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FAR Councils Issue FAC 2005-27 with 14 Rules

The Civilian Agency Acquisition and Defense Acquisition Regulations Councils have published Federal Acquisition Circular 2005-27. The Circular contains two interim and twelve final rules amending the Federal Acquisition Regulation. In order of appearance, the rules address: Item I --Correcting Statutory References Related to the Higher Education Act of 1965 (FAR Case 2007-020); Item II --Changing the Name of the Office of Small and Disadvantaged Business Utilization for DoD (FAR Case 2008-001); Item III --Administrative Changes to the FPI Blanket Waiver and the JWOD Program Name (FAR Case 2007-015); Item IV --Local Community Recovery Act of 2006 (FAR Case 2006-014); Item V --Additional Requirements for Competition Advocate Annual Reports (FAR Case 2007-007); Item VI --Contract Debts (FAR Case 2005-018); Item VII --Subcontractor Requests for Bonds (FAR Case 2007-022); Item VIII --Extension of Authority for Use of Simplified Acquisition Procedures for Certain Commercial Items (FAR Case 2008-002); Item IX --Enhanced Competition for Task and Delivery Order Contracts (FAR Case 2008-006, Interim); Item X --Online Representations and Certifications Application Review (FAR Case 2006-025); Item XI --Cost Accounting Standards Administration and Associated Federal Acquisition Regulation Clauses (FAR Case 2007-002, Interim); Item XII --CAS Administration (FAR Case 2006-004); Item XIII --Accepting and Dispensing of $1 Coin (FAR Case 2006-027); and Item XIV, Technical Amendments. For a complete listing of all FAR sections impacted by this FAC, as well as the applicable effective dates, see the table below in this report. The full text of FAC 2005-27 appears at 70,002.101.
Contract Debts

A final rule, FAR Case 2005-018, amends the FAR to revise the policies and procedures pertaining to contract debts. This rule, which adopted a prior proposal (70,006.200 ), reorganizes FAR Subpart 32.6 ( FAR 32.600 through FAR 32.611) to add clarity and provide a logical sequence. FAR Subpart 32.6 prescribes policies and procedures for identifying, collecting, and deferring collection of contract debts (including interest, if applicable). The rule revises FAR 32.601 to specify what constitutes a contract debt, rather than how a contract debt may arise. In addition, this provision is amended to include payments determined to be in excess of contract limitations for commercial financing, because these payments constitute a contract debt. Newly revised FAR 32.602 defines the responsibilities of the contracting officer and the payment officials to ensure an efficient and non-duplicative process. All discussions of contract debt determinations are consolidated in FAR 32.603. The rule also consolidates all discussion on payment issues in a single provision at FAR 32.604. Revised FAR 32.605 consolidates the materials on CO final decisions. Similarly, FAR 32.606 consolidates discussions on debt collection and FAR 32.608 simplifies the discussions relating to interest. The rule also revises FAR 12.215 and FAR 32.008 to refer to the responsibilities of the CO at FAR 32.604 when notified by the contractor of an overpayment. In addition, the rule revises the clauses at FAR 52.212-4, and FAR 52.232-25 through FAR 52.232-27, to conform with other revisions. Other provisions impacted by this rule include: FAR 13.401, FAR 33.208, FAR 33.211, FAR 36.608, FAR 42.302, FAR 52.213-4, and FAR 52.232-17.
Disaster Relief

The rule associated with FAR Case 2006-014 adopts as final, with a change to the second interim rule, two interim rules amending the FAR that implemented amendments to the Robert T. Stafford Disaster Relief and Emergency Assistance Act. The Local Community Recovery Act of 2006 amended the Stafford Act to authorize set-asides for major disaster or emergency assistance acquisitions to businesses that reside or primarily do business in the geographic area affected by the disaster or emergency. The first interim rule (FAC 2005-12) implemented this statutory amendment by adding a new FAR Subpart 6.6, titled Stafford Act Preference for Local Area Contractor, consisting of FAR 6.601 through FAR 6.603. In addition, the rule added new provisions at FAR 26.202 and FAR 26.203 to describe CO procedures and solicitation clauses. New contract clauses were added at FAR 52.226-3 through FAR 52.226-5. Conforming amendments were made to FAR 6.302-5, FAR 12.301, FAR 26.200, and FAR 52.212-5. Subsequently, Section 694 of the Department of Homeland Security Appropriations Act of 2007 (PL 109-295) amended the Stafford Act to enact requirements for transitioning work under existing contracts. A second interim rule (FAC 2005-21) addressed this statutory amendment and added a new provision at FAR 6.207, amended FAR 5.207, FAR 12.301, FAR 18.203, and revised FAR Subpart 26.2, as well as the clauses at FAR 52.212-5, and FAR 52.226-3 through FAR 52.226-5. The rule also removed FAR Subpart 6.6. The current final rule makes a minor change to FAR 26.202-2, which allows COs to use an evaluation preference, when authorized by agency regulations or procedures.
Enhanced Competition

An interim rule, FAR Case 2008-006, amends the FAR to implement Section 843 of the Fiscal Year 2008 National Defense Authorization Act, entitled "Enhanced Competition for Task and Delivery Order Contracts." The purpose of this statute is to improve opportunities for competition through fair opportunity, transparency and accountability in contracting. Section 843 stipulated several requirements regarding enhancing competition within federal contracting. The provisions of Section 843 implemented by the interim rule include those pertaining to: a limitation on single award task and delivery order contracts greater than $100 million; enhanced competition for task and delivery orders in excess of $5 million; and protests on orders on the grounds the order increases the scope, period, or maximum value of the contract under which the order is issued, or the order is valued in excess of $10 million. FAR 16.503 and FAR 16.504, as amended by the interim rule, apply to single award task or delivery order contracts awarded on or after May 27, 2008, which was the date FY08 NDAA went into effect. FAR 16.505, as amended, applies to orders awarded on or after May 27, 2008, on existing contracts as well as new contracts. Comments on the rule, identified by FAR Case 2008-006, are due by November 17, 2008.
CAS Administration

The interim rule associated with FAR Case 2007-002 amends 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, this current FAR interim rule amends the following provisions: FAR 30.201-4, and the contract clauses at FAR 52.230-1 through FAR 52.230-5. Comments on the rule, identified by FAR Case 2007-002, are due by November 17, 2008. A final rule, FAR Case 2006-004, makes additional changes to CAS administration provisions. The rule, which adopts a proposed rule (70,006.199) with minor changes, amends the FAR to implement revisions to the regulations related to the administration of the CAS as they pertain to contracts with foreign concerns, including United Kingdom concerns. The minor changes to FAR 30.201-4(c) clarify that the clause at FAR 52.230-4 need not be included in contracts with foreign concerns otherwise exempt from CAS coverage, and that foreign concerns do not include foreign governments, or their agents or instrumentalities.
Advocate Reports

The FAR Case 2007-007 final rule amends the FAR to require that annual reviews by executive agency competition advocates be provided in writing to both the agency senior procurement executive and the agency chief acquisition officer. Agency competition advocates must describe initiatives that ensure task and delivery orders over $1,000,000 issued under multiple award contracts are properly planned, issued, and comply with FAR 8.405 and FAR 16.505 in a report to the senior procurement executives. The rule amends FAR 6.502.
$1 Coin

A rule, FAR Case 2006-027, finalizes with changes an interim rule issued with FAC 2005-19 , which amended the FAR to implement Section 104 of the Presidential $1 Coin Act of 2005. Section 104 required entities that operate any business on any premises owned or controlled by the United States to be capable of accepting and dispensing $1 coins on January 1, 2008. Subsequent to this statute's enactment, Pubic Law 110-147 amended 31 USC 5112(p)(1)(A) to allow an exception from the $1 coin dispensing capability requirement for vending machines that do not receive currency denominations greater than $1. The final rule implements this second statutory directive and applies to all service contracts that involve business operations conducted using U.S. coins and currency, including vending machines, on any premises owned by the U.S. or under the control of any agency or instrumentality of the U.S. The clause at FAR 52.237-11 is required for all solicitations and contracts on and after September 17, 2008, which is the effective date of the final rule. Affected contracts in existence before January 1, 2008, that do not already have the clause must be modified to include the clause, and contracts that have the August 2007 edition of the clause must be modified, if the contractor requests, to include the newer version contained in this final rule, without requiring consideration from the contractor. In addition to the contract clause at FAR 52.237-11, this rule amends FAR 37.116-1 and FAR 52.212-5.
Commercial Items

The final rule associated with FAR Case 2008-002 amends the FAR to extend the authority to use simplified acquisition procedures for certain commercial items. This final rule, which amends FAR 13.500, implements Section 822 of the National Defense Authorization Act for Fiscal Year 2008 (PL 110- 181). Section 822 amends Section 4202(e) of the Clinger-Cohen Act of 1996 by extending until January 1, 2010, the timeframe in which an agency may use simplified procedures to purchase commercial items in amounts greater than the simplified acquisition threshold, but not exceeding $5,500,000 or $11 million for acquisitions described in FAR 13.500(e).
Subcontractor Bonds

The FAR Case 2007-022 final rule amends the FAR to clarify that the clause "Prospective Subcontractor Requests for Bonds" does not apply to commercial items. This clause, FAR 52.228-12, implemented Section 806(a)(3) of Public Law 102-190, as amended, which required a contractor to provide a copy of the payment bond to a prospective subcontractor or supplier offering to furnish labor or material for the performance of a construction contract for which a payment bond has been furnished to the government pursuant to the Miller Act. This final rule exempts the acquisition of commercial items from the clause's requirement and incorporates the associated statutory citation into FAR 12.503 and FAR 12.504.

Federal Prison Industries

A final rule, FAR Case 2007-015, amends the FAR to increase the blanket waiver threshold for small dollar-value purchases from Federal Prison Industries by federal agencies, and to change the name of the JWOD Program to the "AbilityOne Program." JWOD refers to the Javis-Wagner-O'Day Act, which requires government entities to purchase certain supplies and services from workshops employing disabled people. This rule amends FAR 8.602, FAR 8.603, and FAR 8.605, to effect the name change and reflect the threshold increase from $2,500 to $3,000. No waiver is required for purchases from an alternative source below $3,000. Customers may, however, still purchase from FPI at, or below, this threshold. The name change to "AbilityOne Program" is also reflected in FAR 4.602, FAR 4.606, FAR Subpart 8.7, FAR 9.107, FAR 18.107, FAR 44.202-2, and FAR 52.208-9.
Name Change

The FAR Case 2008-001 final rule changes the name of the "Office of Small and Disadvantaged Business Utilization" to the "Office of Small Business Programs" for the Department of Defense, as required by Section 904 of the National Defense Authorization Act for Fiscal Year 2006 (PL 109-163). The office name change, as well as the change in the title of the director of the office, must be noted in the FAR. Accordingly, this rule amends the definitions at FAR 2.101, as well as FAR 19.201 and FAR 19.702, to make the necessary changes.
Minority Institutions

The final rule associated with FAR Case 2007-020 amends the FAR to correct references to sections of the Higher Education Act of 1965 at FAR 2.101, FAR 52.212-5, FAR 52.219-23, and FAR 52.226-2. These sections of the Act contain and refer to the definitions of "minority institution" and "Hispanic-serving institution." The citations for these sections changed when the Higher Education Act of 1965 was amended by the Higher Education Amendments of 1998. This final rule updates the FAR accordingly.
Contractor Registration

A rule, FAR Case 2006-025, finalizes without change an interim rule issued with FAC 2005-19, which amended the FAR to revise the prescription for use of clauses for the use of Environmental Protection Agency-designated products and toxic chemical release reporting. The interim rule revised FAR 4.1104, which mandates the use of the clause at FAR 52.204-7, "Central Contractor Registration," which in turn requires the contractor to register in CCR. FAR 4.1202 lists 26 representations and certifications that are included in the Online Representations and Certifications Application database and are therefore not to be included in solicitations that include FAR 52.204-7. Of the 26 representations and certifications, the prescriptions for use of two associated clauses, FAR 52.223-9, "Estimate of Percentage of Recovered Material Content for EPA-Designated Products," and FAR 52.223-14, "Toxic Chemical Release Reporting, "were dependent on the associated provisions at FAR 52.223-4 and FAR 52.223-13 being included in the solicitation. In instances where CCR is required, the annual certification in ORCA applies, and therefore neither provision would be included in the solicitation. Consequently, when applicable to the resultant contract, the government may fail to include the associated clause because the provision was not included in the solicitation. Failure to include the clause would preclude receipt of information or certification required by statute. The interim rule amended FAR 23.406 and FAR 23.906, both titled "Solicitation provision and contract clause," to revise the prescriptions for inserting FAR 52.223-9 and FAR 52.223-14 in contracts to provide for use under the same circumstances as the prescription for use of their associated provisions.

Item XIV of FAC 2005-27 implements a technical amendments final rule to the Federal Acquisition Regulation. The rule makes editorial changes at FAR 15.404-1 and FAR 52.212-5. Also, a Small Entity Compliance Guide, which was prepared in accordance with Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996, accompanies FAC 2005-27.

(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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