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One Interim, Five Final Rules in FAC 2005-60 Amend the FAR


The Civilian Agency Acquisition and Defense Acquisition Regulations Councils have issued Federal Acquisition Circular 2005-60, which contains an interim rule and five final rules amending the Federal Acquisition Regulation. In order of appearance, the rules are: Item I—Reporting Executive Compensation and First-Tier Subcontract Awards (FAR Case 2008-039); Item II—Payments Under Time-and-Materials and Labor-Hour Contracts (FAR Case 2011-003); Item III—Extension of Sunset Dates for Protests of Task and Delivery Orders (FAR Case 2012-007, Interim); Item IV—DARPA-New Mexico Tax Agreement (FAR Case 2012-019); and Item V—Clarification of Standards for Computer Generation of Forms (FAR Case 2011-022). Item VI makes technical 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 2005-60, see ¶70,002.150.

Award Website

In FAR Case 2008-039, the interim rule issued in FAC 2005-44 has been finalized with changes. The interim rule amended the FAR by implementing Section 2 of the Federal Funding Accountability and Transparency Act of 2006 (PL 109-282, 31 USC 6101), as amended by Section 6202 of the Government Funding Transparency Act of 2008 (PL 110-252), which requires the Office of Management and Budget to establish a free public website containing full disclosure of all federal contract award information. The rule revised FAR Subpart 4.14 and the contract clause at FAR 52.204-10 to require contractors to report executive compensation and first-tier subcontractor awards on contracts expected to be $25,000 or more. The award data was made available to the public at http://www.usaspending.gov. The reporting requirements were phased-in according to the schedule in FAR 52.204-10 (e). The interim rule made corresponding technical changes to FAR 12.503, FAR 42.1501, FAR 52.212-5, and FAR 52.213-4. In response to comments, the FAR Councils made a number of changes to the final version of rule:

  • FAR 2.101 —Clarifies that prime contractors must enter Transparency Act data when registering in the Central Contractor Registration database.

  • FAR 4.1401 —Revises the rule for consistency with the statute that exempts "classified information," not "classified contracts." The rule deletes the exception for "individuals," which is not used in the statute for contracts. Also, the paragraph regarding the phase-in schedule was deleted since all phase-in dates have passed, and this final rule was issued after that period.

  • FAR 4.1402 (b)—Clarifies the responsibility for correcting any pre-populated data in the FSRS database at http://www.fsrs.gov.

  • FAR 4.1403 —Removes the exception for inserting the clause in classified solicitations and contracts, or solicitations or contracts with individuals.

  • FAR 52.204-7 —Revises the CCR clause to conform to the change at FAR 2.101.

  • FAR 52.204-10 —Revises the definition of "first-tier subcontract" to allow contractors greater flexibility to determine their first-tier subcontractors; adds a definition of "month of award"; adds a paragraph to remind contractors that nothing in this clause requires the disclosure of classified information; moves text previously at FAR 52.204-10 (c)(2) to FAR 52.204-10 (d)(1) to ensure the prime contractor's reporting requirements of its executive compensation are discussed in the clause before the reporting requirements for the first-tier subcontract; FAR 52.204-10 (d)(1) includes a change to conform to the change made at FAR 52.204-7 ; clarifies the 80 percent and $25 million language now at FAR 52.204-10 (d)(1)(i) and (d)(3)(i) by adding wording derived from the statute; adds FAR 52.204-10 (e) to state that the contractor must not split or break down first-tier subcontract awards to a value less than $25,000 to avoid the first-tier subcontract reporting requirements; adds FAR 52.204-10 (f) to state that the contractor is required to report information on a first-tier subcontract when the subcontract is awarded; deletes reference to a phase-in schedule previously at FAR 52.204-10 (e); and adds a paragraph (h) to clarify responsibility for correcting incorrect data.

T&M/L-H Payments

The FAR Case 2011-003 final rule amends the FAR to make necessary revisions to accommodate the authorization to use time-and-materials and labor-hour contract payment requirements. The proposed rule ( ¶70,006.256) sought to harmonize the provisions for invoicing and submission of the final invoice between clauses FAR 52.216-7, Allowable Cost and Payment, and FAR 52.232-7, Payments under Time-and Materials and Labor-Hour Contracts, when a time-and-materials contract is being used. Consequently, the final rule amends the basic clause at FAR 52.232-7 to reflect the provisions for invoicing and submission of the completion voucher at FAR 52.216-7. This final rule deletes Alternate I along with its prescription at FAR 32.111 (a)(7)(i). Alternate I of FAR 52.232-7 provided for the addition of paragraph (j) in labor-hour contracts which deleted the terms of the basic clause governing the reimbursement of furnished materials. The rule deletes Alternate I, paragraph (j), as superfluous because the terms of the basic clause governing the reimbursement of furnished materials are in effect self-deleting. The rule makes corresponding changes to the prescription provision at FAR 16.307 and the clause at FAR 52.212-4.

Task/Delivery Order Protests

The interim rule associated with FAR Case 2012-007 amends FAR 16.505 to implement sections of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 (PL 111-383), and the National Defense Authorization Act for Fiscal Year 2012 (PL 112-81). These acts extended the sunset date for protests against the award of task or delivery orders from May 27, 2011, to September 30, 2016. The FAR Councils issued an interim rule with FAC 2005-53 (FAR Case 2011-015) extending the sunset date for protests of task and delivery orders valued in excess of $10 million for Title 10 agencies; namely DoD, NASA, and the Coast Guard. The rule did not extend the sunset date for Title 41 agencies. After the FAC 2005-53 interim rule was published, Section 813 of the NDAA for FY 2012 made comparable changes to Title 41 to extend the sunset date for protests against the award of task and delivery orders to September 30, 2016. To accomplish the statutory changes for both Title 10 and Title 41, FAR Case 2011-015 is not being issued as a final rule and is instead being renumbered and incorporated into this new interim rule. Comments on this interim rule are due by September 24, 2012.

New Mexico Tax Agreement

The final rule in FAR Case 2012-019 adds the United States Defense Advanced Research Projects Agency to the list of agencies at FAR 29.401-4 that have entered into separate tax agreements with the State of New Mexico. The DARPA-NM tax agreement eliminates the double taxation of government cost-reimbursement contracts when DARPA contractors and their subcontractors purchase tangible personal property to be used in performing services in whole or in part in New Mexico, and for which title to such property will pass to the U.S. following delivery of the property to the contractor and its subcontractors by the vendor.

Computer Generated Forms

The FAR Case 2011-022 final rule amends the FAR to remove references to Federal Information Processing Standard 161 and codify requirements for standards already in use. The Secretary of Commerce withdrew the FIPS requirement because it was obsolete and had not been updated to adopt current voluntary industry standards, federal specifications, federal data standards, or current good practices for information security. The withdrawal of this standard created a gap in the FAR. This final rule closes that gap by clarifying the use of American National Standards Institute X12 at FAR 53.105, Computer generation, as the valid standard to use for computer-generated forms. FAR 53.105 as amended, will continue allowing agencies and the public to generate standard and optional forms on their computers. The proposed rule appears at ¶70,006.262.




(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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