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FAC 2005-55 Issued with Seven Final Rules Amending the FAR


The Civilian Agency Acquisition and Defense Acquisition Regulations Councils have issued Federal Acquisition Circular 2005-55, which contains 7 final rules amending the Federal Acquisition Regulation. In order of appearance, the rules address: Item I, Preventing Abuse of Interagency Contracts (FAR Case 2008-032); Item II, Transition to the System for Award Management (SAM) (FAR Case 2011-021); Item III, Brand-Name Specifications (FAR Case 2005-037); Item IV, Time-and-Materials and Labor-Hour Contracts for Commercial Items (FAR Case 2009-043); Item V, Public Access to the Federal Awardee Performance and Integrity Information System (FAR Case 2010-016); and Item VI, Updated Financial Accounting Standards Board Accounting References (FAR Case 2010-016). Item VII makes editorial amendments. This FAC also contains a Small Entity Compliance Guide. A full listing of the regulations impacted by the rules, along with the effective date for each rule, appears in the FAC regulation table below. For the text of FAC 2005-55, see 70,002.137.

Interagency Contracts


The FAR Case 2008-032 rule finalizes, with changes, an interim rule issued with FAC 2005-47 that amended the FAR to implement provisions of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (PL 110-417) to add requirements for preventing abuse of interagency contracts. The rule substantially broadened the scope of FAR Subpart 17.5 to address all interagency acquisitions, with limited exceptions, rather than just those conducted under the Economy Act (31 USC 1535). Also, the rule required agencies to support the decision to use an interagency acquisition with a determination that the action is the "best procurement approach" ( FAR 17.502-1). Assisted acquisitions must be accompanied by written agreements between the requesting agency and the servicing agency documenting the roles and responsibilities of the respective parties, including the planning, execution, and administration of the contract ( FAR 17.502-1 (a)(1)). Under FAR 17.504, senior procurement executives for each executive agency must submit an annual report on interagency acquisitions to the Director of the Office of Management and Budget, in accordance with Section 865(c) of PL 110-417. Further, the rule clarified the meaning of "interagency acquisition," "direct acquisition," and "assisted acquisitions," and moved the terms from FAR 4.601 and FAR Subpart 17.5 to FAR 2.101. In response to public comments, the final rule changes the interim rule to clarify that FAR Subpart 17.5 applies to interagency acquisitions when an agency needing supplies or services obtains them using another agency's contract, or when an agency uses another agency to provide acquisition assistance, such as awarding and administering a contract, a task order, or delivery order. Also, the final rule revises FAR 35.017 to allow --when a nonsponsoring agency requests under the authority of the Economy Act the use of a Federally Funded Research and Development Center --the nonsponsoring agency to incorporate the determination required by FAR 17.502-1 (a) into the determination and finding justification required by FAR 17.502-2 (c). In addition, the final rule expands the requirement for business-case analysis when creating multi-agency contracts to include governmentwide acquisition contracts. Therefore, the procedures for establishing MACs and GWACs have been relocated from FAR 17.502-2 (d) to FAR 17.502-1 (c) and hyperlinked to the Office of Federal Procurement Policy (OFPP) Business Case guidance.

SAM Transition


The final rule in FAR Case 2011-021 amends the FAR to update certain definitions and clauses regarding three procurement systems: the Central Contractor Registration database, the Excluded Parties List System, and the Online Representations and Certifications Application. These three Integrated Acquisition Environment systems and the Disaster Response Registry will now be accessible through a single website, https://www.acqusition.gov. This rule provides the first step in updating the FAR to implement the IAE imitative, which is designed to aggregate disparate federal acquisition content on one website that will provide regulations, systems, resources, opportunities, and training. Amendments made to the FAR by this rule include: deletion of the definition at FAR 2.101 for "business partner network," which is no longer necessary in the System for Award Management architecture; deletion of the reference to "business partner network" at FAR 4.1100, Scope, which is also no longer necessary in the SAM architecture; and revision of the relevant database references throughout the FAR, to identify the new https://www.acquisition.gov website address.

Brand-Name Specifications


The rule in FAR Case 2005-037 finalizes the FAC 2005-13 interim rule that amended the FAR to implement the memoranda issued by the Office of Management and Budget dated April 11, 2005, and April 17, 2006, requiring agencies to publish the documentation to support the use of a brand name specification on the governmentwide point of entry, as required by the FAR. The rule was intended to limit the use of brand name specifications and provide for maximum competition. Accordingly, contract specifications should emphasize the necessary physical, functional, and performance characteristics of a product and not a brand name. The interim rule amended FAR 5.102, FAR 6.302-1, FAR 8.402, FAR 8.405-1, FAR 8.405-6, FAR 8.406-1, FAR 11.105, FAR 13.105, FAR 13.106-1, FAR 13.106-3, and FAR 13.501. Subsequent to the interim rule, OMB issued two additional memoranda addressing the use of brand-name specifications. One, entitled "Appropriate Use of Brand Name or Equal Purchase Descriptions," dated November 28, 2007, reminded agencies of the need to comply with the requirements included in the interim rule and to establish internal controls to monitor compliance. The other memorandum, published December 19, 2007, entitled "Reminder-Ensuring Competition When Acquiring Information Technology and Using Common Security Configurations," summarized the FAR requirements on the use of brand-name purchase descriptions and again asked agencies to establish internal controls. All four of the OMB memoranda were considered in developing this final rule. In addition to finalizing portions of the interim rule, the final rule amends FAR 5.202, FAR 6.302-1, FAR 8.405-1, FAR 8.405-6, FAR 11.105, FAR 13.106-1, FAR 13.501, FAR 16.505, FAR 18.105, and FAR 36.600 to clarify that documentation or justification and posting requirements for brand-name items only apply to the portion of the acquisition that requires the brand-name item. Specifically, FAR Subparts 8.4 and 16.5 are amended to require screening of the brand-name justifications for contractor proprietary data, and FAR Subpart 16.5 is amended to require contracting officers to post the justification for an order peculiar to one manufacturer under indefinite-delivery contracts.

Commercial T&M and L-H Contracts


FAR Case 2009-043's final rule amends the FAR to implement Government Accountability Office recommendations to ensure that time-and-materials and labor-hour contracts are used to acquire commercial services only when no other contract type is suitable, and to instill discipline in the determination of contract type with a view toward managing the government's risk. Accordingly, this rule amends FAR 8.404 to add requirements on type-of-order preference for services. FAR 8.405-2 is amended to add language referencing the requirements at FAR 8.404 (h) on the use of T&M and L-H orders for services. The rule amends FAR 8.405-3 to require the ordering activity to specify the order type and to develop a statement of work for each order covered by a blank purchase agreement. The rule also revises FAR 16.201 and adds FAR 16.600 to reinforce the requirements to use T&M and L-H contracts when there is no other suitable contract type. The text of the proposed rule appears at 70,006.245.

FAPIIS Access


The FAR Case 2010-016 interim rule issued with FAC 2005-49 has been finalized with changes. The rule amended the FAR to implement Section 3010 of the Supplemental Appropriations Act, 2010 (PL 111-212), which requires the Administrator of General Services to post all information contained in the Federal Awardee Performance and Integrity Information System, with the exception of past performance reviews, on a publicly available website. This interim rule notified contractors of this new statutory requirement for public access to FAPIIS and created a new clause at FAR 52.209-9, Updates of Publicly Available Information Regarding Responsibility Matters, to support the posting of information in FAPIIS consistent with Section 3010. FAC 2005-40 contained a final rule (FAR Case 2008-027) that implemented the requirements for the FAPIIS. When first launched, FAPIIS was made available to appropriate acquisition officials, but Section 3010 modified this directive by requiring FAPIIS information to be publicly available. The interim rule removed the clause at FAR 52.209-8, Updates of Information Regarding Responsibility Matters, and replaced it with FAR 52.209-9. The interim rule made corresponding changes to FAR 1.106, FAR 12.301, and FAR 52.209-7. In addressing comments submitted on the interim rule, the FAR Councils recognized the risk to contractors if they did not have the opportunity to review the data before it was made available to the public. Accordingly, the final rule revises FAR 9.105 and FAR 52.209-9 to prohibit contracting officers from posting information in FAPIIS that is protected by a disclosure exemption under the Freedom of Information Act, and to allow contractors seven calendar days to review information posted to FAPIIS before that information is made available to the public. The government will send the contractor a notice whenever information is entered into the system about that contractor. If a contractor asserts to the government, within seven calendar days, that posted information is covered by a FOIA disclosure exemption, the information will be removed while the agency resolves the issue in accordance with agency FOIA procedures. FAR 9.406-3, FAR 9.407-3, and FAR 42.1503 are amended to add language requiring debarring and suspending officials, respectively, to consult the procedures at FAR 9.105-2 (b)(2)(iv) with regard to information that may be covered by a FOIA disclosure exemption. FAR 52.209-9 's prescription provision at FAR 9.104-7 has been amended to remove the language at subparagraph (c)(2) on the use of the alternate clause. The amendment to FAR 12.301 removes subparagraph (d)(4) from the list of provisions and clauses prescribed for the acquisition of commercial items. A technical change was made to FAR 52.212-5 to add FAR 52.209-9 to the list of incorporated clauses in commercial item contracts. The effective date of the rule is January 3, 2012, but the clause prescription for FAR 52.209-9 applies to solicitations issued on or after January 17, 2012, and resultant contracts (see 70,002.138).

Accounting References


The final rule in FAR Case 2010-005 amends the FAR to update references to authoritative accounting standards owing to the Financial Accounting Standards Board's Accounting Standards Codification of Generally Accepted Accounting Principles. Specifically, the rule updates the references based on FASB Statement Number 168, which stated the FASB Accounting Standards Codification would become the source of authoritative United States GAAP recognized by the FASB to be applied to nongovernmental entities. The revisions are intended to simply replace the superseded references with updated ones. The rule amends the depreciation cost principle at FAR 31.205-11, and the principle addressing rental costs at FAR 31.205-36. Corresponding changes impact the clauses at FAR 52.204-10, FAR 52.212-5, and FAR 52.213-4. For the text of the proposed rule, see 70,006.247.






















































































































































 






 

 

(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )

     
  
 

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