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FAC 2005-36 Contains Seven Rules

The Civilian Agency Acquisition and Defense Acquisition Regulations Councils have published Federal Acquisition Circular 2005-36, which contains one interim and six final rules amending the Federal Acquisition Regulation. In order of appearance, the rules address the following subjects: Item I, Federal Technical Data Solution (FedTeDS) (FAR Case 2008-038); Item II, Fair Labor Standards Act and Service Contract Act Price Adjustment Clauses (FAR Case 2007-021); Item III, New Designated Country --Taiwan (FAR Case 2009-014) (Interim); Item IV, Prohibition on Restricted Business Operations in Sudan and Imports from Burma (FAR Case 2008-004); Item V, List of Approved Attorneys, Abstractors, and Title Companies (FAR Case 2006-013); and Item VI, Cost Accounting Standards (CAS) Administration and Associated Federal Acquisition Regulation Clauses (FAR Case 2007-002). This FAC also makes technical editorial changes to FAR 32.503-9, FAR 52.213-4, and FAR 52.244-6, and contains a Small Entity Compliance Guide. For the text of FAC 2005-36, see 70,002.113.

The final rule in FAR Case 2008-038 amends FAR 5.102, FAR 5.207, and FAR 7.105, to reflect that Federal Technical Data Solution capabilities have been incorporated into the Governmentwide Point of Entry. The GPE is also known as the FedBizOpps system. The rule replaces references to the FedTeDS system with references to the GPE system, and addresses the availability of technical data through GPE. The FedTeDS system was used to post technical data packages and other items associated with solicitations that required some level of access control. In April 2008, the newest version of the GPE was launched, and it incorporated FedTeDS capabilities, allowing the FedTeDS system to be retired. According to the Councils, this rule will only have a slight impact on government, and does not have a significant impact on any automated systems. The rule carries a September 10, 2009, effective date.
Price Adjustment Clauses

A second final rule, FAR Case 2007-021, amends the FAR to require the incorporation of the clauses at FAR 52.222-43, Fair Labor Standards Act and Service Contract Act --Price Adjustment (Multiple Year and Option Contracts), and FAR 52.222-44, Fair Labor Standards Act and Service Contract Act --Price Adjustment, in time-and-materials and labor-hour service contracts that are subject to the Service Contract Act. The rule makes conforming changes to the clause prescription at FAR 22.1006 and the clause at FAR 52.212-5. According to the Councils, there was widespread use of the clauses in T&M and L-H contracts, even though the previous prescriptions did not require the clauses to be used. These changes are designed to achieve consistency throughout the government acquisition community, and resolve potential inequities where the clauses have not been applied. Also, the changes will allow the government to avoid other means of adjusting contract unit price labor rates that may be more costly. This rule finalizes a January 9, 2009, proposed rule (70,006.225). The effective date of the rule is September 10, 2009.

FAR Case 2009-014 involves an interim rule that implements the designation of Taiwan under the World Trade Organization Agreement on Government Procurement. Taiwan became a designated country on July 15, 2009, based on its accession to the WTO Agreement on Government Procurement. The rule adds Taiwan to the list of WTO Government Procurement Agreement countries in FAR 22.1503, FAR 25.003, FAR 52.212-5, FAR 52.213-4, FAR 52.222-19, FAR 52.225-5, FAR 52.225-11, and FAR 52.225-23. As a result of the change, contracting officers may purchase goods and services made in Taiwan without application of the Buy American Act, if the acquisition is covered by the WTO Agreement on Government Procurement. The interim rule is effective August 11, 2009. Comments citing FAC 2005-36, FAR Case 2009-014, are due October 13, 2009.
Sudan and Burma

The rule in FAR Case 2008-004 converts the interim rule in FAC 2005-36 to a final rule, with changes. The interim rule implemented Section 6 of the Sudan Accountability and Divestment Act of 2007 (PL 110-174), which requires contractors to certify, in contracts with executive agencies, that they do not conduct certain business operations in Sudan. The restrictions were added in FAR Subpart 25.7 (FAR 25.700 - FAR 25.702-4), in a new prescription at FAR 25.1103(d), and a new clause at FAR 52.225-20. The rule also made corresponding changes to FAR 4.203, FAR 4.1201, FAR 4.1202, FAR 15.102, FAR 52.212-1, FAR 52.212-3, and FAR 52.212-5. In response to comments, the final rule deletes in FAR 25.702-1, FAR 52.212-3, and FAR 52.225-20, the definition of "person," and modifies the definition of "restricted business operations," so that the FAR language tracks more closely the language of the Act. The final rule also makes a change that clarifies the use of the term "offeror" in the certification language of the two clauses. Additionally, the interim rule modified FAR 25.701, and the clause at FAR 52.225-13, to add Burma to the list of countries from which most imports are prohibited, in accordance with Executive Order 13310 (68 FR 44853), Blocking Property of the Government of Burma and Prohibiting Certain Transactions, and Executive Order 13448 (72 FR 60223), Blocking Property and Prohibiting Certain Transactions Related to Burma. No changes were made to the portion of the interim rule addressing Burma. This final rule carries an August 11, 2009, effective date.
Acceptable Evidence of Title

Another rule, FAR Case 2006-013, finalizes, with changes, a proposed rule (70,006.207) addressing the procedures for accepting a bond with a security interest in real property. FAR Subpart 28.2 provides that when an individual surety secures a bond with an interest in real estate, the surety must provide evidence of title in the form of a certificate of title prepared by a qualified title attorney or abstractor, or a title insurance policy issued by a title insurance company that has been approved by the Department of Justice. Since DOJ no longer maintains a list of approved title insurance companies, contracting officers must now take other steps to ensure the adequacy of the title evidence, or ensure the surety obtains a title insurance policy for the full amount of the government's lien interest from a qualified title insurance company. This rule revises FAR 28.203-3 to include mortgagee title insurance as acceptable evidence of title. Other evidence of title consistent with Section 2 of the DOJ Title Standards 2001, located at http://www.usdoj.gov/enrd/2001__Title__Standards.html, is also acceptable. The clause at FAR 52.228-11, Pledges of Assets, is updated with this new reference. In response to a comment, the final rule deletes the qualifier "depending on the value of the property" from language stating COs should request the assistance of agency legal counsel in determining if title evidence from individual sureties is consistent with the DOJ Standards. The rule is effective September 10, 2009.
CAS Administration

The FAR Case 2007-002 rule adopts as final, with no changes, an interim rule issued with FAC 2005-27, which amended the FAR to revise the contract clauses related to the administration of the Cost Accounting Standards to maintain consistency between the FAR and CAS. The CAS Board had previously published a final rule (70,055.18) revising the contract clauses related to CAS administration. This CAS rule amended the CAS applicability threshold to be the same as the threshold for compliance with the Truth in Negotiations Act as required by section 822 of the 2006 National Defense Authorization Act (PL 109-163). The TINA threshold is currently $650,000. The CAS rule also changed the effective dates of CASB 9903.201-3 and CASB 9903.201-4(a), (c), and (e) from April 2000 and June 2000, respectively, to June 2007. In addition, the CAS Board had published an earlier final rule (70,055.14), which specified that the interest rate for overpayments by the government under CASB 9903.201-4(a), (c), and (e) shall be computed at the annual rate established under section 6621(a)(2) of the Internal Revenue Code of 1986 (26 USC 6621(a)(2)). To maintain consistency between the FAR and CAS as they relate to CAS administration, the FAR interim rule amended the following provisions: FAR 30.201-4, and the contract clauses at FAR 52.230-1 through FAR 52.230-5. This final rule has an August 11, 2009, effective date.



(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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