Classification codes 30111 and 30112 which it manufactured in the United States during the previous cal-endar year is more than 50 percent of the value of its total worldwide manufacture,

(2) the value of pneumatic tires within Census Classification codes 30111 and 30112 comprising its total worldwide manufacture during the preceding calendar year was less than 5 percent of the value of all such tires manufactured in the United States during that period, and

(3) the value of the principal product which it manufactured or otherwise produced, or sold worldwide during the preceding calendar year is less than 10 percent of the total value of such products manufactured or otherwise produced or sold in the United States during that period.

*6 SIC codes 4724, 6531, 7311, 7312, 7313, 7319, and 8741 (part): As measured by total revenues, but excluding funds received in trust for an unaffiliated third party, such as bookings or sales subject to commissions. The commissions received are included as revenue.

*7 A financial institution s assets are determined by averaging the assets reported on its four quarterly financial statements for the preceding year. Assets for the purposes of this size standard means the assets defined according to the Federal Financial Institutions Examination Council 034 call report form.

*8 SIC code 6515: Leasing of building space to the Federal Government by Owners: For Government procurement, a size standard of $15.0 million in gross receipts applies to the owners of building space leased to the Federal Government. The standard does not apply to an agent.

*9 SIC codes 7699 and 3728: Contracts for the rebuilding or overhaul of aircraft ground support equipment on a contract basis are classified under SIC code 3728.

*10 SIC code 8731: For research and development contracts requiring the delivery of a manufactured product, the appropriate size standard is that of the manufacturing industry.

(1) Research and Development means laboratory or other physical research and development. It does not include economic, educational, en-gineering, operations, systems, or other nonphysical research; or computer programming, data processing, commercial and/or medical laboratory testing. (2) For purposes of the Small Business Innovation Research (SBIR) program only, a different definition has been established by law. See 121.701 of these regulations.

(3) Research and development for guided missiles and space vehicles includes evaluations and simulation, and other services requiring thor-ough knowledge of complete missiles and spacecraft.

*11 Facilities Management, a component of SIC code 8744, includes establishments, not elsewhere classified, which provide overall manage-ment and the personnel to perform a variety of related support services in operating a complete facility in or around a specific building, or within another business or Government establishment. Facilities management means furnishing three or more personnel supply services which may in-clude, but are not limited to, secretarial services, typists, telephone answering, reproduction or mimeograph service, mailing service, financial or business management, public relations, conference planning, travel arrangements, word processing, maintaining files and/or libraries, switch-board operation, writers, bookkeeping, minor office equipment maintenance and repair, or use of information systems (not programming).

*12 SIC code 8744:

(1) If one of the activities of base maintenance, as defined below, can be identified with a separate industry and that activity (or industry) accounts for 50 percent or more of the value of an entire contract, then the proper size standard is that of the particular industry, and not the base maintenance size standard.

(2) Base Maintenance requires the performance of three or more separate activities in the areas of service or special trade construction in-dustries. If services are performed, these activities must each be in a separate SIC code including, but not limited to, Janitorial and Custodial Service, Fire Prevention Service, Messenger Service, Commissary Service, Protective Guard Service, and Grounds Maintenance and Land-scaping Service. If the contract requires the use of special trade contractors (plumbing, painting, plastering, carpentry, etc.), all such special trade construction activities are considered a single activity and classified as Base Housing Maintenance. Since Base Housing Maintenance is only one activity, two additional activities are required for a contract to be classified as Base Maintenance. 13 SIC code 8744: (1) For SBA assistance as a small business concern in the industry of Environmental Remediation Services, other than for Government procurement, a concern must be engaged primarily in furnishing a range of services for the remediation of a contaminated environ-ment to an acceptable condition including, but not limited to, preliminary assessment, site inspection, testing, remedial investigation, feasibility studies, remedial design, containment, remedial action, removal of contaminated materials, storage of contaminated materials and security and site closeouts. If one of such activities accounts for 50 percent or more of a concern s total revenues, employees, or other related factors, the concern s primary industry is that of the particular industry and not the Environmental Remediation Services Industry. (2) For purposes of classifying a Government procurement as Environmental Remediation Services, the general purpose of the procurement must be to restore a contaminated environment and also the procurement must be composed of activities in three or more separate industries with separate SIC codes or, in some instances (e.g., engineering), smaller sub-components of SIC codes with separate, distinct size standards. These activities may include, but are not limited to, separate activities in industries such as: Heavy Construction; Special Trade Construction; En-gineering Services; Architectural Services; Management Services; Refuse Systems; Sanitary Services, Not Elsewhere Classified; Local Trucking Without Storage; Testing Laboratories; and Commercial, Physical and Biological Research. If any activity in the procurement can be identified with a separate SIC code, or component of a code with a separate distinct size standard, and that industry accounts for 50 percent or more of the value of the entire procurement, then the proper size standard is the one for that particular industry, and not the Environmental Remediation Service size standard.

48 CFR Parts 19 and 52 [FAC 90 39; FAR Case 92 039; Item IX]

Federal Acquisition Regulation; Master Subcontracting Plans

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) to permit master subcontracting plans to be written for a three-year period and to emphasize that it is incumbent upon contractors to maintain and update master plans. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 1996.

FOR FURTHER INFORMATION CONTACT: Ms. Linda Klein at (202) 501 3775 in reference to this FAR case. For general information, contact the FAR Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501 4755. Please cite FAC 90 39, FAR case 92 039.

SUPPLEMENTARY INFORMATION:

A. Background A proposed rule was published in the Federal Register on September 8, 1994 (59 FR 46385). The proposed rule amended FAR 19.704(b) and 52.219 9 to permit master subcontracting plans to be written for a three-year period with contractors making changes/updates to master subcontracting plans as necessary. After evaluating public comments, the Councils have agreed to add language at FAR 19.704(b) stating that changes required to update master subcontracting plans are not effective until approved by the contracting officer.

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 small businesses are exempt from subcontracting plan requirements, and the rule does not change the contractor s obligation to maximize subcontracting opportunities for small business concerns. No comments were received on the impact of this rule on small entities during the public comment period.

C. Paperwork Reduction Act The Paperwork Reduction Act of 1995 (Public Law 104 13) is deemed to apply because the final rule contains information collection requirements. This final rule will result in an estimated reduction in the number of subcontract plans per year and associated hours. Consequently, a revised clearance for OMB Control Number 9000 0006 was submitted to OMB. The revised clearance has been approved through October 31, 1997. OMB Control Number 9000 0006 has recently been further revised by FAR case 94 780, and approval has been extended through March 31, 1998.

List of Subjects in 48 CFR Parts 19 and 52 Government procurement.

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division. Therefore, 48 CFR Parts 19 and 52 are amended as set forth below:

1. The authority citation for 48 CFR Parts 19 and 52 continues to read as follows: Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).

PART 19 SMALL BUSINESS PROGRAMS

2. Section 19.704 is amended in paragraph (b) by revising the second sentence and adding a third and fourth sentence to read as follows:

19.704 Subcontracting plan requirements.

* * * * *

(b) * * * Master plans shall be effective for a 3-year period after approval by the contracting officer; however, it is incumbent upon contractors to maintain and update master plans. Changes required to update master plans are not effective until approved by the contracting officer. A master plan, when incorporated in an individual plan, shall apply to that contract throughout the life of the contract.

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

3. Section 52.219 9 is amended by revising the date of the clause to read (AUG 1996) ; in paragraph (f) introductory text by removing (d) above, and inserting paragraph (d) of this clause, in its place; and revising paragraph (f)(2) of the clause 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 (Aug 1996)

* * * * *

(f) * * *

(2) the offeror ensures that the master plan is updated as necessary and provides copies of the approved master plan, including evidence of its approval, to the Contracting Officer, and

* * * * *

48 CFR Part 19

[FAC 90 39; FAR Case 92 302; Item X]

Federal Acquisition Regulation; Small Business Competitiveness Demonstration Program

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

ACTION: Interim rule adopted as final.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed to finalize without change the interim rule which was published at 59 FR 67036, December 28, 1994 (FAC 90 23, Item XIII), amending the Federal Acquisition Regulation (FAR) Part 19 to (1) extend the Small Business Competitiveness Demonstration Program through September 30, 1996; (2) specify that agencies may reinstate the use of small business set-asides as necessary to meet assigned goals, but only within the organizational unit(s) that failed to meet the small business goals; and (3) revise the description of Architectual and Engineering services as a designated industry group. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: June 20, 1996.

SUPPLEMENTARY INFORMATION:

A. Background This rule finalizes the interim rule, which implements Title II of Public Law 102 366, the Small Business Credit and Business Opportunity Enhancement Act of 1992, which revised Title VII of Public Law 100 656, Small Business Competitiveness Demonstration Program. The Office of Federal Procurement Policy published an interim policy directive in the Federal Register at 58 FR 19849, April 16, 1993, revising the current directive dated August 31, 1989, to include revisions based on Title II.

On December 28, 1994, the interim rule was published in the Federal Register with a request for comment. Two responses were received. No changes were made to the interim rule as a result of the responses. The interim rule has been adopted as a final rule without change.

B. Regulatory Flexibility Act The final rule implements statutory revisions included in the revisions to the OFPP policy directive. OFPP prepared the appropriate regulatory flexibility statements as part of the revisions to the OFPP policy directive published in the Federal Register.

C. Paperwork Reduction Act The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 19 Government procurement.

Interim Rule Adopted as Final Without Change

Accordingly, the interim rule amending 48 CFR Part 19, which was published at 59 FR 67036, December 28, 1994 (FAC 90 23, Item XIII), is adopted as a final rule without change. The authority citation for 48 CFR Part 19 continues to read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c). Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division.

48 CFR Parts 22 and 52

[FAC 90 39; FAR Case 93 615; Item XI]

Federal Acquisition Regulation; Use of Convict Labor

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) to reflect changes in the statutory restrictions on employment of convict labor in the performance of Government contracts. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 1996.

FOR FURTHER INFORMATION CONTACT: Mr. Jack O Neill at (202) 501 3856 in reference to this FAR case. For general information, contact the FAR Secretariat, Room 4037, GS Building,31644 Federal Register / Vol. 61, No. 120 / Thursday, June 20, 1996 / Rules and Regulations Washington, DC 20405 (202) 501 4755. Please cite FAC 90 39, FAR case 93 615.

SUPPLEMENTARY INFORMATION:

A. Background A proposed rule was published in the Federal Register on September 6, 1994 (59 FR 46020). The proposed rule amended FAR Subpart 22.2 and the clause at 52.222 3 to (1) remove all references to 18 U.S.C. 4082(c)(2), which now only applies to offenses committed prior to November 1, 1987; (2) reflect the addition of the Commonwealth of the Northern Mariana Islands to the jurisdictions covered by Executive Order 11755; and (3) include further information regarding the requirements of Executive Order 11755, as amended by Executive Order 12608. No substantive comments were received on the proposed rule during the public comment period. The Councils, therefore, agreed to adopt the proposed rule as a final rule without change.

C. Paperwork Reduction Act The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 22 and 52 Government procurement.

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division. Therefore, 48 CFR Parts 22 and 52 are amended as set forth below:

1. The authority citation for 48 CFR Parts 22 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 22 APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

2. Section 22.201 is revised to read as follows:

§ 22.201 General.

(a) Executive Order 11755, December 29, 1973, as amended by Executive Order 12608, September 9, 1987, and Executive Order 12943, December 13, 1994, states: The development of the occupational and educational skills of prison inmates is essential to their rehabilitation and to their ability to make an effective return to free society. Meaningful employment serves to develop those skills. It is also true, however, that care must be exercised to avoid either the exploitation of convict labor or any unfair competition between convict labor and free labor in the production of goods and services. The Executive order does not prohibit the contractor, in performing the contract, from employing

(1) Persons on parole or probation;

(2) Persons who have been pardoned or who have served their terms;

(3) Federal prisoners; or

(4) Nonfederal prisoners authorized to work at paid employment in the community under the laws of a jurisdiction listed in the Executive order if

(i) The worker is paid or is in an approved work training program on a voluntary basis;

(ii) Representatives of local union central bodies or similar labor union organizations have been consulted;

(iii) Paid employment will not

(A) Result in the displacement of employed workers;

(B) Be applied in skills, crafts, or trades in which there is a surplus of available gainful labor in the locality; or

(C)Impair existing contracts for services;

(iv) The rates of pay and other conditions of employment will not be less than those for work of a similar nature in the locality where the work is being performed; and

(v) The Attorney General of the United States has certified that the work-release laws or regulations of the jurisdiction involved are in conformity with the requirements of Executive Order 11755, as amended. (b) Department of Justice regulations authorize the Director of the Bureau of Justice Assistance to exercise the power and authority vested in the Attorney General by the Executive order to certify and to revoke the certification of work-release laws or regulations (see 28 CFR 0.94 1(b)).

22.202 [Amended] 3. Section 22.202 is amended in the introductory paragraph by inserting after Samoa, the Commonwealth of the Northern Mariana Islands, .

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

4. Section 52.222 3 is revised to read as follows:

52.222 3 Convict labor.

As prescribed in 22.202, insert the following clause: Convict Labor (Aug 1996)

The Contractor agrees not to employ in the performance of this contract any person undergoing a sentence of imprisonment which has been imposed by any court of a State, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or the Trust Territory of the Pacific Islands. This limitation, however, shall not prohibit the employment by the Contractor in the performance of this contract of persons on parole or probation to work at paid employment during the term of their sentence or persons who have been pardoned or who have served their terms. Nor shall it prohibit the employment by the Contractor in the performance of this contract of persons confined for violation of the laws of any of the States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or the Trust Territory of the Pacific Islands who are authorized to work at paid employment in the community under the laws of such jurisdiction, if

(a)(1) The worker is paid or is in an approved work training program on a voluntary basis;

(2) Representatives of local union central bodies or similar labor union organizations have been consulted;

(3) Such paid employment will not result in the displacement of employed workers, or be applied in skills, crafts, or trades in which there is a surplus of available gainful labor in the locality, or impair existing contracts for services; and

(4) The rates of pay and other conditions of employment will not be less than those paid or provided for work of a similar nature in the locality in which the work is being performed; and

(b) The Attorney General of the United States has certified that the work-release laws or regulations of the jurisdiction involved are in conformity with the requirements of Executive Order 11755, as amended by Executive Orders 12608 and 12943.

(End of clause)

48 CFR Parts 23 and 52

[FAC 90 39; FAR Case 93 307; Item XII]

Federal Acquisition Regulation; Ozone Executive Order AGENCIES:

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

ACTION: Interim rule adopted as final with changes.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed to convert the interim rule published at 60 FR 28500, May 31, 1995, to a final rule with changes to amend the Federal Acquisition Regulation (FAR) to provide policy for the acquisition of items that contain or are manufactured with ozone-depleting substances. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: June 20, 1996.

SUPPLEMENTARY INFORMATION:

A. Background

The Environmental Protection Agency (EPA) promulgated 40 CFR Part 82, Subpart D, to satisfy EPA s obligation under Section 613, Title VI of the Clean Air Act Amendments of 1990. The EPA rule requires each department, agency, and instrumentality of the United States to conform its procurement regulations to the policies and requirements of Title VI of the Clean Air Act and to maximize the substitution of safe alternatives for ozone-depleting substances as identified under Section 612 of the Act. The EPA rule complements Executive Order 12843, Procurement Requirements and Policies for Federal Agencies for Ozone-Depleting Substances (58 FR 21881, April 23, 1993). Both the Executive Order and the EPA rule require that new contracts provide that any acquired products which contain or are manufactured with ozone-depleting substances be labeled in the manner and to the extent required by 42 U.S.C. 7671j (b),(c), and (d) and 40 CFR Part 82, Subpart E. On May 31, 1995 (60 FR 28500), the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council published an interim rule to implement the EPA regulations and the Executive Order.

This final FAR rule contains revisions resulting from public comments received in response to the interim rule. Several respondents questioned whether the interim rule went beyond the labeling requirements in Section 611 of the 1990 amendments to the Clean Air Act (42 U.S.C. 7671j) and its implementing EPA regulations at 40 CFR. This confusion has been resolved by replacing the definitions of Class I substance and Class II substance with a definition of ozone-depleting substance , and by revising the clause at 52.223 11 to clarify that labeling shall be in accordance with 42 U.S.C. 7671j and 40 CFR Part 82. The intent of the rule is to stay within the bounds of the Clean Air Act and the EPA regulations.

B. Regulatory Flexibility Act

The Regulatory Flexibility Act, 5 U.S.C. 601, et seq., applies to this final rule and a Final Regulatory Flexibility Analysis has been performed. A copy of the analysis may be obtained from the FAR Secretariat.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 23 and 52 Government procurement.

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division.

Interim Rule Adopted as Final With Changes

Accordingly, the interim rule amending 48 CFR Parts 23 and 52 which was published at 60 FR 28500, May 31, 1995, is adopted as final with changes as set forth below:

1. The authority citation for 48 CFR Parts 23 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 23 ENVIRONMENT, CONSERVATION, OCCUPATIONAL SAFETY, AND DRUG-FREE WORKPLACE

23.800 [Amended]

2. Section 23.800 is amended by removing the last sentence.

3. Section 23.802 is revised to read as follows:

23.802 Definition. Ozone-depleting substance means

(a) Any substance designated as Class I by EPA (40 CFR part 82), including but not limited to chlorofluorocarbons, halons, carbon tetrachloride, and methyl chloroform; or

(b) Any substance designated as Class II by EPA (40 CFR part 82), including but not limited to hydrochlorofluorocarbons.

23.803 [Amended]

4. Section 23.803 is amended in paragraph (b)(2) by removing the period and inserting , except in the case of Class I substances being used for specified essential uses, as identified under 40 CFR 82.4(r).

5. Section 23.804 is revised to read as follows:

23.804 Contract clauses.

Except for contracts to be performed outside the United States, its possessions, and Puerto Rico, the contracting officer shall insert the clause at:

(a) 52.223 11, Ozone-Depleting Substances, in solicitations and contracts for ozone-depleting substances or for supplies that may contain or be manufactured with ozone-depleting substances.

(b) 52.223 12, Refrigeration Equipment and Air Conditioners, in solicitations and contracts for services when the contract includes the maintenance, repair, or disposal of any equipment or appliance using ozone-depleting substances as a refrigerant, such as air conditioners, including motor vehicles, refrigerators, chillers, or freezers.

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

6. Section 52.223 11 is revised to read as follows:

52.223 11 Ozone-Depleting Substances.

As prescribed in 23.804(a), insert the following clause:

Ozone-Depleting Substances (Jun 1996)

(a) Definitions. Ozone-depleting substance, as used in this clause, means any substance designated as Class I by the Environmental Protection Agency (EPA) (40 CFR Part 82),including but not limited to chlorofluorocarbons, halons, carbon tetrachloride, and methyl chloroform; or any substance designated as Class II by EPA (40 CFR Part 82), including but not limited to hydrochlorofluorocarbons.

(b) The Contractor shall label products which contain or are manufactured with ozone-depleting substances in the manner and to the extent required by 42 U.S.C. 7671j (b), (c), and (d) and 40 CFR Part 82, Subpart E, as follows:

WARNING: Contains (or manufactured with, if applicable)

*, a substance(s) which harm(s) public health and environment by destroying ozone in the upper atmosphere. ___________________ * The Contractor shall insert the name of the substance(s).

(End of clause)

48 CFR Parts 25 and 52

[FAC 90 39; FAR Case 95 304; Item XIII]

Federal Acquisition Regulation; Uruguay Round (1996 Code)

AGENCIES:

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

ACTION:

Interim rule adopted as final.

SUMMARY:

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council are finalizing without further change the interim rule on the renegotiated General Agreement on Tariffs and Trade (GATT) Government Procurement Agreement (1996 Code) (Uruguay Round). This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: June 20, 1996.

SUPPLEMENTARY INFORMATION:

A. Background This rule finalizes without further change the interim rule, published in the Federal Register on December 29, 1995 (60 FR 67514), which implemented the Uruguay Round Agreement Act, Public Law 103 465. No public comments were received in response to the interim rule.

B. Regulatory Flexibility Act

The Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration certify that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule does not impose any new requirements on contractors, large or small. The rule primarily changes the list of designated foreign countries and extends applicability of the Trade Agreements Act to all agencies for supply and construction contracts over certain dollar thresholds. However, those contracts which are now subject to the Trade Agreements Act were already subject to the Memorandum of Understanding between the United States of America and the European Community on Government Procurement. This change will have minimal impact on U.S. firms. The rule does not diminish existing preferences for small businesses, because purchases under small and small disadvantaged business preference programs are exempted from the Trade Agreements Act.

C. Paperwork Reduction Act

The final rule does not impose any new reporting or recordkeeping requirements which require OMB approval under 44 U.S.C. 3501, et seq.

Contractors, which previously were required to respond to the now deleted provision at 52.225 16, Buy American Act Supplies under European Community Agreement Certificate, will now be required to respond to the comparable provision at 52.225 8, Buy American Act Trade Agreements Balance of Payments Program Certificate (OMB Control No. 9000 0046).

List of Subjects in 48 CFR Parts 25 and 52 Government procurement.

Interim Rule Adopted as Final Accordingly, the interim rule amending 48 CFR Parts 25 and 52, which was published at 60 FR 67514, December 29, 1995, is adopted as final without further change. The authority citation for 48 CFR Parts 25 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).

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division.

48 CFR Parts 25, 27, and 52

[FAC 90 39, FAR Case 93 310, Item XIV]

Federal Acquisition Regulation; Implementation of the North American Free Trade Agreement Implementation Act

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

ACTION: Revised interim rule with request for comment.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed to a revised interim rule implementing the North American Free Trade Agreement (NAFTA) Implementation Act. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

DATES: Effective Date: June 20, 1996. Comment Date: Comments should be submitted to the FAR Secretariat at the address shown below on or before August 19, 1996, to be considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to: General Services Administration, FAR Secretariat (MVRS), 18th & F Streets, NW., Room 4035, Attn: Ms. Beverly Fayson, Washington, DC 20405. Please cite FAC 90 39, FAR case 93 310 in all correspondence related to this case.

A. Background While the North American Free Trade Agreement (NAFTA) remains in effect, the Canadian Free Trade Agreement (CFTA) is suspended. The CFTA interim rule published December 30, 1988 (53 FR 53340, FAC 84 41, FAR case 88 070), which revised the FAR coverage concerning Canadian products, has been revised and updated by FAR case 93 310, which implements NAFTA. As a result, FAR case 88 070 was closed into FAR case 93 310.

An interim rule was published January 5, 1994 (59 FR 544, FAC 90 19, FAR case 93 310), to implement NAFTA. Based on the analysis of public comments, the interim rule has been revised to

(1) Add language to FAR 25.402 to address the applicability of NAFTA to services.

(2) Implement Article 1709(10) of NAFTA and Section 6 of Executive Order 12889 of December 27, 1993. FAR 27.208 is added to make contracting personnel aware of the requirements to obtain authorization from the owner of technology covered by a valid patent prior to use by or for the Federal Government and of waivers permitted under Section 6 of Executive Order 12889.

(3) Revise 52.212 3 and 52.212 5 to reflect changes to 52.225 20 and 52.225 21, accomplished in this revised interim rule.

(4) Add alternates for the provision at 52.225 20 and the clause at 52.225 21 for use in procurements between $25,000 and $50,000. (5) Add a new clause 52.225 22, Balance of Payments Program Construction Materials NAFTA, for construction contracts awarded outside the United States with an estimated value over $6,500,000.

B. Regulatory Flexibility Act

The amendments in this revised interim rule are not expected to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., because (1) the new clause, Balance of Payments Program Construction Materials NAFTA, is only for construction contracts awarded outside the United States; (2) the new coverage at 27.208 pertains only to patents held by parties from NAFTA countries; and (3) other changes are primarily for clarification or editorial. An Initial Regulatory Flexibility Analysis (IRFA) was prepared and provided to the Chief Counsel for Advocacy for the Small Business Administration when the interim rule was issued in January 1994. A copy of the IRFA may be obtained from the FAR Secretariat. Comments are invited. Comments from small entities concerning the affected FAR subparts will be considered in accordance with 5 U.S.C. 610. Such comments must be submitted separately and cite 5 U.S.C.601 et seq. (FAC 90 39, FAR case 93 310), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of OMB under 44 U.S.C. 3501 et seq.

D. Determination to Issue an Interim Rule

A determination has been made under the authority of the Secretary of Defense (DOD), the Administrator of General Services (GSA), and the Administrator of the National Aeronautics and Space Administration (NASA) that compelling reasons exist to promulgate this revised interim rule without prior opportunity for public comment. This action is necessary because the North American Free Trade Agreement Implementation Act, signed into law on December 8, 1993, became effective on January 1, 1994, and several substantive changes to the existing interim rule are needed to fully implement the Act. However, pursuant to Public Law 98 577 and FAR 1.501, public comments received in response to this interim rule will be considered in the formation of the final rule.

List of Subjects in 48 CFR Parts 25, 27, and 52 Government procurement.

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division. Therefore, 48 CFR parts 25, 27, and 52 are amended as set forth below

: 1. The authority citation for 48 CFR parts 25, 27, 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 25 FOREIGN ACQUISITION

2. Section 25.305 is amended in the section heading and in the heading of paragraph (c) by revising the word clause to read clauses ; designating the existing paragraph (c) as (c)(1); and adding paragraph (c)(2) to read as follows:

25.305 Solicitation provision and contract clauses.

* * * * *

(c) * * *

(2) For construction contracts outside the United States, with an estimated value of $6,500,000 or more, insert the clause at 52.225 22, Balance of Payments Program Construction Materials NAFTA.

3. Section 25.402 is amended by adding paragraph (g) to read as follows:

25.402 Policy.

* * * * *

(g) The procedures in 25.405 apply to the acquisition of NAFTA country services. These are services provided by a firm established in a NAFTA country under service contracts with an estimated acquisition value of $50,000 or more ($6,500,000 or more for construction), except for the following excluded services (Federal Service Code or Category from the Federal Procurement Data System Product/ Service Code Manual is indicated in parentheses):

(1) Information processing and related telecommunications services (D):

(i) Automated data processing (ADP) telecommunications and transmission services (D304).

(ii) ADP teleprocessing and timesharing services (D305). (iii) Telecommunications network management services (D316). (iv) Automated news services, data services, or other information services (D317).

(v) Other ADP and telecommunications services (D399).

(2) Maintenance, repair, modification, rebuilding, and installation of equipment (J):

(I) Maintenance, repair, modification, rebuilding, and installation of equipment related to ships (J019).

(ii) Non-nuclear ship repair (J998).

(3) Operation of Government-owned facilities (M):

(I) All facilities operated by the Department of Defense, Department of Energy, and the National Aeronautics and Space Administration.

(ii) Research and development facilities (M180).

(4) Utilities all classes (S).

(5) Transportation, travel, and relocation services all classes except V503 travel agent services (V).

(6) All services purchased in support of military forces overseas.

(7) Construction dredging services.

4. Section 25.408 is amended by revising paragraphs (a)(3) and (a)(4) to read as follows:

25.408 Solicitation provisions and contract clauses.

(a) * * *

(3) The provision at 52.225 20, Buy American Act North American Free Trade Agreement Implementation Act Balance of Payments Program Provision, in solicitations containing the clause at 52.225 21. Use the provision with its Alternate I if the acquisition value is between $25,000 and $50,000; and

(4) The clause at 52.225 21, Buy American Act North American Free Trade Agreement Implementation Act Balance of Payments Program, in solicitations and contracts for supplies where the contracting officer has determined that the acquisition is not subject to the Trade Agreements Act but is subject to NAFTA. Use the clause with its Alternate I if the acquisition value is between $25,000 and $50,000.

* * * * *

PART 27 PATENTS, DATA, AND COPYRIGHTS

5. Section 27.208 is added to read as follows:

27.208 Use of patented technology under the North American Free Trade Agreement.

(a) The requirements of this section apply to the use of technology covered by a valid patent when the patent holder is from a country that is a party to the North American Free Trade Agreement (NAFTA).

(b) Article 1709(10) of NAFTA generally requires a user of technology covered by a valid patent to make a reasonable effort to obtain authorization prior to use of the patented technology. However, NAFTA provides that this requirement for authorization may be waived in situations of national emergency or other circumstances of extreme urgency, or public noncommercial use. (c) Section 6 of Executive Order 12889 of December 27, 1993, waives the requirement to obtain advance authorization for

(1) An invention used or manufactured by or for the Federal Government, except that the patent owner must be notified whenever the agency or its contractor, without making a patent search, knows or has demonstrable reasonable grounds to know that an invention described in and covered by a valid U.S. patent is or will be used or manufactured without a license; and

(2) The existence of a national emergency or other circumstances of extreme urgency, except that the patent owner must be notified as soon as it is reasonably practicable to do so.

(d) Section 6(c) of Executive Order 12889 provides that the notice to the patent owner does not constitute an admission of infringement of a valid privately owned patent.

(e) When addressing issues regarding compensation for the use of patented technology, Government personnel should be advised that NAFTA uses the term adequate remuneration. Executive Order 12889 equates remuneration to reasonable and entire compensation as used in 28 U.S.C. 1498, the statute which gives jurisdiction to the U.S. Court of Federal Claims to hear patent and copyright cases involving infringement by the U.S. Government.

(f) Depending on agency procedures, either the technical/requiring activity or the contracting officer shall ensure compliance with the notice requirements of NAFTA Article 1709(10). A contract award should not be suspended pending notification to the right holder.

(g) When questions arise regarding the notice requirements or other matters relating to this section, the contracting officer should consult with legal counsel.

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

6. Section 52.212 3 is amended

(a) By revising the date of the provision to read (JUN 1996) ;

(b) Redesignating paragraphs (g)(1) through (g)(4) as (g)(1)(i) through (g)(1)(iv) and redesignating paragraph (g) as (g)(1) ; removing (NAFTA) each time it appears (twice); and removing the word Certificate ;

(c) Revising newly designated paragraphs (g)(1)(i), (g)(1)(iii), and (g)(1)(iv); and (d) Adding paragraph (g)(2) to read as follows:

52.212 3 Offeror Representations and Certifications Commercial Items.

* * * * *

Offeror Representations and Certifications Commercial Items (JUN 1996)

* * * * *

(g)(1) * * *

(i) Each end product being offered, except those listed in paragraph (g)(1)(ii) of this provision, is a domestic end product (as defined in the clause entitled Buy American Act North American Free Trade Agreement Implementation Act Balance of Payments Program. Components of unknown origin have been considered to have been mined, produced, or manufactured outside the United States.

* * * * *

(iii) 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)(1)(ii) of this provision, offerors must identify below those excluded end products that are NAFTA country end products.

Products that are not identified below will not be deemed NAFTA country end products.

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)

(iv) Offers will be evaluated in accordance with Part 25 of the Federal Acquisition Regulation. In addition, if this solicitation is for supplies for use outside the United States, an evaluation factor of 50 percent will be applied to offers of end products that are not domestic or NAFTA country end products.

(2) Alternate I. If Alternate I to the clause at 52.225 21 is included in this solicitation, substitute the following paragraph (g)(1)(iii) for paragraph (g)(1)(iii) of this provision: (g)(1)(iii) Offers will be evaluated by giving certain preferences to domestic end products or Canadian end products over other end products. In order to obtain these preferences in the evaluation of each excluded end product listed in paragraph (b) of this provision, offerors must identify below those excluded end products that are Canadian end products. Products that are not identified below will not be deemed Canadian end products.

The following supplies qualify as Canadian 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)

7. Section 52.212 5 is amended by revising the date of the clause to read (JUN 1996) ; paragraph (b)(15) is redesignated as (b)(15)(i); and (b)(15)(ii) is added to read as follows:

52.212 5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders Commercial Items.

* * * * *

Contract Terms and Conditions Required to Implement Statutes or Executive Orders Commercial Items (Jun 1996)

* * * * *

(b) * * *

__________ (15)(ii) Alternate I of 52.225 21.

* * * * *

8. Section 52.225 20 is amended in the section heading and provision heading by revising the word Certificate to read Provision ; revising the date of the provision to read (JUN 1996) ; revising paragraphs (a), (c), and (d) of the provision; and adding Alternate I to read as follows:

52.225 20 Buy American Act North American Free Trade Agreement Implementation Act Balance of Payments Program Provision.

* * * * *

Buy American Act North American Free Trade Agreement Implementation Act Balance of Payments Program Provision (Jun 1996)

(a) Each end product being offered, except those listed in paragraph (b) of this provision, is a domestic end product (as defined in the clause entitled Buy American Act North American Free Trade Agreement Implementation Act Balance of Payments Program ). Components of unknown origin have been considered to have been mined, produced, or manufactured outside the United States.

* * * * *

(c) 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 (b) of this provision, offerors must identify below those excluded end products that are NAFTA country end products. Products that are not identified below will not be deemed NAFTA country end products.

Line item no. Country of origin

__________________________________________________________________________________________________________________________________

(List as necessary)

(d) Offers will be evaluated in accordance with Part 25 of the Federal Acquisition Regulation. In addition, if this solicitation is for supplies for use outside the United States, an evaluation factor of 50 percent will be applied to offers of end products that are not domestic or NAFTA country end products.

(End of provision)

Alternate I (JUN 1996). As prescribed in 25.408(a)(3), substitute the following paragraph (c) for paragraph (c) of the basic provision:

(c) Offers will be evaluated by giving certain preferences to domestic end products or Canadian end products over other end products. In order to obtain these preferences in the evaluation of each excluded end product listed in paragraph (b) of this provision, offerors must identify below those excluded end products that are Canadian end products. Products that are not identified below will not be deemed Canadian end products.

_____________________________________________________________ (Insert line item numbers)

9. Section 52.225 21 is amended by revising the date of the clause to read (JUN 1996) ; in the fourth sentence of paragraph (c) by revising the word certifying to read specifying ; removing paragraph (d) of the clause; and by adding Alternate I to read as follows:

52.225 21 Buy American Act North American Free Trade Agreement Implementation Act Balance of Payments Program.

* * * * *

Buy American Act North American Free Trade Agreement Implementation Act Balance of Payments Program (Jun 1996)

* * * * *

Alternate I (JUN 1996).

As prescribed in 25.408(a)(4), add the following definition to paragraph (a) and substitute the following paragraph (c) for paragraph (c) of the basic clause:

Canadian end product means an article that (1) is wholly the growth, product, or manufacture of Canada, or (2) in the case of an article which consists in whole or in part of materials from another country or instrumentality, has been substantially transformed in Canada into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was transformed. The term refers to a product offered for purchase under a supply contract, but for purposes of calculating the value of the end product includes services (except transportation services) incidental to its supply; provided, that the value of those incidental services does not exceed that of the product itself.

(c) The Contracting Officer has determined that NAFTA applies to this acquisition. Unless otherwise specified, NAFTA applies to all items in the schedule. The Contractor agrees to deliver under this contract only domestic end products unless, in its offer, it specifies delivery of foreign end products in the provision entitled Buy American Act North American Free Trade Agreement Implementation Act Balance of Payments Program Certificate. An offer specifying that a Canadian end product will be supplied requires the Contractor to supply a Canadian end product or, at the Contractor s option, a domestic end product.

10. Section 52.225 22 is added to read as follows:

52.225 22 Balance of Payments Program Construction Materials NAFTA.

As prescribed in 25.305(c)(2), insert the following clause:

Balance of Payments Program Construction Materials NAFTA (Jun 1996)

(a) Definitions. As used in this clause

Components means those articles, materials, and supplies incorporated directly into construction materials.

Construction material means an article, material, or supply brought to the construction site for incorporation into the building or work. Construction material also includes an item brought to the site pre-assembled from articles, materials, or supplies. However, emergency life safety systems, such as emergency lighting, fire alarm, and audio evacuation systems, which are discrete systems incorporated into a public building or work and which are produced as a complete system, shall be evaluated as a single and distinct construction material regardless of when or how the individual parts or components of such systems are delivered to the construction site.

Domestic construction material means (1) an unmanufactured construction material mined or produced in the United States, or (2) a construction material manufactured in the United States, if the cost of its components mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. Components of foreign origin of the same class or kind as the construction materials determined to be unavailable pursuant to subparagraph 25.202(a)(3) of the Federal Acquisition Regulation shall be treated as domestic.

NAFTA country construction material means a construction material that (1) is wholly the growth, product, or manufacture of a NAFTA country, or (2) in the case of a construction material which consists in whole or in part of materials from another country or instrumentality, has been substantially transformed in a NAFTA country into a new and different construction material distinct from the materials from which it was transformed.

North American Free Trade Agreement (NAFTA) country means Canada and Mexico.

(b) The Balance of Payments Program provides that the Government give preference to domestic construction material.

(c)The Contractor agrees that only domestic construction material or NAFTA country construction material will be used by the Contractor, subcontractors, material men, and suppliers in the performance of this contract, except for other foreign construction materials, if any, listed in this contract.

(End of clause)

48 CFR Part 25

[FAC 90 39;

FAR Case 95 030; Item XV]

Federal Acquisition Regulation; Caribbean Basin Countries

AGENCIES:

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) to implement the extension by the U.S. Trade Representative of the date of eligibility under the Trade Agreements31650 Federal Register / Vol. 61, No. 120 / Thursday, June 20, 1996 / Rules and Regulations Act for products of Caribbean Basin countries. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: September 30, 1995.

SUPPLEMENTARY INFORMATION:

A. Background This final rule amends FAR 25.402(b) by changing the date 1995 to 1996. Products of Caribbean Basin countries were to be treated as eligible products until September 30, 1995, unless otherwise extended by the U.S. Trade Representative (USTR) by means of a Federal Register notice. On October 3, 1995, the USTR published an extension through September 30, 1996 (60 FR 51822).

B. Regulatory Flexibility Act

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 25 Government procurement. Dated:

June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division. Therefore, 48 CFR Part 25 is amended as set forth below:

PART 25 FOREIGN ACQUISITION

1. The authority citation for 48 CFR Part 25 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).

§ 25.402 [Amended]

2. Section 25.402 is amended in the first sentence of paragraph (b) by removing (see 51 FR 6964 6965, February 27, 1986) ; and in the second sentence by revising 1995 to read 1996 . [FR Doc. 96 14530 Filed 6 19 96; 8:45 am]

48 CFR Parts 25 and 52 [FAC 90 39; FAR Case 92 048; Item XVI] RIN 9000 AF83 Federal Acquisition Regulation; Fluctuating Exchange Rates

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) to provide guidance and a solicitation provision regarding evaluation of foreign currency offers. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 1996.

FOR FURTHER INFORMATION CONTACT: Mr. Peter O Such at (202) 501 1759 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 39, FAR case 92 048.

SUPPLEMENTARY INFORMATION:

A. Background

An amendment to FAR Subpart 25.5 and a corresponding solicitation provision were published in the Federal Register as a proposed rule, with a request for comments (see 59 FR 16391, April 6, 1994). Two responses were received. The Council s analysis of those comments resulted in a revision to the rule to delete commercially available in the description of the current market exchange rate used in the evaluation of foreign currency offers.The final rule also adds language at 25.501(b) and 52.225 4 to address evaluation of offers in negotiated acquisitions, when award is based on initial offers received.

B. Regulatory Flexibility Act

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 25 and 52 Government procurement.

Dated: June 4, 1996. Edward C. Loeb, Director, Federal Acquisition Policy Division. Therefore, 48 CFR Parts 25 and 52 are amended as set forth below:

1. The authority citation for 48 CFR Parts 25 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 25 FOREIGN ACQUISITION

2. In part 25, subpart 25.5, the heading is revised to read as follows:

Subpart 25.5 Use of Foreign Currency

3. Section 25.501 is revised to read as follows: 25.501 Policy. (a) Unless a specific currency is required by international agreement or by the Trade Agreements Act (see 25.405(d)), contracting officers shall determine whether solicitations for contracts to be entered into and performed outside the United States will require submission of offers either in U.S. currency or in a specified foreign currency. In unusual circumstances, the contracting officer may permit submission of offers in other than a specified currency.

(b) To ensure a fair evaluation of offers, solicitations should generally require all offers to be priced in the same currency. However, if submission of offers in other than a specified currency is permitted, the contracting officer shall convert the offered prices to U.S. currency for evaluation purposes. The contracting officer shall use the current market exchange rate from a commonly used source in effect on the

(1) Date of bid opening for sealed bid acquisitions,

(2) Closing date for negotiated acquisitions when award is based on initial offers, or

(3) Due date for receipt of best and final offers, for other negotiated acquisitions.

(c) If contracts are priced in foreign currency, agencies must ensure that adequate funds are available to cover currency fluctuations in order to avoid a violation of the Anti-Deficiency Act.

4. Section 25.502 is added to read as follows:

25.502 Solicitation provision.

The contracting officer shall insert the provision at 52.225 4, Evaluation of Foreign Currency Offers, in solicitations if the use of other than a specified currency is permitted. The contracting officer shall insert the source of the rate to be used in the evaluation of offers.

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

5. Section 52.225 4 is added to read as follows:

52.225 4 Evaluation of Foreign Currency Offers.

As prescribed in 25.502, insert the following provision:

EVALUATION OF FOREIGN CURRENCY OFFERS (AUG 1996)

If offers are received in more than one currency, offers shall be evaluated by converting the foreign currency to United States currency using (insert source of rate) in effect on the (a) date of bid opening for sealed bid acquisitions, (b) closing date for negotiated acquisitions when award is based on initial offers, or (c) due date for receipt of best and final offers, for other acquisitions.

(End of provision) 6 19 96;

48 CFR Parts 28 and 52

[FAC 90 39, FAR Case 95 301, Item XVII]

Federal Acquisition Regulation; Irrevocable Letters of Credit and Alternatives to Miller Act Bonds

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

ACTION: Interim rule with request for comment.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed to an interim rule to amend the Federal Acquisition Regulation (FAR) to implement OFPP Policy Letter 91 4 (previously considered under FAR case 91 113, Irrevocable Letters of Credit) and provide alternatives to Miller Act Bonds, as required by Section 4104(b) of the Federal Acquisition Streamlining Act of 1994 (FASA) (Pub. L. 103 355). This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

DATES: Effective Date: June 20,1996. Comment Date: Comments should be submitted to the FAR Secretariat at the address shown below on or before August 19, 1996 to be considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to: General Services Administration, FAR Secretariat (MVRS), 18th & F Streets, NW, Room 4035, Attn: Ms. Beverly Fayson, Washington, DC 20405. Please cite FAC 90 39, FAR case 95 301 in all correspondence related to this case.

FOR FURTHER INFORMATION CONTACT: Jack O Neill at (202) 501 3856 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 39, FAR case 95 301.

SUPPLEMENTARY INFORMATION:

A. Background

This interim rule amends FAR Parts 28 and 52 to provide for use of Irrevocable Letters of Credit as an alternative to corporate or individual sureties as security for Miller Act bonds, and provides alternatives to Miller Act bonds for construction contracts valued at $25,000 to $100,000, which are no longer subject to the Miller Act, in accordance with Section 4104(b)(1) of FASA.

B. Regulatory Flexibility Act

The interim rule 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 provides alternatives to Miller Act bonds for construction contracts valued at $25,000 to $100,000. In addition, it offers Irrevocable Letters of Credit as an alternative to surety on Miller Act bonds for construction contracts over $100,000. These alternatives may be helpful to both large and small construction contractors. An Initial Regulatory Flexibility Analysis (IRFA) has been prepared and will be provided to the Chief Counsel for Advocacy for the Small Business Administration. A copy of the IRFA may be obtained from the FAR Secretariat. Comments are invited. Comments from small entities concerning the affected FAR subpart will be considered in accordance with 5 U.S.C. 610. Such comments must be submitted separately and cite 5 U.S.C 601, et seq. (FAR Case 95 301), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of OMB under 44 U.S.C. 3501, et seq.

D. Determination to Issue an Interim Rule

A determination has been made under the authority of the Secretary of Defense (DOD), the Administrator of General Services (GSA), and the Administrator of the National Aeronautics and Space Administration (NASA) that compelling reasons exist to promulgate this interim rule without prior opportunity for public comment. This action is necessary because Section 4104(b) of the Federal Acquisition Streamlining Act of 1994 (Public Law 103 355), regarding Irrevocable Letters of Credit and alternatives to Miller Act Bonds, requires immediate implementation. However, pursuant to Public Law 98 577 and FAR 1.501, public comments received in response to this interim rule will be considered in the formation of the final rule.

List of Subjects in 48 CFR Parts 28 and 52

Government procurement.

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division.

Therefore, 48 CFR parts 28 and 52 are amended as set forth below:

1. The authority citation for 48 CFR parts 28 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 28.001 is amended in the definition of Bond by revising the first sentence; and adding, in alphabetical order, the definition Irrevocable letter of credit to read as follows:

28.001 Definitions.

* * * * *

Bond means a written instrument executed by a bidder or contractor (the principal ), and a second party ( the surety or sureties ) (except as provided in 28.204), to assure fulfillment of the principal s obligations to a third party (the obligee or Government ), identified in the bond.

* * *

* * * * *

Irrevocable letter of credit (ILC) means a written commitment by a federally insured financial institution to pay all or part of a stated amount of money on demand to the Government (the beneficiary) until the expiration date of the letter. The letter of credit cannot be revoked or conditioned.

* * * * *

28.102 Performance and payment bonds and alternative payment protections for construction contracts.

3. The heading at section 28.102 is revised as set forth above.

4. Section 28.102 1 is amended in paragraph (a) introductory text by revising $25,000 to read $100,000 ; redesignating paragraph (b) as (c) and adding after the word bonds the phrase or alternative payment protection ; and adding (b)(1) and (b)(2). The revised text reads as follows:

28.102 1 General.

* * * * *

(b)(1) Pursuant to Section 4104(b)(2) of the Federal Acquisition Streamlining Act of 1994 (Public Law 103 355), for construction contracts greater than $25,000, but not greater than $100,000, the contracting officer shall select two or more of the following payment protections, giving particular consideration to inclusion of an irrevocable letter of credit as one of the selected alternatives:

(i) A payment bond.

(ii) An irrevocable letter of credit (ILC).

(iii) A tripartite escrow agreement. The prime contractor establishes an escrow account in a federally insured financial institution and enters into a tripartite escrow agreement with the financial institution, as escrow agent, and all of the suppliers of labor and material. The escrow agreement shall establish the terms of payment under the contract and of resolution of disputes among the parties. The Government makes payments to the contractor s escrow account, and the escrow agent distributes the payments in accordance with the agreement, or triggers the disputes resolution procedures if required.

(iv) Certificates of deposit. The contractor deposits certificates of deposit from a federally insured financial institution with the contracting officer, in an acceptable form, executable by the contracting officer.

(v) A deposit of the types of security listed in 28.204 1 and 28.204 2. (2) The contractor shall submit to the Government one of the payment protections selected by the contracting officer.

* * * * *

5. Section 28.102 2 is amended by

(a) Revising the heading of paragraph (b) and (b)(1) introductory text;

(b) In the last sentence of paragraph (b)(2) by removing subparagraph (1) immediately above and inserting paragraph (b)(1) of this subsection in its place;

(c) At the end of paragraph (b)(3) by removing the period and inserting , or to furnish additional alternative payment protection. in its place;

(d) In paragraph (c)(1) and the first sentence of (c)(2) by inserting after the word bonds the phrase or alternative payment protection ;

(e) In the second sentence of paragraph (c)(2) by removing the word above and inserting of this subsection in its place;

(f) Adding paragraph (d). The revised text reads as follows:

28.102 2 Amount required.

* * * * *

(b) Payment bonds or alternative payment protection. (1) The penal amount of payment bonds or alternative payment protection shall equal

* * * * *

(d) Reducing amounts. The contracting officer has the discretion to reduce the amount of security to support a bond, subject to the conditions of 28.203 5(c) or 28.204(b).

6. Section 28.102 3 is amended by revising the section heading; redesignating paragraphs (a), (b) and (c) as (a)(1), (a)(2) and (a)(3), respectively; redesignating the undesignated introductory paragraph as paragraph (a); and adding paragraph (b) to read as follows:

28.102 3 Solicitation requirements and contract clause.

* * * * *

(b) Insert the clause at 52.228 13, Alternative Payment Protections, in solicitations and contracts for construction, when the estimated or actual value exceeds $25,000 but does not exceed $100,000. Complete the clause by specifying the payment protection or protections selected (see 28.102 1(b)(1)), the penal amount required, and the deadline for submission.

7. Section 28.106 3 is amended by revising the section heading and adding paragraph (c) to read as follows:

28.106 3 Additional bond or security.

* * * * *

(c) When an ILC is used as an alternative to corporate or individual sureties as security for a performance or payment bond and the contract performance period is extended, the contracting officer shall require the contractor to provide an ILC with an appropriately extended maturity that meets the requirements of 28.204 3(f).

8. Section 28.106 5 is amended by redesignating paragraph (b) as (c); and adding a new paragraph (b) to read as follows:

§ 28.106 5 Consent of surety.

* * * * *

(b) When a contract for which performance or payment is secured by any of the types of security listed in 28.204 is modified as described in paragraph (a) of this subsection, no consent of surety is required.

* * * * *

9. Section 28.106 8 is added to read as follows:

28.106 8 Payment to subcontractors or suppliers.

The contracting officer will only authorize payment from an ILC (or any other cash equivalent security) upon a judicial determination of the rights of the parties, a signed notarized statement by the contractor that the payment is due and owed, or a signed agreement between the parties as to amount due and owed.

10. Section 28.203 5 is amended by redesignating paragraph (a)(2) as (a)(3) and revising the heading; adding a new paragraph (a)(2); and in the second sentence of paragraph (c) by removing and (2) and inserting in its place through (3) . The revised text reads as follows:

28.203 5 Release of lien.

* * * * *

(a) * * *

(2) Contracts subject to alternative payment protection (28.102 1(b)(1)). The security interest shall be maintained for the full contract performance period plus one year.

(3) Other contracts not subject to the Miller Act.

* * * * * * * *

11. Section 28.204 is revised to read as follows:

28.204 Alternatives in lieu of corporate or individual sureties.

(a) Any person required to furnish a bond to the Government may furnish any of the types of security listed in 28.204 1 through 28.204 3 instead of a corporate or individual surety for the bond. When any of those types of security are deposited, a statement shall be incorporated in the bond form pledging the security. The contractor shall execute the bond forms as the principal. Agencies shall establish safeguards to protect against loss of the security and shall return the security or its equivalent to the contractor when the bond obligation has ceased.

(b) Upon written request by any contractor securing a performance or payment bond by any of the types of security listed in 28.204 1 through 28.204 3, the contracting officer may release a portion of the security only when the conditions allowing the partial release of lien in 28.203 5(c) are met. The contractor shall, as a condition of the partial release, furnish an affidavit agreeing that the release of such security does not relieve the contractor of its obligations under the bond(s).

(c) The contractor may satisfy a requirement for bond security by furnishing a combination of the types of security listed in 28.204 1 through 28.204 3 or a combination of bonds supported by these types of security and additional surety bonds under 28.202 or 28.203. During the period for which a bond supported by security is required, the contractor may substitute one type of security listed in 28.204 1 through 28.204 3 for another, or may substitute, in whole or combination, additional surety bonds under 28.202 or 28.203.

12. Sections 28.204 3 and 28.204 4 are added to read as follows:

28.204 3 Irrevocable letter of credit (ILC).

(a) Any person required to furnish a bond has the option to furnish a bond secured by an ILC in an amount equal to the penal sum required to be secured (see 28.204). A separate ILC is required for each bond.

(b) The ILC shall be irrevocable, unconditional, expire only as provided in paragraph (f) of this subsection, and be issued by an acceptable federally insured financial institution as provided in paragraph (g) of this subsection. ILCs over $5 million must be confirmed by another acceptable financial institution that had letter of credit business of at least $25 million in the past year.

(c) To draw on the ILC, the contracting officer shall use the sight draft set forth in the clause at 52.228 14 and present it with the ILC to the issuing financial institution or the confirming financial institution (if any).

(d) If the contractor does not furnish an acceptable replacement ILC, or other acceptable substitute, at least 30 days before an ILC s scheduled expiration, the contracting officer shall immediately draw on the ILC.

(e) If, after the period of performance of a contract where ILCs are used to support payment bonds, there are outstanding claims against the payment bond, the contracting officer shall draw on the ILC prior to the expiration date of the ILC to cover these claims.

(f) Expiration dates shall be established as follows:

(1) If used as a bid guarantee, the ILC should expire no earlier than 60 days after the close of the bid acceptance period.

(2) If used as an alternative to corporate or individual sureties as security for a performance or payment bond, the offeror/contractor may submit an ILC to cover the entire period of performance or an ILC with an initial expiration date which is a minimum period of one year from the date of issuance, with a provision which states that the ILC is automatically extended without amendment for one year from the expiration date, or any future expiration date, until the period of performance is completed. The final expiration date shall be:

(i) For contracts subject to the Miller Act, the later of

(A) One year following the expected date of final payment;

(B) For performance bonds only, until completion of any warranty period; or

(C) For payment bonds only, until resolution of all claims filed against the payment bond during the one-year period following final payment.

(ii) For contracts not subject to the Miller Act, the later of

(A) 90 days following final payment; or

(B) Until completion of any warranty period for performance bonds only.

(g) The ILC shall be issued or confirmed by a federally insured financial institution rated investment grade or higher.

(1) The offeror/contractor shall provide the contracting officer a credit rating that indicates the financial institution has the required rating(s) as of the date of issuance of the ILC.

(2) If the contracting officer learns that a financial institution s rating has dropped below the required level, the contracting officer shall give the contractor 30 days to substitute an acceptable ILC or shall draw on the ILC using the sight draft in paragraph (g) of the clause at 52.228 14. (h) Additional information on credit rating services and investment grade ratings, and a copy of the Uniform Customs and Practice (UCP) for Documentary Credits, 1983 Revision, International Chamber of Commerce Publication No. 400, is contained within the Office of Federal Procurement Policy Pamphlet No. 7, Use of Irrevocable Letters of Credit. This pamphlet may be obtained by calling the Office of Management and Budget s publications office at (202) 395 7332.

28.204 4 Contract clause.

Insert the clause at 52.228 14, Irrevocable Letter of Credit, in solicitations and contracts for services, supplies, or construction, when a bid guarantee, or performance bonds, or performance and payment bonds are required.

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

13. Section 52.228 2 is amended by revising the introductory text, the date in the clause heading, and paragraph (a) of the clause; in paragraph (b) by removing or ; at the end of paragraph (c) by removing the period and replacing it with ; or ; and adding paragraph (d) to read as follows:

52.228 2 Additional Bond Security.

As prescribed in 28.106 4, insert the following clause: ADDITIONAL BOND SECURITY (JUN 1996)

* * * * *

(a) Any surety upon any bond, or issuing financial institution for other security, furnished with this contract becomes unacceptable to the Government;

* * * * *

(d) The contract performance period is extended and an irrevocable letter of credit (ILC) is used as security. If the Contractor does not furnish an acceptable extension or replacement ILC, or other acceptable substitute, at least 30 days before an ILC s scheduled expiration, the Contracting Officer has the right to immediately draw on the ILC.

(End of clause)

14. Sections 52.228 13 and 52.228 14 are added to read as follows:

52.228 13 Alternative Payment Protections.

As prescribed in 28.102 3(b), insert the following clause: ALTERNATIVE PAYMENT PROTECTIONS (JUN 1996)

(a) The Contractor shall submit one of the following payment protections:

______________________________________________________________

(b) The penal sum of the payment protection shall be in the amount of $_____.

(c) The submission of the payment protection is required by___________.

(d) The payment protection shall provide protection for the full contract performance period plus a one-year period.

(e) Except for escrow agreements and payment bonds, which provide their own protection procedures, the Contracting Officer is authorized to access funds under the payment protection when it has been alleged in writing by a supplier of labor or material that a nonpayment has occurred, and to withhold such funds pending resolution by administrative or judicial proceedings or mutual agreement of the parties.

(f) When a tripartite escrow agreement is used, the Contractor shall utilize only suppliers of labor and material who signed the escrow agreement.

(End of clause)

52.228 14 Irrevocable Letter of Credit.

As prescribed in 28.204 4, insert the following clause:

IRREVOCABLE LETTER OF CREDIT (JUN 1996)

(a) Irrevocable letter of credit (ILC), as used in this clause, means a written commitment by a federally insured financial institution to pay a stated amount of money on demand to the Government (the beneficiary), until the expiration date of the letter. Neither the financial institution nor the offeror/ Contractor can revoke or condition the letter of credit.

(b) If the offeror intends to use an ILC in lieu of a bid bond, or to support other types of bonds such as performance and payment bonds, the letter of credit and letter of confirmation formats in paragraphs (e) and (f) of this clause shall be used.

The letter of credit shall be irrevocable, unconditional, issued by an acceptable federally insured financial institution as provided in paragraph (d) of this clause, and

(1) If used as a bid guarantee, the ILC shall expire no earlier than 60 days after the close of the bid acceptance period;

(2) If used to secure a performance or payment bond, the offeror/Contractor may submit an ILC to cover the entire period of performance or may submit an ILC with an initial expiration date which is a minimum period of one year from the date of issuance, with a provision which states that the ILC is automatically extended without amendment for one year from the expiration date, or any future expiration date, until the period of performance is completed. The final expiration date shall be:

(i) For contracts subject to the Miller Act, the later of

(A) One year following the expected date of final payment;

(B) For performance bonds only, until completion of any warranty period; or

(C) For payment bonds only, until resolution of all claims filed against the payment bond during the one-year period following final payment.

(ii) For contracts not subject to the Miller Act, the later of

(A) 90 days following final payment; or

(B) Until completion of any warranty period for performance bonds only.

(d) The ILC shall be issued or confirmed by a federally insured financial institution rated investment grade or higher. The offeror/ Contractor shall provide the Contracting Officer a credit rating that indicates the financial institution has the required rating(s) as of the date of issuance of the ILC. ILCs over $5 million must be confirmed by another acceptable financial institution that had letter of credit business of at least $25 million in the past year.

(e) The following format shall be used by the issuing financial institution to create an ILC:____________________________[Issuing Financial Institution s Letterhead or Name and Address] Issue Date_________________ Irrevocable Letter of Credit No.___________ Account party s name_____________________ Account party s address _______________For Solicitation No._______________ (For reference only) TO:

[U.S. Government agency]

[U.S. Government agency s address]

1. We hereby establish this irrevocable, unconditional, and transferable Letter of Credit in your favor for one or more drawings up to United States $________. This Letter of Credit is payable at [issuing financial institution s and, if any, confirming financial institution s] office at [issuing financial institution s address and, if any, confirming financial institution s address] and expires with our close of business on __________, or any automatically extended expiration date.

2. We hereby undertake to honor your or transferee s sight draft(s) drawn on issuing and, if any, confirming financial institution, for all or any part of this credit that is presented at the office specified in paragraph 1 of this Letter of Credit on or before the expiration date or any automatically extended expiration date.

3. [This paragraph is omitted if used as a bid guarantee, and subsequent paragraphs are renumbered.] It is a condition of this Letter of Credit that it is deemed to be automatically extended without amendment for one year from the expiration date hereof, or any future expiration date, unless at least 60 days prior to any expiration date, we notify you or the transferee by registered mail, or other receipted means of delivery, that we elect not to consider this Letter of Credit renewed for any such additional period. At the time we notify you, we also agree to notify the account party (and confirming financial institution, if any) by the same means of delivery.

4. This Letter of Credit is transferable. Transfers and assignments of proceeds are to be effected without charge to either the beneficiary or the transferee/assignee of proceeds.

5. This Letter of Credit is subject to the Uniform Customs and Practice (UCP) for Documentary Credits, 1983 Revision, International Chamber of Commerce Publication No. 400, and to the extent not inconsistent therewith, to the laws of________[state of confirming financial institution, if any, otherwise state of issuing financial institution].

6. If this credit expires during an interruption of business of this financial institution as described in Article 19 of the UCP, the financial institution specifically agrees to effect payment if this credit is drawn against within 30 calendar days after the resumption of our business.

Sincerely,

[Issuing financial institution]

(f) The following format shall be used by the financial institution to confirm an ILC:

[Confirming Financial Institution s Letter-head or Name and Address]_________________________ , 19____ Our Letter of Credit Advice Number________________ Beneficiary:__________________ [U.S. Government agency] Issuing Financial Institution:_________ Issuing Financial Institution s LC No.:____Gentlemen: 1. We hereby confirm the above indicated Letter of Credit, the original of which is attached, issued by_________[name of issuing financial institution] for drawings of up to United States dollars______ /U.S. $_______and expiring with our close of business on_______ [the expiration date], or any automatically extended expiration date. 2. Draft(s) drawn under the Letter of Credit and this Confirmation are payable at our office located at __________.

3. We hereby undertake to honor sight draft(s) drawn under the Letter of Credit and this Confirmation if presented at our offices as specified herein.

4. [This paragraph is omitted if used as a bid guarantee, and subsequent paragraphs are renumbered.] It is a condition of this confirmation that it be deemed automatically extended without amendment for one year from the expiration date hereof, or any automatically extended expiration date, unless:

(a) At least sixty (60) days prior to any such expiration date we shall notify the Contracting Officer, or the transferee and the issuing financial institution, by registered mail or other receipted means of delivery, that we elect not to consider this confirmation extended for any such additional period; or

(b) The issuing financial institution shall have exercised its right to notify you or the transferee, the account party, and ourselves, of its election not to extend the expiration date of the Letter of Credit. 5. This confirmation is subject to the Uniform Customs and Practice (UCP) for Documentary Credits, 1983 Revision, International Chamber of Commerce Publication No. 400, and to the extent not inconsistent therewith, to the laws of ______[state of confirming financial institution].

6. If this confirmation expires during an interruption of business of this financial institution as described in Article 19 of the UCP, we specifically agree to effect payment if this credit is drawn against within 30 calendar days after the resumption of our business.

Sincerely,

____________________[Confirming financial institution]

(g) The following format shall be used by the Contracting Officer for a sight draft to draw on the Letter of Credit:

SIGHT DRAFT

____________________[City, State]_____________ , 19___ [Name and address of financial institution] Pay to the order of ____________________[Beneficiary Agency] ______the sum of United States $__________< _____ This draft is drawn under_____________ Irrevocable Letter of Credit No.________________________________ [Beneficiary Agency] By:________________

(End of clause)

48 CFR Part 31 [FAC 90 39; FAR Case 94 606; Item XVIII]

Federal Acquisition Regulation;

Part 31 Agency Supplements

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) to remove the requirement for Civilian Agency Acquisition Council approval for agency supplements to FAR Part 31. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 1996.

SUPPLEMENTARY INFORMATION:

A. Background The Department of Transportation recommended that FAR 31.101 be amended to remove the requirement for Civilian Agency Acquisition Council approval for agency supplements to FAR Part 31. The change does not amend the requirement for approval of class deviations. Accordingly, supplementary coverage will be consistent with the FAR Part 31 coverage, unless a class deviation is approved. Therefore, advance approval of supplements is considered to be unnecessary.

C. Paperwork Reduction Act The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 31 Government procurement.

Dated: June 4, 1996. Edward C. Loeb, Director, Federal Acquisition Policy Division.

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

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

PART 31 CONTRACT COST PRINCIPLES AND PROCEDURES Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c). 2. Section 31.101 is amended by removing the third and fourth sentences and replacing them with the following text to read as follows:

31.101 Objectives.

* * *

To achieve this uniformity, individual deviations concerning cost principles require advance approval of the agency head or designee. Class deviations for the civilian agencies require advance approval of the Civilian Agency Acquisition Council. Class deviations for the National Aeronautics and Space Administration require advance approval of the Associate Administrator for Procurement. Class deviations for the Department of Defense require advance approval of the Director of Defense Procurement, Office of the Under Secretary of Defense for Acquisition and Technology.

48 CFR Part 31 [FAC 90 39; FAR Case 93 020; Item XIX]

Federal Acquisition Regulation; Records Retention

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) to explicitly state that contractors must maintain adequate cost records in order to be reimbursed for all claimed costs. This regulatory action was subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. It is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 1996.

FOR FURTHER INFORMATION CONTACT:

Mr. Jeremy F. Olson at (202) 501 3221 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 39, FAR case 93 020.

SUPPLEMENTARY INFORMATION:

A. Background The guidance for determining cost allowability at FAR 31.201 2 previously did not explicitly state that contractors must maintain adequate cost records in order to be reimbursed for all claimed costs nor did it specifically state that the contracting officer has the authority to disallow costs which are determined to be inadequately supported. This requirement and authority have, heretofore, been considered to be implicit in the cost principles. However, the Councils are revising the FAR to explicitly address these issues because the Office of Federal Procurement Policy SWAT Team on Civilian Agency Contracting in its report of December 3, 1992, Improving Contracting Practices and Management Controls on Cost-Type Federal Contracts, found that agencies were having difficulty because the FAR was silent on these issues. A new paragraph (d) is added to FAR 31.201 2 to explicitly state that costs claimed for reimbursement must be adequately supported and that the contracting officer may disallow costs which are inadequately supported. A proposed rule was published in the Federal Register at 59 FR 47776 on September 16, 1994. After evaluation of public comments, the Councils agreed to convert the proposed rule to a final rule without further change.

C. Paperwork Reduction Act The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 31 Government procurement.

Dated: June 4, 1996. Edward C. Loeb, Director, Federal Acquisition Policy Division.

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

PART 31 CONTRACT COST PRINCIPLES AND PROCEDURES

1. The authority citation for 48 CFR Part 31 continues to read as follows: Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).

2. Section 31.201 2 is amended by adding paragraph (d) to read as follows:

31.201 2 Determining allowability.

* * * * * (d) A contractor is responsible for accounting for costs appropriately and for maintaining records, including supporting documentation, adequate to demonstrate that costs claimed have been incurred, are allocable to the contract, and comply with applicable cost principles in this subpart and agency supplements. The contracting officer may disallow all or part of a claimed cost which is inadequately supported.

48 CFR Part 31 [FAC 90 39; FAR Case 93 006; Item XX]

Federal Acquisition Regulation; Legislative Lobbying Costs

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) cost principles concerning lobbying costs. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 1996.

SUPPLEMENTARY INFORMATION:

A. Background This FAR case was opened to address issues raised by the Office of Management and Budget SWAT team concerning the requirement to maintain records which are in addition to normal records maintained to record lobbying costs under FAR 31.205 22(f). The FAR rule deletes 31.205 22(f) because it conflicts with the recordkeeping requirements in 31.201 6(c), 31.205 22(e), and Cost Accounting Standards (CAS) 405, Accounting for Unallowable Costs (48 CFR 9904.405 50(a)). In addition, the Councils believe that 31.205 22(f) is inconsistent with the clause at 52.203 12, Limitation on Payments to Influence Certain Federal Transactions, which requires contractors to disclose lobbying activities. The reporting of such activities must necessarily be based upon certain contractor records which support the disclosures.

The rule also removes the prohibition against reimbursing executive lobbying costs at 31.205 50 and adds it to the list of specifically unallowable lobbying costs at 31.205 22(a). A proposed rule was published in the Federal Register at 59 FR 47776 on September 16, 1994. After evaluation of public comments, the Councils agreed to convert the proposed rule to a final rule without further change.

B. Regulatory Flexibility Act The Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration certify that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the revisions clarify a condition of allowability for contractors who wish to be reimbursed under Government contracts. The revisions eliminate a subsection which may be misinterpreted in its application and more accurately describe the subject matter of the cost principle. Further, most contracts awarded to small entities are awarded on a competitive, fixed-price basis and the cost principles do not apply. No comments were received on the impact of this rule on small entities during the public comment period.

C. Paperwork Reduction Act The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 31 Government procurement. Dated:

June 4, 1996. Edward C. Loeb, Director, Federal Acquisition Policy Division.

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

PART 31 CONTRACT COST PRINCIPLES AND PROCEDURES

1. The authority citation for 48 CFR Part 31 continues to read as follows: Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).

2. Section 31.205 22 is amended by revising the section heading; at the end of paragraph (a)(4) by removing the word or ; at the end of paragraph (a)(5) by removing the period and inserting ;or ; by adding paragraph (a)(6); and by removing paragraph (f) and redesignating paragraph (g) as (f) to read as follows:

31.205 22 Lobbying and political activity costs.

(a) * * *

(6) Costs incurred in attempting to improperly influence (see 3.401), either directly or indirectly, an employee or officer of the Executive branch of the Federal Government to give consideration to or act regarding a regulatory or contract matter.

* * * * *

31.205 50 [Reserved]

3. Section 31.205 50 is removed and reserved.

48 CFR Part 31 [FAC 90 39; FAR Case 93 022; Item XXI]

Federal Acquisition Regulation; Travel Costs

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 (CAAC) and the Defense Acquisition Regulations Council (DARC) have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) to specify the documentation required to support the allowability of contractors claimed travel costs. This regulatory action was subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. It is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 1996.

FOR FURTHER INFORMATION CONTACT: Mr. Jeremy F. Olson at (202) 501 3221 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 39, FAR case 93 022.

SUPPLEMENTARY INFORMATION:

A. Background A proposed rule was published in the Federal Register at 59 FR 47777, September 16, 1994, because the CAAC and the DARC determined that the FAR did not adequately specify what documentation is required to support travel costs incurred under Government contracts. The rule reflects a recommendation made by the Office of Federal Procurement Policy SWAT Team on Civilian Agency Contracting in its report of December 3, 1992, entitled Improving Contracting Practices and Management Controls on Cost-Type Federal Contracts, which found that agencies were having difficulty because the travel cost principle is silent on the documentation requirements.

The rule amends FAR 31.205 46 by adding paragraph (a)(7) which sets forth specific documentation criteria for travel costs. The major difference between the final rule and the proposed rule is that the final rule strikes the reference to time and adds a parenthetical after place in (a)(7)(i) to make the rule consistent with similar requirements already imposed by section 274 of the Internal Revenue Code for claiming costs for Federal tax purposes (26 U.S.C. 274(d)). The final rule also coincides with guidance currently contained in the Defense Contract Audit Manual (CAM) at CAM 7 1002.2.

C. Paperwork Reduction Act The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 31 Government procurement. Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division.

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

PART 31 CONTRACT COST PRINCIPLES AND PROCEDURES

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

40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).

2. Section 31.205 46 is amended

(a) By adding a heading to paragraph (a) and by revising paragraph (a)(1);

(b) By revising the first sentence of paragraph (a)(3)(iv); and

(c) By adding paragraph (a)(7) immediately preceding paragraph (b) to read as follows:

31.205 46 Travel costs

. (a) Costs for transportation, lodging, meals, and incidental expenses.

(1) Costs incurred by contractor personnel on official company business are allowable, subject to the limitations contained in this subsection. Costs for transportation may be based on mileage rates, actual costs incurred, or on a combination thereof, provided the method used results in a reasonable charge. Costs for lodging, meals, and incidental expenses may be based on per diem, actual expenses, or a combination thereof, provided the method used results in a reasonable charge.

* * * * *

(3) * * *

(iv) Documentation to support actual costs incurred shall be in accordance with the contractor s established practices, subject to paragraph (a)(7) of this subsection, and provided that a receipt is required for each expenditure in excess of $25.00.

* * * * * * * *

(7) Costs shall be allowable only if the following information is documented:

(i) Date and place (city, town, or other similar designation) of the expenses;

(ii) Purpose of the trip; and

(iii) Name of person on trip and that person s title or relationship to the contractor.

48 CFR Parts 32 and 52 [FAC 90 39; FAR Case 92 046; Item XXII]

Federal Acquisition Regulation; Prompt Payment Overseas

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

ACTION: Interim rule adopted as final.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed to convert the interim rule published in the Federal Register at 59 FR 11379, March 10, 1994, and amended by FAR case 94 770 (60 FR 34741, July 3, 1995), to a final rule. This rule amends the Federal Acquisition Regulation (FAR) to reflect that the Prompt Payment Act applies to overseas contracts. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: June 20, 1996.

FOR FURTHER INFORMATION CONTACT:

Mr. Jeremy F. Olson at (202) 501 3221 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 39, FAR case 92 046.

SUPPLEMENTARY INFORMATION:

A. Background On January 13, 1992, the Armed Services Board of Contract Appeals (ASBCA), in Held & Francke Baukittengesellschaft (ASBCA Nos. 42463 and 42464), held that FAR 32.901 improperly excluded applicability of the Prompt Payment Act (31 U.S.C. 3901, et seq.) to contracts awarded to foreign contractors for work performed outside the United States. As a result of the ASBCA decision, an interim rule was issued which, in effect, makes the Government liable for payment of interest and interest penalties under the Act for contracts with foreign contractors for work performed or supplies delivered overseas.

Section 32.901 and the clauses at 52.232 25, 52.232 26, and 52.232 27 were amended by the interim rule to remove the statements that no interest penalty will be paid on contracts awarded to foreign vendors outside the United States for work performed outside the United States and to remove the definition of foreign vendor from the clauses. That interim rule, as amended on July 3, 1995, is now converted to a final rule without further change.

B. Regulatory Flexibility Act

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 32 and 52 Government procurement.

Interim Rule Adopted as Final Without Change Accordingly, the interim rule amending CFR Parts 32 and 52, which was published at 59 FR 11379, March 10, 1994 (FAC 90 20, Item XIII), and further amended by FAR case 94 770 (60 FR 34741, July 3, 1995), is adopted as a final rule without further change.

The authority citation for 48 CFR Parts 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).

Dated: June 4, 1996. Edward C. Loeb, Director, Federal Acquisition Policy Division. 48 CFR Parts 33, 42, and 52 [FAC 90 39; FAR Cases 91 062 and 92 301; Item XXIII]

Federal Acquisition Regulation; Alternate Dispute Resolution and Federal Courts Administration Act

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

ACTION: Interim rules adopted as final.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed to adopt two interim rules as final: FAR Case 91 62, Alternative Dispute Resolution, published in the Federal Register (FR) at 56 FR 67416, December 30, 1991, and 92 301, Federal Courts Administration Act, published at 59 FR 11380 on March 10, 1994. The rules amend the claim certification procedures and the Alternative Means of Dispute Resolution (ADR) procedures, and implement section 907(a) of the Federal Courts Administration Act of 1992. These regulatory actions were not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and are not major rules under 5 U.S.C. 804.

EFFECTIVE DATE: June 20, 1996.

FOR FURTHER INFORMATION CONTACT:

Mr. Jack O Neill at (202) 501 3856 in reference to this FAR case. For general information, contact the FAR Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501 4755. Please cite FAC 90 39, FAR cases 91 062 and 92 301.

SUPPLEMENTARY INFORMATION:

A. Background Upon passage of the Federal Courts Administration Act (Act) of 1992, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council issued two interim rules implementing the changes made by the Act as well as changes to the Alternative Disputes Resolution procedures and claim certification procedures. Only three parties submitted comments in response to the interim rules. No issue was raised by the public comments that necessitated changes to the interim rules. The interim rules are, therefore, being converted to final rules without change.

B. Regulatory Flexibility Act The Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration certify that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule simplifies policies and procedures for the certification of claims submitted by contractors and is intended to reduce the need for costly litigation which arose under previous regulations. No comments were received on the impact of this rule on small entities during the public comment period.

C. Paperwork Reduction Act The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 33, 42, and 52 Government procurement. Interim Rules Adopted as Final Accordingly, the interim rule amending 48 CFR parts 33and 52, which was published at 56 FR 67416, December 30, 1991, is adopted as final, as amended by the interim rule amending 48 CFR parts 33, 42 and 52, published at 59 FR 11380, March 10, 1994, which is hereby adopted as final without change.

The authority citation for 48 CFR parts 33, 42, 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).

Dated: June 4, 1996. Edward C. Loeb, Director, Federal Acquisition Policy Division.

48 CFR Parts 34 and 52 [FAC 90 39; FAR Case 93 304; Item XXIV]

Federal Acquisition Regulation; Defense Production Act Amendments

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

ACTION: Interim rule adopted as final.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed to convert the interim rule published in the Federal Register at 59 FR 67047, December 28, 1994, to a final rule. This rule amends the Federal Acquisition Regulation (FAR) to add policy and procedures for testing and qualification, and use of industrial resources manufactured or developed with assistance provided under Title III of the Defense Production Act (DPA) of 1950. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: June 20, 1996.

SUPPLEMENTARY INFORMATION:

A. Background

Title III of the DPA authorizes various forms of Government assistance to encourage expansion of production of capacity and supply of industrial resources essential to national defense. The DPA Amendments of 1992 (Public Law 102 558) provide for the testing, qualification, and use of industrial resources manufactured or developed with assistance provided under Title III of the DPA. This rule expresses Government policy to pay for such testing, and provides definitions, procedures, and a contract clause to implement the policy. An interim rule was published in the Federal Register on December 28, 1994 (59 FR 67047), with a request for public comments. No comments were received.

B. Regulatory Flexibility Act

The addition of FAR Subpart 34.1 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 small entities are sometimes asked to perform the qualification testing required under the rule. A Final Regulatory Flexibility Analysis has been prepared and is summarized as follows:

The change is required to implement amendments to the DPA made by Public Law 102 558. The DPA amendments provide for testing, qualification, and use of industrial resources manufactured or developed with assistance provided under Title III of the DPA. This rule expresses Government policy to pay for such testing, and provides definitions, procedures, and a contract clause to implement the policy. This rule will apply to any small entity that has Government contracts that require qualification testing under the Act. A reporting requirement is in the rule that requires contractors who perform this testing to provide the test results to the Government. No public comments were received in response to the statement in the interim rule regarding the Regulatory Flexibility Act. There are no alternatives that will accomplish the objectives of the rule.

C. Paperwork Reduction Act

The Paperwork Reduction Act is deemed to apply because the final rule contains information collection requirements. Accordingly, a request for approval of a new information collection requirement concerning the DPA Amendments was submitted to the Office of Management and Budget under 44 U.S.C. 3501, et seq., and approved under OMB Control No. 9000 0133 effective through September 30, 1997. Public comments concerning this request were invited through a Federal Register notice at 59 FR 67047, December 28, 1994, and no comments were received.

List of Subjects in 48 CFR Parts 34 and 52

Government procurement.

Interim Rule Adopted as Final Without Change Accordingly, the interim rule amending CFR Parts 34 and 52, which was published at 59 FR 67047, December 28, 1994 (FAC 90 23, Item XXIV), is adopted as a final rule without change.

The authority citation for 48 CFR Parts 34 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).

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division.

48 CFR Part 37 [FAC 90 39; FAR Case 91 106; Item XXV]

Federal Acquisition Regulation; Child Care Services

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

ACTION: Interim rule adopted as final.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed to convert the interim rule published in the Federal Register at 59 FR 67050, December 28, 1994, to a final rule. The rule amends the Federal Acquisition Regulation (FAR) to add a definition of child care services and to require contracting officers to ensure that contracts for child care services include requirements for criminal history background checks of employees in accordance with 42 U.S.C. 13041. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: June 20, 1996.

SUPPLEMENTARY INFORMATION:

A. Background

This rule implements Subtitle E, section 231 of the Crime Control Act of 1990 (Pub. L. 101 647), codified at 42 U.S.C. 13041, as amended by section 1094 of the Fiscal Year 1992 Defense Authorization Act (Public Law 102 190). The effective date for compliance with Public Law 101 647 was May 29, 1991. Public Law 102 190 was effective upon enactment on December 5, 1991. In part, section 231 of Public Law 101 647 requires that child care employees, hired to provide child care services at a facility operated by the Government or under contract with the Government, undergo a criminal history background check. The statute broadly defines child care services as child protective services (including the investigation of child abuse and neglect reports), social services, health and mental health care, child day care, education (whether or not directly involved in teaching), foster care, residential care, recreational or rehabilitative programs, and detention, correctional, or treatment services. Subsequently, section 1094 of Public Law 102 190 amended 42 U.S.C. 13041 to provide for the provisional supervised employment of child care employees prior to the completion of the required criminal history background check and specified additional safety measures for Federal child care service facilities.

B. Regulatory Flexibility Act

Under the interim rule, because Subtitle E, Section 231 of the Crime Control Act of 1990, Public Law 101 647 (42 U.S.C. 13041), requires child care employees hired under contract to undergo a criminal history background check, an Initial Regulatory Flexibility Act Analysis was prepared. No comments were received.

The Regulatory Flexibility Act, 5 U.S.C. 601, et seq., applies to this final rule and 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 does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 37 Government procurement.

Interim Rule Adopted as Final Without Change

Accordingly, the interim rule amending 48 CFR Part 37, which was published at 59 FR 67050, December 28, 1994 (FAC 90 23, Item XXVII) is adopted as a final rule without change.

The authority citation for 48 CFR Part 37 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).

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division.

48 CFR Parts 42 and 52 [FAC 90 39; FAR Case 95 009; Item XXVI]

Federal Acquisition Regulation; Quick-Closeout Procedures

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) to ensure maximum use of the quick-closeout procedures. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 1996.

SUPPLEMENTARY INFORMATION:

A. Background

This final rule amends FAR 42.708, Quick-closeout procedure, the clause at FAR 52.216 7, Allowable Cost and Payment, and the clause at FAR 52.216 13, Allowable Cost and Payment Facilities, to ease the restrictions and maximize the use of the quick-closeout procedure. This rule was based on the recommendations of the Interagency Process Action Team (PAT) sponsored by the Air Force Materiel Command. The PAT s rationale was that, by raising the dollar limitation of quick-closeout procedures to those contracts with total unsettled indirect costs not exceeding $1 million in lieu of $500,000, the number of contracts which could be closed using quick-closeout procedures would increase. Use of this procedure would benefit contractors by allowing them to invoice earlier and avoid the administrative costs which would otherwise be incurred for tracking these contracts until final indirect cost rates are negotiated. In addition, the use of quick-closeout procedures is voluntary on the part of the contractor to ensure that the contractor does not suffer any loss. The final rule (1) revises FAR 42.708(a) by substituting the word shall for may ; (2) raises the limitation in FAR 42.708(a)(2)(i) for total unsettled indirect costs allocable to any one contract from $500,000 to $1 million; and (3) revises FAR 42.708(a)(2)(ii) to permit the contracting officer to waive the 15 percent restriction based upon a risk assessment that considers contractor s accounting, estimating, and purchasing systems; other concerns of the cognizant contract auditors; and any other pertinent information. Paragraph (f) of the clause at FAR 52.216 7 and paragraph (e) of the clause at 52.216 13 have also been revised to be consistent with the revisions to 42.708 as outlined above.

A proposed rule was published in the Federal Register on July 25, 1995 (60 FR 38196). Five comments from two sources were received in response to the proposed rule. All comments were considered in the development of the final rule.

B. Regulatory Flexibility Act

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 42 and 52 Government procurement.

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 42 and 52 are amended as set forth below:

1. The authority citation for 48 CFR Parts 42 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 42 CONTRACT ADMINISTRATION

2. Section 42.708 is amended in the introductory text of paragraph (a) by removing may and inserting shall ; and by revising paragraph (a)(2) (i) and (ii) to read as follows:

42.708 Quick-closeout procedure.

(a) * * *

(2) * * *

(i) The total unsettled indirect cost to be allocated to any one contract does not exceed $1,000,000; and

(ii) Unless otherwise provided in agency procedures, the cumulative unsettled indirect costs to be allocated to one or more contracts in a single fiscal year do not exceed 15 percent of the estimated, total unsettled indirect costs allocable to cost-type contracts for that fiscal year. The contracting officer may waive the 15 percent restriction based upon a risk assessment that considers the contractor s accounting, estimating, and purchasing systems; other concerns of the cognizant contract auditors; and any other pertinent information; and

* * * * *

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

3. Section 52.216 7 is amended by revising the date of the clause and paragraph (f) to read as follows:

52.216 7 Allowable Cost and Payment.

* * * * *

ALLOWABLE COST AND PAYMENT (AUG 1996)

* * * * *

(f) Quick-closeout procedures. Quick-closeout procedures are applicable when the conditions in FAR 42.708(a) are satisfied.

* * * * *

4. Section 52.216 13 is amended by revising the introductory paragraph, the date in the clause heading, and paragraph (e) to read as follows:

52.216 13 Allowable Cost and Payment Facilities.

As prescribed in 16.307(g), insert the following clause:ALLOWABLE COST AND PAYMENT FACILITIES (AUG 1996)

* * * * *

(e) Quick-closeout procedures. Quick-closeout procedures are applicable when the conditions in FAR 42.708(a) are satisfied.

* * * * *

48 CFR Part 46 [FAC 90 39; FAR Case 92 031; Item XXVII]

Federal Acquisition Regulation; Quality Assurance Actions Electronic Screening

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) to include definitions of the terms latent defect and patent defect. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 1996.

SUPPLEMENTARY INFORMATION:

A. Background

On June 8, 1992, the Department of Defense Inspector General issued Audit Report 92 099, Quality Assurance Actions Resulting from Electronic Component Screening, which included a recommendation that the Defense FAR Supplement be revised to include definitions of the terms latent defect and patent defect. Since both terms are used in the FAR, Part 46 of the FAR is being revised to include uniform definitions for use by all acquiring agencies. A proposed rule was published in the Federal Register at 59 FR 46386 on September 8, 1994. After evaluation of public comments, the Councils agreed to convert the proposed rule to a final rule without change.

B. Regulatory Flexibility Act

The Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration certify that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the revision merely provides uniform definitions for existing FAR terms. No comments were received on the impact of this rule on small entities during the public comment period.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 46 Government procurement.

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division. Therefore, 48 CFR Part 46 is amended as set forth below:

PART 46 QUALITY ASSURANCE

1. The authority citation for 48 CFR Part 46 continues to read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).

2. Section 46.101 is amended by adding in alphabetical order the definitions Latent defect and Patent defect to read as follows:

46.101 Definitions.

* * * * *

Latent defect means a defect which exists at the time of acceptance but cannot be discovered by a reasonable inspection.

* * * * * Patent defect means any defect which exists at the time of acceptance and is not a latent defect.

* * * * *

48 CFR Part 46 [FAC 90 39; FAR Case 92 027; Item XXVIII]

Federal Acquisition Regulation;

Quality Assurance Nonconformances

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) to provide standardized definitions of the terms critical nonconformance, major nonconformance, and minor nonconformance, and make other conforming amendments as a result of recommendations made by the Department of Defense Inspector General. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 1996.

FOR FURTHER INFORMATION CONTACT:

Ms. Linda Klein at (202) 501 3775 in reference to this FAR case. For general information, contact the FAR Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501 4755.

Please cite FAC 90 39, FAR case 92 027.

SUPPLEMENTARY INFORMATION:

A. Background

On September 27, 1990, the Department of Defense Inspector General (DoDIG) issued Audit Report 90 113, Nonconforming Products Procured by the Defense Industrial Supply Center. The report included recommendations that the DoD should use standardized terminology for a nonconformance, and that the DoD definition of a nonconformance should be in agreement with the FAR. On March 28, 1994 (59 FR 14466), the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council published a proposed rule implementing the DoDIG s recommendation. As a result of evaluating the comments received, changes were made to the proposed rule. The changes included deleting the words judgment and experience indicate from the definition of critical nonconformance; and adding the words of the supplies or services, to the definition of major nonconformance after the word failure.

B. Regulatory Flexibility Act

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 46 Government procurement.

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Part 46 is amended as set forth below:

PART 46 QUALITY ASSURANCE

1. The authority citation for 48 CFR Part 46 continues to read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c). 2.

Section 46.101 is amended by adding in alphabetical order the definitions Critical nonconformance , Major nonconformance , and Minor nonconformance to read as follows:

46.101 Definitions.

* * * * *

Critical nonconformance means a nonconformance that is likely to result in hazardous or unsafe conditions for individuals using, maintaining, or depending upon the supplies or services; or is likely to prevent performance of a vital agency mission.

* * * * *

Major nonconformance means a nonconformance, other than critical, that is likely to result in failure of the supplies or services, or to materially reduce the usability of the supplies or services for their intended purpose.

Minor nonconformance means a nonconformance that is not likely to materially reduce the usability of the supplies or services for their intended purpose, or is a departure from established standards having little bearing on the effective use or operation of the supplies or services.

* * * * *

3. Section 46.103 is amended at the end of paragraph (c) by removing and ; in paragraph (d) by removing the period and inserting ; and ; and by adding paragraph (e) to read as follows:

46.103 Contracting office responsibilities

. * * * * *

(e) Ensuring that nonconformances are identified, and establishing the significance of a nonconformance when considering the acceptability of supplies or services which do not meet contract requirements.

4. Section 46.407 is amended by revising the first sentence of paragraph (c)(1) introductory text, and in the third sentence by removing the comma after the word determination ; revising paragraph (d); and revising the first sentence of paragraph (f) to read as follows:

46.407 Nonconforming supplies or services.

* * * * *

(c)(1) In situations not covered by paragraph (b) of this section, the contracting officer shall ordinarily reject supplies or services when the nonconformance is critical or major.

* * * * * * * *

(d) If the nonconformance is minor, the cognizant contract administration office may make the determination to accept or reject, except where this authority is withheld by the contracting office of the contracting activity. To assist in making this determination, the contract administration office may establish a joint contractor-contract administrative office review group. Acceptance of supplies and services with critical or major nonconformances is outside the scope of the review group.

* * * * *

(f) Each contract under which supplies or services with critical or major nonconformances are accepted as authorized in paragraph (c) of this section shall be modified to provide for an equitable price reduction or other consideration.

* * * * * * * *

48 CFR Part 52 [FAC 90 39; FAR Case 95 603; Item XXIX]

Federal Acquisition Regulation; Solicitation Provisions Contract Clauses

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend a Federal Acquisition Regulation (FAR) provision to delete the statement advising offerors to obtain copies of specifications from General Services Administration Business Service Centers. The substance of the provision is not changed. Specifications are no longer available at the Business Service Centers. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 1996.

FOR FURTHER INFORMATION CONTACT: Mr. Jack O Neill at (202) 501 3856 in reference to this FAR case. For general information, contact the FAR Secretariat, Room 4037, GS Building, Washington, DC 20405, (202) 501 4755. Please cite FAC 90 39, FAR case 95 603.

SUPPLEMENTARY INFORMATION: A. Background This final rule amends the provision at FAR 52.211 1 to delete the statement that copies of specifications may be obtained from the General Services Administration Business Service Centers in Boston, New York, Philadelphia, Atlanta, Kansas City, and Fort Worth. Copies of specifications are no longer available at the Business Service Centers. B. Regulatory Flexibility Act The final rule does not constitute a significant FAR revision within the meaning of FAR 1.501 and Public Law 98 577, and publication for public comments is not required. Therefore, the Regulatory Flexibility Act does not apply. However, comments from small entities concerning the affected FAR subpart will be considered in accordance with 5 U.S.C. 610. Such comments must be submitted separately and cite 5 U.S.C. 601, et seq. (FAC 90 39, FAR case 95 603), in correspondence. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 52 Government procurement.

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Part 52 is amended as set forth below:

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

1. The authority citation for 48 CFR Part 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).

52.211 1 [Amended]

2. Section 52.211 1 is amended in the introductory paragraph by revising 11.203(a) to read 11.204(a) ; revising the date of the provision to read (AUG 1996) ; and in the first sentence of paragraph (a) of the provision by removing , or from any of the General Services Administration Business Service Centers which are located in Boston, MA; New York, NY; Philadelphia, PA; Atlanta, GA; Kansas City, MO; and Fort Worth, TX. and replacing it with a period.

52.211 2 and 52.211 3 [Amended]

3. Section 52.211 2 is amended in the introductory paragraph by revising 11.203(b) to read 11.204(b) . 4. Section 52.211 3 is amended in the introductory paragraph by revising 11.203(c) to read 11.204(c) .

48 CFR Part 52 [FAC 90 39; FAR Case 91 031; Item XXX]

Federal Acquisition Regulation; Contract Award Sealed Bidding Construction

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) to inform offerors under construction solicitations that the Government may reject bids as nonresponsive if the prices are materially unbalanced. The proposed rule was published in the Federal Register at 56 FR 29539, June 27, 1991. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 1996.

FOR FURTHER INFORMATION CONTACT:

SUPPLEMENTARY INFORMATION:

A. Background

The FAR was previously amended to include unbalanced bidding provisions at 52.214 10, Contract Award Sealed Bidding, and 52.215 16, Contract Award, for supplies and services procured under sealed bidding and negotiation procedures. At that time, the unbalanced bidding provisions were not made applicable to construction solicitations. However, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have decided that, for consistency, construction solicitations should include a similar provision to notify offerors that their bids may be rejected as nonresponsive if the prices are materially unbalanced.

B. Regulatory Flexibility Act

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of OMB under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 52 Government procurement.

Dated: June 4, 1996. Edward C. Loeb, Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Part 52 is amended as set forth below:

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

1. The authority citation for 48 CFR Part 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). 2. Section 52.214 19 is amended by revising the date of the provision to read (AUG 1996) ; and by adding paragraph (d) to the provision to read as follows:

52.214 19 Contract Award Sealed Bidding Construction.

* * * * *

CONTRACT AWARD SEALED BIDDING CONSTRUCTION (AUG 1996)

* * * * *

(d) The Government may reject a bid as nonresponsive if the prices bid are materially unbalanced between line items or subline items. A bid is materially unbalanced when it is based on prices significantly less than cost for some work and prices which are significantly overstated in relation to cost for other work, and if there is a reasonable doubt that the bid will result in the lowest overall cost to the Government even though it may be the low evaluated bid, or if it is so unbalanced as to be tantamount to allowing an advance payment.

48 CFR Part 52 [FAC 90 39; FAR Case 93 305; Item XXXI]

Federal Acquisition Regulation; Small Business Innovation Research Rights in Data

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

ACTION: Interim rule adopted as final.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed to convert the interim rule published at 59 FR 11386, March 10, 1994, to a final rule without change. The rule amends the Federal Acquisition Regulation (FAR) to implement Section 15(f) of the revised SBIR Program Policy Directive published by the Small Business Administration in the Federal Register on January 26, 1993 (58 FR 6144). The revision to the clause, Rights in Data SBIR Program, increases the small business concern s data rights retention period from 2 to 4 years. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: June 20, 1996.

SUPPLEMENTARY INFORMATION:

A. Background

This rule implements Section 15(f) of the revised SBIR Program Policy Directive published by the SBA in the Federal Register on January 26, 1993 (58 FR 6144). Section 15(f) implements Section 103(f)(4) of Public Law 102 564, Small Business Research and Development Enhancement Act of 1992, which increases the small business concern s data rights retention period from 2 to 4 years.

B. Regulatory Flexibility Act

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq. List of Subjects in 48 CFR Part 52 Government procurement. Interim Rule Adopted as Final Without Change Accordingly, the interim rule amending 48 CFR Part 52, which was published at 59 FR 11386, March 10, 1994 (FAC 90 20, Item XIX), is adopted as a final rule without change.

The authority citation for 48 CFR Part 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).

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division.

48 CFR Part 52 [FAC 90 39; FAR Case 92 001; Item XXXII]

Federal Acquisition Regulation; Inspection Clauses Fixed Price

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to clarify certain Federal Acquisition Regulation (FAR) Inspection clauses pertaining to quality assurance by replacing the words without additional charge with the words at no increase in contract price. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 1996.

FOR FURTHER INFORMATION CONTACT:

Ms. Linda Klein at (202) 501 3775 in reference to this FAR case. For general information, contact the FAR Secretariat, Room 4035, GS Building, Washington, DC 20405 (202) 501 4755.

Please cite FAC 90 39, FAR case 92 001.

SUPPLEMENTARY INFORMATION:

A. Background

An amendment to FAR 52.246 4 published in Federal Acquisition Circular 90 09 as FAR case 90 58 (see 56 FR 67135, December 27, 1991), included the addition of the phrase without additional charge in paragraph (d). A comment was received questioning the phrase without additional charge. As a result, this final rule replaces the phrase without additional charge with the phrase at no increase in contract price in certain FAR Inspection clauses for clarity.

B. Regulatory Flexibility Act

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because these final 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 OMB under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 52 Government procurement.

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division. Therefore, 48 CFR Part 52 is amended as set forth below:

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

1. The authority citation for 48 CFR Part 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).

§ 52.246 2, 52.246 4, 52.246 7, 52.246 12, and 52.246 13 [Amended]

2. The clause dates in sections 52.246 2, 52.246 4, 52.246 7, 52.246 12, and 52.246 13 are revised to read (AUG 1996) ; and sections 52.246 2(d), 52.246 4(d), 52.246 7(c), and 52.246 12(e) are amended by removing the words without additional charge and inserting at no increase in contract price in their place; and section 52.246 13(a) is amended by removing the words promptly and without additional charge and inserting promptly, and at no increase in contract price in its place.

48 CFR Part 52 [FAC 90 39; FAR Case 91 102; Item XXXIII]

Federal Acquisition Regulation; Termination for Convenience

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

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have agreed on a final rule to amend the Federal Acquisition Regulation (FAR) to clarify language in the Termination for Convenience of the Government (Fixed-Price) clause. This regulatory action was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: August 19, 1996.

SUPPLEMENTARY INFORMATION:

A. Background

A proposed rule was published in the Federal Register at 58 FR 64826, December 9, 1993. The proposed rule amended the clause at FAR 52.249 2, Termination for Convenience of the Government (Fixed-Price), to clarify existing language. Changes were made to clarify that incremental payments may be involved in some instances, such as a partial termination action, and to clarify the two instances when the contractor forfeits its right of appeal. After evaluation of public comments, the Councils agreed to two changes in the proposal. The first change revises paragraph (e) of the clause by replacing the word amended with the word modified. The second change revises paragraph (i) by deleting the phrase following a claim and final decision.

B. Regulatory Flexibility Act

The Department of Defense, the General Services Administration, and31666 Federal Register / Vol. 61, No. 120 / Thursday, June 20, 1996 / Rules and Regulations 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 simply clarifies existing language pertaining to settlement of contract termination costs. No comments were received on the impact of this rule on small entities during the public comment period.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose recordkeeping or information collection requirements, or collections of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 52 Government procurement.

Dated: June 4, 1996.

Edward C. Loeb, Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Part 52 is amended as set forth below:

PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES

1. The authority citation for 48 CFR Part 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).

2. Section 52.249 2 is amended by revising the date in the clause heading; and revising paragraphs (e) and (i) of the clause to read as follows:

§ 52.249 2 Termination for Convenience of the Government (Fixed-Price).

* * * * *

TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (FIXED-PRICE) (AUG 1996)

* * * * *

(e) Subject to paragraph (d) of this clause, the Contractor and the Contracting Officer may agree upon the whole or any part of the amount to be paid or remaining to be paid because of the termination. The amount may include a reasonable allowance for profit on work done. However, the agreed amount, whether under this paragraph (e) or paragraph (f) of this clause, exclusive of costs shown in subparagraph (f)(3) of this clause, may not exceed the total contract price as reduced by (1) the amount of payments previously made and (2) the contract price of work not terminated.

The contract shall be modified, and the Contractor paid the agreed amount. Paragraph (f) of this clause shall not limit, restrict, or affect the amount that may be agreed upon to be paid under this paragraph.

* * * * *

(I) The Contractor shall have the right of appeal, under the Disputes clause, from any determination made by the Contracting Officer under paragraph (d), (f), or (k) of this clause, except that if the Contractor failed to submit the termination settlement proposal or request for equitable adjustment within the time provided in paragraph (d) or (k), respectively, and failed to request a time extension, there is no right of appeal.

* * * * *

(End of clause)

* * * * *

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