SPECIAL NOTE:AS THE ORIGINAL AFAC IS NOT PROVIDED IN AN ELECTRONIC FORMAT, THE FOLLOWING IS A REPRESENTATION OF:

                   1- THE TEXT OF OSD POLICY LETTERS.
                   2- REFERENCES TO ANNOTATED OR CORRECTED TEXT WITHIN THE FAR,       DFARS, AFFARS, AND AFMCFARS.
        

AFAC 92-49 Summary:

B1      Sequence of Progress Payments and Contract Modifications.
B2      Contract Award.
B3      Test Program for Negotiation of Comprehensive Small Business Subcontracting Plans.
B4      Evaluation Preference for Small Disadvantaged Small Business Concerns.
B5      Determinations of Public Interest Under the Buy Amarican Act
B6      Supercomputers.
B7      Contract Quality Requirements.
B8      Contract Data Reporting.

C1      Consideration for Changing Contract Requirements.
C2      Current AFACs Affecting the FAR, DFARS, and AFFARS.
C3      Cancelled, Superceded or Expired AFACs.

D1       Class Deviation - Interim Payments and Contract Close-Out.
D2      Class Deviation from Federal Acquisition Regulation (FAR) Part  45.


ITEM B-1, OSD POLICY LETTER DATED 03 JUL 1995.
                        DARS CASE: 93-D016, 95-D012
                        D.L. 95-012 

SUBJECT:  Sequence of Progress Payments and Contract Modifications

   We have amended the Defense Federal Acquisition Regulation Supplement to provide additional guidance regarding identification of funding under DOD contracts.

        Contracting Officers shall ensure that contracts clearly identify
the accounting classification reference numbers which apply to each line and subline item. When a line item contains multiple accounting classification citations, the contract shall include instructions which provide for payment in a manner that reflects the performance of work in the contract.

        Contracts that  obtain both fixed-price and cost-reimbursement line or subline items shall identify the contract type for each line or subline item.  In addition, contract modifications which obligate or deobligate funds shall identify the accounting changes for each line and subline item to facilitate appropriate payment.

        This final rule is effective immediately and will be published in a future Defense Acquisition Circular.

                                                        Elenor Spector                  
                                                        Director, Defense Procurement



Revised text is as follows:
In DFARS-

{204.7101}    Definitions.
        "Accounting classification reference number (ACRN)" means a two position alpha or alpha/numeric control code used as a method of relating the accounting classification citation to detailed line item information contained in the schedule.
        
     
    "Nonseverable deliverable," as used in this subpart, means a       deliverable item that is a single end product or undertaking,     entire   in nature, that cannot be feasibly subdivided into     discrete elements   or phases without losing its identity.



{204.7102}  Policy

        (b)     The numbering procedures are mandatory for all contracts      where separate contract line item numbers are assigned, unless-


{204.7103-1}  Criteria for establishing.
        Contracts shall identify the items or services to be acquired as separate contract line items unless it is not feasible to do so.
        (a)     Contract line items shall have all four of the following characteristics; however, there are exceptions within the characteristics, which may make establishing a separate contract line item appropriate even though one of the characteristics appears to be missing--

 * * * *

    
      (4) Single accounting classification citation.
         (i)     Each contract line item shall have reference a single       accounting classification citation except as provided in     paragraph (a)(4)(ii) of this section.
    (ii)   The use of multiple accounting classification citations     for a contract line item is authorized in the following      situations:
                  (A) A single nonseverable deliverable to be paid for with R&D or other funds properly incrementally obligated over  several fiscal years in accordance with DoD policy;
                (B) A single nonseverable deliverable to be paid for with different authorizations or appropriations, such as in the acquisition of a satellite or the modification of production tooling used to produce items being acquired by  several activities: or

                (C) A modification of an existing contract line item for  anonseverable deliverable that results in the delivery of  modified item(s) where the item(s) and modification are to be paid for with different accounting classification citations.

(iii)   When the use of multiple accounting classification  citations is authorized for a single contract line item, establish informational subline items for each accounting  classification citation in accordance with 204.7104-1(a).

{204.7104-1} Criteria for establishing.

        * * * *

        (a) Informational subline items.

        * * * *


        (3) Informational subline items shall be used to identify each accounting classification citation assigned to a single contract  line item number when use of multiple citations is authorized  (see 204.7103-1(a)(4)(ii)). 
(b)     Separately identified subline items.

        (1)     Subline items will be used instead of contract line items to facilitate payment, delivery tracking, contract funds accounting, or other management purposes.  Such subline items may be used  when items bought under one contract line item number--
        (i)     Are to be paid from more than one accounting classification. A subline item shall be established for the quantity associated with the single accounting classification citation. Establish a line item rather than a subline item if it is likely that a subline item may be assigned additional accounting classification citations at a later date.  Identify the funding as described in 204.7104-1(a)(3);


{204.7104-2} Numbering procedures.

        * * * *

        (e) The following examples illustrate subline item numbering--

        * * * *


        (5)     Subline items structured to provide the capability for relating subordinate separately priced packaging costs to the overall contract line item.  (Separate delivery schedules shall be established for the subline item identifying the contractor's product and for the subline item identifying packaging.  No schedule will be established for the contract line item.)
                                                                       
ITEM NO.        SUPPLIES/                               QUANTITY        UNIT    UNIT            AMOUNT
          SERVICE                                                               	           PRICE
                                                                       
0001            6105-00-635-6568 50380          
                Ref No 63504-WZ Armature         
0001AA  6105-00-635-6568 50380       	   2               EA      $2,895.87       $5,791.74
                Ref No 63504-WZ Armature        
                Motor ACRN:AA
0001AB  Packaging ACRN:AA          		   2               EA       $289.58        $579.16

                                                                       
        * * * *
        (7)     Informational subline items established to identify multiple accounting classification citations assigned to a single contract line item.
                                                                       
ITEM NO.        SUPPLIES/                               QUANTITY        UNIT    UNIT             AMOUNT
                SERVICE                                     			         PRICE
                                                                       
0001            Air Vehicle                        	    1                EA             $6,700,000              $6,700,000
000101    ACRN: AA $3,300,000
000102    ACRN: AB $2,000,000
000103    ACRN: AC $1,400,000
                                                                       
        (8)Subline items structured to identify parts of an assembly (delivery schedule and price shall be established for each identified part at the subline item level, not for the   assembly at the contract line item level).

        * * * *


        (9) Subline items structured to identify parts of a kit  kitat the contract line item level). 

        * * * *


{204.7107}    Contract accounting classification reference number (ACRN).
        (a)     When a contract contains more than one accounting classification citation,contracting offices shall use ACRNs.  Assigning the ACRNs is the responsibility of the contracting office issuing a contract, basic ordering agreement, or blanket purchase agreement.  This authority shall not be delegated.  If more than one office will use the contract (e.g., ordering officers, other contracting officers), the contract must contain instructions for assigning ACRNs.
        (b)     ACRNs are used to process certain contract data through the Military Standard Contract Administration Procedures (MILSCAP) system.  The MILSCAP system uses the ACRN to relate certain contract administration records to the accounting classification used to obligate funds on the contract.  Among these records are the accounting classification trailer record, the supplies schedules data record, and the services line item data record.  ACRNs are also used to associate the various record formats of the contract payment notice as described in chapter 9 of the MILSCAP Manual, DoD 4000.25-5-M.
        (c)     Procedures for establishing ACRNs.
                ACRNs consist of a two position alpha or alpha/numeric code assigned to each discrete accounting classification within each contract. ACRNs shall be established in accordance with the following guidelines:
                (1) Do not use the letters I and O.
                (2)     In no case shall an ACRN apply to more than one accounting classification citation, nor shall more than one ACRN be assigned to one accounting classification citation.
        (d)     Using the ACRN in the contract.
                (1)     Show the ACRN as a detached prefix to the accounting classification citation in the accounting and appropriation data block or, if there are too many accounting classification citations to fit reasonably in that block, in section G (Contract Administration Data).
                (2)     ACRNs need not prefix  accounting classification citations if  accounting classification citations are present in the contract only for the transportation officer to cite to Government bills of lading.
                (3)     If the contracting officer is making a modification to a contract and using the same  accounting classification citations, which have had ACRNs assigned to them, the modification need cite only the ACRNs in the accounting and appropriations data block or on the continuation sheets.
        (e)     Showing the ACRN in the contract.
                If there is more than one ACRN in a contract, all the ACRNs will appear in several places in the schedule (e.g., ACRN:AA).


                (1)     Ship-to/mark-for block.
                Show the ACRN beside the identity code of each activity in the ship-to/mark-for block unless only one accounting classification citation applies to a line item or subline item.  Only one ACRN may be assigned to the same ship-to/mark-for within the same contract line or subline item number unless multiple accounting classification citations apply to a single nonseverable deliverable unit such that the item cannot be related to an individual accounting classification citation.
                (2)     Supplies/services column.
                        (i)     If only one accounting classification citation applies to a line item or a subline item, then the ACRN may be shown in the supplies/services column near the item description.
                        (ii)    If more than one  accounting classification citation                                              applies to a single contract lime item, identify each                           assigned ACRN and the amount of associated funds using  informational subline items (see 204.7104-1(a)).
                (3) Payment Instructions.
                        (i)When a contract line item is funded by multiple accounting classification citations the contracting officer shall provide adequate instructions in section G (Contract Administration Data), under the heading "Payment Instructions for Multiple Accounting Classification Citations" to permit the paying office to charge the  accounting classification citations assigned to that contract line item (see 204.7104-1(a)) in a manner that reflects the performance of work on the contract. If additional  accounting classification citations are subsequently added, the payment instructions must be modified to include the additional  accounting classification citations.

                        (ii)Payment instructions shall provide a methodology for the paying office to assign payments to the appropriate  accounting classification citation(s), based on anticipated contract work performance.  The method established should be consistent with the reasons for the establishment of the line items. The payment method may be based upon a unique distribution profile devised to reflect how the funds represented by each of the  accounting classification citations support contract performance. Payment methods that direct that payments be made from the earliest available fiscal year funding sources, or that provide for proration across  accounting classification citations assigned to the line item, or a combination thereof, may  be used if that methodology reasonably reflects how each of the  accounting classification citations supports contract performance.  
        * * * *


{215.406-2} Part 1--The Schedule.

                (g)     When a contract contains both fixed-priced and cost-reimbursement line items or subline items, the contracting officer shall provide in Section B, Supplies or Serviced and Prices/Costs, an identification of contract type specified for each contract line item or subline item o facilitate appropriate payment.

        * * * *


{217.7405} Definitizations
        For each definitization modification, the contracting officer shall include all data required by 243.171.

{217.7406}    Contract clause.
        Use the clause at 252.217-7027, Price Ceiling, in all undefinitized contract actions and solicitations associated with UCAs.  Insert the not-to-exceed amount.

        * * * *

{243.171} Obligation or deobligation of funds.
        For each contract modification, the contracting officer shall identify, in Section G, Contract Administration Data (Uniform Contract Format), or the contract schedule (Simplified Contract Format), under the heading "Summary for the Payment Office", information sufficient to permit the paying office to readily identify the changes for each contract line and subline item as follows--
                (a) The amount of funds obligated by prior contract actions, to include the total cost and fee if a cost-type contract; the target fee at time of contract award if a cost-plus-incentive-fee contract: the base fee if a cost-plus-award-fee contract; or the target price and target profit if a fixed-price-incentive contract;
                (b) The amount of funds obligated or deobligated by the instant modifications, categorized by the types of contracts specified in paragraph (a) of this section; and 
                (c) the total cumulative amount of obligated or deobligated funds, categorized by the types of contracts specified in paragraph (a) of this section.

        * * * *


ITEM B-2  OSD POLICY LETTER DATED 07 AUG 1995
          DFARS CASE: 95-D701
                D.L. 95-016 
   
SUBJECT: CONTRACT AWARD

        We have amended the Defense Federal Acquisition Regulation Supplement (DFARS) to implement sections 1506, 3065, 3066, and 7101 (b) of the Federal Acquisition Streamlining Act of 1994 (Pub.L. 103-355).

        The attached interim rule (1) revises DFARS 206.302-5(b)(i) to exclude soft drinks, that are manufactured in the United States, form the limitations which apply to noncompetitive acquisition of items from Military Exchange stores outside the United States: (2) adds a new section at DFARS 207.470 to place restrictions on the lease of vessels, air craft, or vehicles for a term of 18 months or more; (3) deletes the language at DFARS 215.871 concerning production special tooling and production special test equipment; and (4) Deletes DFARS 219.602-1(a), 219.602-70, and 252.219-7009 to eliminate certain notification requirements pertaining to the Certificate of Competency Program.

        This interim DFARS rule is effective immediately and will be included in a future defense acquisition circular.


                                                                Eleanor Spector
                                                                Director, Defense Procurement


        * * * *


{206.302-5}   Authorized or required by statute.
        (b)     Application. 
                Agencies may use this authority to--
                 (i)Acquire supplies and services from military exchange stores    outside the United States for use by the armed forces outside   the United States in accordance with 10 U.S.C. 2424(a) and subject to the limitations of 10 U.S.C.2424(b).The limitations  of 10 U.S.C. 2424 (b)(1) and (2) do not apply to the purchase  of soft drinks that are manufactured in the United States. for the purposes of U.S.C. 2424, soft drinks manufactured in the United States are brand name carbonated soda, manufactured in the United States as evidenced by product markings.

        * * * *


{207.470} Statutory requirement.

As required by U.S.C. 2401a, the contracting officer shall not enter into any contract for any vessel, aircraft, or vehicle through a lease, charter, or similar agreement with a term of 18 months or more, or extend or renew any such contract for a term of 18 months or more, unless the head of the contracting activity has--
                (a) Considered all  costs of such a contract (including estimated termination liability); and
                (b) Determined in writing that the contract is in the best interest of the Government.   

        * * * *

215.871 is deleted and reserved

        * * * *

{19.602-1(a)}  Deleted

        * * * *

{219.602-70}   Deleted
        
        * * * *

{252.219-7009}  Deleted



ITEM B-3,  OSD POLICY LETTER DATED 10 JULY, 1995
                 DFARS CASE:  95-D002
                 D.L. 95-015

SUBJECT: Test Program for Negotiation of Comprehensive Small business Subcontracting Plans.

        We have amended the Defense Federal Acquisition Regulation Supplement (DFARS) to extend the period of the test program for Negotiation of Comprehensive Small Business Subcontracting Plans through September 30, 1998, as required by section 7103 of the Federal Acquisition Streamlining Act of 1994 (Pub. L. 103-355).

        The attached final DFARS rule (Atch 1) is effective immediately and will be published in a future Defense Acquisition Circular.

        For your information, I have provided a copy of the revised Test Program for Negotiation of Small Business Subcontracting Plans  prepared by the office of Small and Disadvantaged Business Utilization (Atch 2).


                                                        Eleanor R. Spector
                                                        Director, Defense Procurement    

Revised text is as follows:

        * * * *

{219.702}     Statutory requirements.
        (a)     Section 834 of Pub. L. 101-189 requires the DoD to establish a test program to determine whether comprehensive subcontracting plans on a corporate, division, or plant-wide basis will increase subcontracting opportunities for small business concerns.
        (i)     The test program--
                (A)     Will be conducted--
                        (1)     From October 1, 1990, through September 30, 1998.
        * * * *

{252.219-7004}        Small Business and Small Disadvantaged Business
Subcontracting Plan (Test Program).
As prescribed in 219.708(b)(1)(B), use the following clause:

        SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS SUBCONTRACTING
        PLAN (TEST PROGRAM) (JUL 1995)

        (a)     Definition.
                "Subcontract," as used in this clause, means any agreement (other than one involving an employer-employee relationship) entered into by a Federal Government prime Contractor or subcontractor calling for supplies or services required for performance of the contract or subcontract.
        (b)     The Offeror's comprehensive small business subcontracting plan and its successors, which are authorized by and approved under the test program of Section 834 of Pub. L. 101-189, as amended by Section 7103 of Pub.L. 103-355, shall be included in and made a part of the resultant contract.  Upon expulsion from the test program or expiration of the test program, the Contractor shall negotiate an individual subcontracting plan for all future contracts that meet the requirements of Section 211 of Pub. L. 95-507.
        * * * *

AFAC 92-49                August 22, 1995                    B-3.2

        TEST PROGRAM FOR NEGOTIATION OF COMPREHENSIVE SMALL
        BUSINESS SUBCONTRACTING PLANS

I. Purpose

This document implements section 843 of Public Law 101-189, the National Defense Authorization Act for Fiscal Years 1990 and 1991, as amended.  The primary purpose of the Test Program (the Program) is to determine whether the negotiation and administration of comprehensive small business subcontracting plans will result in increased opportunities for small business concerns performing under Department of Defense (DoD) contracts.

II. Authority

This program is established pursuant to section 834 of the National Defense Authorization Act for Fiscal Years 1990 and 1991, as amended.

III. Program Requirements

        A. The Program  shall be conducted from October 1, 1990, through September 30, 1998.

        B. The selection of contractors for participation in the Program shall be in accordance with section 834(b)(3).  Large business concerns at the major (total) corporate level that , during the preceding fiscal year:
                1. Pursuant to at least five Department of Defense (DoD) contracts, furnished supplies or services (including professional services) to the DoD, engaged in research and development for the Department , or performed construction for the Department; and were paid $25,000,000 or more for such contract activities. 
                2. (a) Achieved a small disadvantaged business (SDB) subcontracting participation rate of five percent or more during 
                the preceding fiscal year 1994; or
                  (b) Firms with an SDB subcontracting participation rate of less than five percent during the preceding fiscal year 1994 may request through the designated contracting activity to participate under the detailed plan with milestones leading to attainment of at least five percent SDB subcontracting participation rate by fiscal year 1998.  The provisions of paragraph B(2) do not apply to the eight original contractors accepted into the Program.
                3. Shall accept a SDB goal for each fiscal year of not less than five percent, or a SDB goal that is in accordance with the milestone established in paragraph B(2)(b) above.
                4. Shall comply with the requirements of the Defense Federal Acquisition Regulation Supplement Subpart 215.605 for source selection purposes.

        C. For the purposes of the Program, to the extent practicable, contractors selected to participate shall establish their comprehensive subcontracting plans on the same corporate , division or plant-wide basis under which they submitted the Standard Form (SF) 295 during the preceding fiscal year except that in the case of a division or plant that historically reported through a higher level division, but would meet the criteria under B(2) above. shall be permitted to participate in the program if the division, plant or profit center can demonstrate a five percent or greater subcontract performance level with SDB concerns.
        
        D. Contractors selected for participation shall:
                1. Be eligible in accordance with Ill(B) and (C),
                2. Have reported to the DoD on the SF 295 for the last fiscal year, except as applicable under Ill(C) above,
                3. Offer a broad range of subcontracting opportunities.
                4. Voluntarily agree to participate, and 
                5. Have at least one active contract that requires a subcontracting plan at the designated DoD buying activity responsible for negotiating the Comprehensive Subcontracting Plan.

IV. Elements of the Comprehensive small Business Subcontracting Plan

        A. The comprehensive small business subcontracting plan shall address each of the eleven elements set forth in paragraph (d) of the clause at FAR 52.219-9, "Small business and Small Disadvantaged Business Subcontracting Plan."
                1. the subcontracting plan, percentage and corresponding dollar goals for awards to small business, small disadvantaged business and women-owned small business concerns shall be developed by the contractor for its entire business operation in support of all DoD contracts regardless of dollar value.
                2. Participating contractors shall include separate specific goals and timetables for the awarding of subcontracts in two industry categories which have not historically  been made available to small business, small disadvantaged business and women-owned small business. These industry categories will be recommended by the contractor and approved by the contracting officer.  Subcontract awards made in support of the specific industry categories shall also count towards attainment of the overall small business, small disadvantaged business and women-owned small business goals.
                3. The subcontracting plan shall set forth the prime contractor's actions to publicize prospective subcontract opportunities for small business, small disadvantaged business and women-owned small business concerns.
        B. Subcontracting plans to be established under the Program shall be submitted each year by participating contractors to the designated contracting officer 45 days prior to the end of the Government's fiscal year (September 30). However, new contractors requesting participation under the program shall submit subcontracting plans to the contracting officer as close as possible to September 30.

V. Procedures

        A.  The Service Acquisition Executive within each Military Department and Defense Agency having contractors that meet the requirements of ill(B) shall designate one contracting activity to participate in the Program.
        B. The designated contracting activity will accomplish the following:
                1. With the coordination of the Director, Office of Small and Disadvantaged Business Utilization for their military department or Defense Agency, select as many eligible prime contractors for participation under the Program as deemed appropriate.
                2. Establish a "Comprehensive Small Business Subcontracting Plan" negotiating team(s) composed as follows: 
                        a. A contracting officer(s) who will be responsible for negotiation and approval of the comprehensive subcontracting plan(s) as well as the responsibilities at FAR 19.705.
                        b. The contracting activity's Small and Disadvantaged Business Utilization Specialist.
                        c. The Small and Disadvantaged Business Utilization Specialist of the cognizant contract administration activity that administers the preponderance of the selected prime contractor's contracts and/or the appropriate individual who will administer contractor performance under the test in accordance with FAR 19.706 and the provisions herein.
                        d. Production specialists, price analyst and other functional specialists as appropriate.

        C. The designated contracting officer shall:
                1. Solicit proposed comprehensive subcontracting plans from selected contractor(s) as soon as possible and by July 1, annually thereafter.
                2. By October 1, and annually thereafter, review, negotiate, and approve on behalf of the DoD a comprehensive subcontracting plan for each selected contractor.
                3. Distribute copies of the approved subcontracting plan in accordance with VI(A) below.
                4. Upon negotiation and acceptance of the comprehensive subcontracting plan, the contracting officer shall obtain from the contractor:
                        a. A listing of all active DoD contracts that contain individual subcontracting plans required by section 211 of Public Law 95-507.             b. The listing shall include the following:
                         i.   Contract number.
                         ii.  Name and address of contracting activity.
                         iii. Contracting officer's name and phone number.
                5. Upon receipt of the information provided by the participating contractor under 4 above, the contracting officer shall notify the designated administrative contracting officer to issue a comprehensive change order, which modifies all of the contractor's active DoD contracts that include subcontracting plans. The modification will substitute the contractor's approved comprehensive subcontracting plan for the individual plans, will substitute the clause at DFARS 252.219-7004 for the clause at FAR 52.219-10 and DFARS 252.219-7003 and 252.219-7005, as appropriate.
                6. Review annually, with the contract administration activity contractor's performance under the plan. Document the review findings and distribute, in accordance with VI(A), within 45 days of the end of the fiscal year.
                7. By November 15 of the year after acceptance and annually thereafter, determine whether the contractor has met its comprehensive subcontracting goals.  If the goals have not been met, determine whether there is any indication that the contractor failed to make a good faith effort to take appropriate action.
                8. By December 15, 1998, prepare and submit a report on each participating contractor's performance which details the results of the Program. The report must compare the contractor's performance under the Program with it's performance for the three fiscal years prior to acceptance into the program.  The report distribution will be in accordance with VI(A) below.    

        D. Participating contractors:
                1. To the extent practicable, shall establish their comprehensive subcontracting plans on the same corporate, division or plant-wide basis under which they submitted the Standard Form (SF)295
                during fiscal year 1994, except those contractors that historically reported through a higher headquarters however as a separate reporting profit center, plant or division the contractor achieved an SDB subcontracting performance rate of five percent or greater in fiscal year 1994.
                2. Upon negotiation of an acceptable comprehensive subcontracting plan shall be exempt from individual contract by contract reporting requirements for DoD contracts unless otherwise required in accordance with (III)(B)(5).
                 3. Shall continue individual contract reporting on non-DoD contracts.
                4. Shall comply with the flow-down provisions of section 211 of Public Law 95-507.  Large business concerns receiving a DoD subcontract in excess of $500,000 ($1,000,000 for construction) are required to adopt a plan similar to that mandated by the clause at 52.219-9.  Participating subcontracting deviation provisions of 252.219-7004.  Accordingly, large business subcontractors to the participating contractors shall be required to establish individual subcontracting plans with specific goals for awards to small business, small disadvantaged business and women-owned business.
                5. Upon expulsion from the Program or Program termination on September 30,1998, shall negotiate and establish individual subcontracting plans on all future DoD contracts that otherwise meet the requirements of section 211 of Public Law 95-507.

VI Monitoring and Reporting of Comprehensive Subcontracting Plans and Goals

        A. Upon negotiation and acceptance of comprehensive subcontracting plans and goals, the designated activity shall immediately forward one copy of the plan to each of the following:
                1. Director, Small and Disadvantaged Business Utilization, Office of the Under Secretary of Defense (Acquisition and Technology), Room 2A338, The Pentagon, Washington, DC, 20301-3061. 
                2. Director, Small and disadvantaged Business Utilization, for the Military Department or Defense agency of the activity that negotiated and accepted the comprehensive subcontracting plan.
                3. The cognizant contract administration office.
        B. Each participating contractor shall complete the Standard Form (SF) 295 "Summary Subcontract Report" in accordance with the instructions on the back of the form on a quarterly basis, except as noted below:
                1. Participating contractors shall be exempt from completing items 17 and 18 under "Subcontracting Goal Achievement."
                2. Participating contractors shall enter in item 16 "Remarks" block the annual corporate, division or plant-wide small business, small disadvantaged business and women-owned small business percentage
                and corresponding dollar goals.
                3. Participating contractors shall also enter separately in item 14 the percentage and corresponding dollar goals for each of the two selected industry category (see section IV(A)(2)).
                4. Participating contractors shall also enter separately in item 14 on a quarterly basis the percentage and corresponding dollar amount of subcontract awards made in each of the two selected industry categories.
                5. Participating contractors shall be exempt from the completion of SF 294 "Subcontract Report for Individual Contracts" for DoD contracts during their participation in the Program.  

        * * * * 

ITEM B-4,  OSD POLICY LETTER DATED 22 AUG, 1995.
                        DFARS CASE:  95-D008
                        D.L. 95-017

SUBJECT: Evaluation Preferences for Small Disadvantaged Business Concerns.

        We have amended th-De Defense Federal Acquisition Regulation Supplement (DFARS) to state that the evaluation preference for small disadvantaged business concerns shall not be used in acquisition for long distance telecommunications services.

        The attached final DFARS rule is effective immediately and will be published in a future Defense Acquisition Circular.


                                                        Eleanor R. Spector
                                                        Director, Defense Procurement



Regulatory changes are as follows:

FINAL RULE: DFARS CASE 95-D008

        SUBPART 219.70--EVALUATION PREFERENCE FOR SMALL
        DISADVANTAGED BUSINESS (SDB) CONCERNS 

        * * * *

{219.7001}    Applicability.
        (a)     * * *

        (b)Do not use the evaluation preference in acquisitions which-- 
                (1) * * *
                (2) * * *
                (3)     Are set-aside for small businesses; 
                (4)     Are for commissary or exchange resale; or
                (5)  Are for long distance telecommunications services

        * * * *


ITEM B-5,  OSD LETTER DATED 03 JULY 1995
                        DFARS CASE: 94-D313
                        D.L. 95-011

SUBJECT: Determination of Public Interest Under the Buy American Act


        We have amended the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 812 of the Fiscal Year 1995 Defense Authorization Act (Pub.L. 103-337).  Section 812 adds several factors to the series of factors at 10 U.S.C. 2533 that must be considered when deciding whether to grant a public  interest exemption to the Buy American Act.  In addition, we have changed the approval levels for granting such exemptions.

        The attached final DFARS rule is effective immediately and will be published in a future Defense Acquisition Circular.



                                                        Eleanor R. Spector
                                                        Director, Defense Procurement


Changes are as follows:


        SUBPART 225.1--BUY AMERICAN ACT--SUPPLIES

{225.102}     Policy. 
        (a)(2)The cost of a domestic end product is unreasonable if it is                not the low evaluated offer when evaluated under 225.105.
                (3)     (A)Specific public interest exceptions for DoD are in 225.872.
                        (B)Normally, use the evaluation procedures in 225.105, but consider recommending a public interest exception where the purposes of the Buy American Act are not served, or in order to meet a need set forth in 10 U.S.C. 2533.  For example, a public interest exception may be appropriate--
                 (1)    If accepting the low domestic offer will involve substantial foreign expenditures; or accepting the low foreign offer will involve substantial domestic expenditures.
                 (2) To ensure access to advanced state-of-the-art                              commercial technology, or
           (3)    To maintain the same source of supply for spare and replacement parts (also see paragraph (b)(iii)(B) of this section)-
                 (i) For an end item that qualifies as an American good;     or
                (ii) In order not to impair integration of the                       military and commercial industrial base.                

                (C)A determination whether to grant a public interest    exception shall be made after consideration of the factors  in 10 U.S.C. 2533-
                (1) At a level above the contracting officer for                          acquisitions valued at less than $100,000;
                (2) By the head of the contracting activity for acquisitions     valued at  $100,000 or more, but less than $1,000,000;     or
                (3) By the agency head for acquisitions valued at                 $1,000,000 or more. 

        * * * *


ITEM B-6  OSD LETTER DATED 03 JULY 1995
                        DFARS CASE: 95-D301
                        D.L. 95-013

SUBJECT: Supercomputers

        We have amended the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 8023 of the Fiscal Year 1995
Defense Appropriations Act (Pub.L.103-335). Section 8023 and comparable sections in prior Defense Appropriations Acts require that any supercomputers acquired with defense funds appropriated in Fiscal Years 1988 through 1995 must be manufactured in the United States unless the Secretary of Defense certifies to the Congress that the supercomputers are for national defense purposes and are not available from United States manufactures.

        The attached final DFARS rule is effective immediately and will be published in a future Defense Acquisition Circular.



                                                        Eleanor R. Spector
                                                        Director, Defense Procurement


Changes are as follows:


{225.7023}  Restriction on supercomputers.

{225.7023-1}  Restriction.

In accordance with Section 8101 of Pub.L. 100-202, and similar sections in subsequent Defense Appropriations Acts. do not purchase any supercomputer that is not manufactured in the United States.

{225.7023-2} Waiver.

The restriction in 225.7023-1 may be waived by the Secretary of Defense on a case-by-case basis, after the Secretary of Defense certifies to the Armed Services and Appropriations Committees of Congress that--
        (a) Adequate U.S. supplies are not available to meet      requirements on a timely basis; and                               (b) The acquisition must be made in order to acquire capability for national security purposes.

{225.7023-3} Contract Clause.

Use the clause at 252.225-7011, Restrictions on Acquisition of Supercomputers, in solicitations and contracts for the acquisition of supercomputers.

        * * * *


{252.225-7011}  Restriction on Acquisition of Supercomputers

        As prescribed in 225.7023-3, use the following clause:
        RESTRICTION ON ACQUISITION OF SUPERCOMPUTERS (JULY,1995)

The contractor agrees that any supercomputers furnished under this contract have been manufactured in the United States.

        (End of Clause)
        * * * *

ITEM B-7,   OSD LETTER DATED 13 JUNE 1995
                      DFARS CASE: 95-D007
                      D.L. 95-010

SUBJECT: Contract Quality Requirements


        We have amended Part 246 of the Defense Federal Acquisition Regulation Supplement to encourage increased use of commercial quality standards by removing existing requirements to use military quality standards. 

        We have revised the definition of "quality program"; replaced direct references to MIL-I-45208 and MIL-Q-9858 with references to higher-level quality requirements, and deleted Table 46-1, Contract Quality Requirements Guide.


        The attached final DFARS rule is effective immediately and will be published in a future Defense Acquisition Circular.



                                             Eleanor R. Spector
                                       Director, Defense Procurement


Changes are as follows: 



        SUBPART 246.1--GENERAL

{246.101}     Definitions.
                * * * *
        "Quality program" is a program which is developed, planned, and managed to carry out cost effectively all efforts to effect the quality of materials and services from concept exploration and definition through demonstration and validation, engineering and manufacturing development, production and  deployment, and operations and support.


{246.102}     Policy.
        * * * *
        (1)     ****
  (3) ****
        (4)     Provide contractors the maximum flexibility in establishing efficient and effective quality programs to meet contractual requirements. Contractor quality programs may be modeled on military, commercial, national, or international quality standards.

        * * * *

{246.202-3}Higher-level contract quality requirements.
        (i) Higher-level contract quality requirements are used in addition to a standard inspection requirement.
        (ii) Higher-level contract quality requirements, including nongovernment quality system standards adopted to meet DoD needs, are listed in the DoD Index of Specifications and Standards.

        * * * *


{246.204}     Application of criteria.

        When purchasing a commercial item, the technical, quality assurance, and contracting activities must work together to tailor contract quality requirements to--
                (1)Eliminate or minimize special Government testing, quality control, and inspection requirements.  Consider--
                (i)The item's application;
                (ii)The cost objectives of the acquisition; and
                (iii)The item's reliability as established in the commercial market;
                (2)Maximize use of the certificate of conformance consistent with FAR 46.504; and
                (3)Provide for examination and acceptance at the most economical point (source or destination).

        * * * *


{246.704}     Authority for use of warranties.
The chief of the contracting office must approve use of a warranty, except in acquisitions for--
        (1) ****
        (2) ****
        (3) ****
        (4)     Supplies and services in fixed price type contracts containing quality assurance provisions that reference higher-level contract quality requirements; or

        * * * * 


ITEM B-8,  OSD POLICY LETTER DATED 06 JULY, 1995.
                DFARS CASE: 95-D711
                D.L. 95-014

SUBJECT: Contract Data Reporting


        We have amended the Defense Federal Acquisition Regulation Supplement (DFARS) to revisit the DD Form 350 and DD Form 1057 contract reporting requirements.  These revisions reflect the new simplified acquisition procedures in Federal Acquisition Circular (FAC) 90-29, published in the Federal Register on July 3, 1995.

Except for contracting actions pertaining to contingencies as described at FAR 13.101 in FAC 90-29, contracting officers will continue to use DD Form 350 to report all contracting actions exceeding $25,000.  Contracting actions pertaining to contingencies will continue to be reported on DD Form 1057.  Until the forms are revised, the term "small purchase procedures" used on DD Forms 350 and 1057 shall be interpreted to mean "simplified acquisition procedures".

        The attached final DFARS rule is effective immediately and will be published in a future Defense Acquisition Circular. A summary of the effect of the new reporting requirements should be directed to the departmental data collection points specified in DFARS 204.670-1(c).




                Eleanor R. Spector
                Director, Defense Procurement
 

Revised text is as follows:

253.204-70  DD Form 350, Individual Contracting Action Report.

        * * * * 

        (b) Part B of the DD Form 350

        * * * *

          (13) BLOCK 13, KIND CONTRACTING ACTION.

        
                 (iv)Code 4 - Order Against DoD BOA.  Enter code 4 when the contracting action is an order or definitization of an order (not a modification of an order).  Examples include orders against a basic ordering agreement,priced exhibit, or production list entered into by a DoD component (see Code 3 for actions which are not orders or modifications of orders). Enter code 9 if the action is an order under a blanket purchase agreement.    

        * * * *

                 (ix)Code 9 - Small Purchase Procedure.    
                Enter code 9 if the contracting action including actions 
                in a designated industry group under the Small Business Competitiveness Demonstration Program (FAR 19.10), is anaward or modification of an award pursuant to FAR Part 13.

        * * * *

        (c)  Part C of DD Form 350.

        * * * *

           (iii) Block C3, EXTENT COMPETED.

        * * * *

        (a) Code A - Completed Action.  Enter Code A when--

        * * * *

                (6) Simplified acquisition procedures were used and             competition was obtained.

        * * * *

                 (viii)  BLOCK C8, SOLICITATION PROCEDURES.

                (A) Leave Block C8 blank if--
                (1) the original contract resulted from a solicitation issued before April 1, 1985 (i.e., before the effective date of the Competition in Contracting Act); or
                (2) The action is pursuant to simplified acquisition procedures (Block B13 is coded 9).
                (B) If the action is an order/modification under a Federal Supply Schedule (Block B13 is coded 6), use code B for single award schedules and code F for multiple award schedules.
                (C) Otherwise, enter one of the 12 codes-- 
                (1)Code A - Full and Open Competition--Sealed Bid.  Enter code A if the action resulted from an award pursuant to FAR 6.102(a).  
                (2)Code B - Full and Open Competition--Competitive Proposal.  Enter code B if the action resulted from an award pursuant to FAR 6.102(b). 
                (3)Code C - Full and Open Competition--Combination.  Enter code C if the action resulted from an award using a combination of competitive procedures (e.g., two-step sealed bidding) pursuant to FAR 6.102(c). 
                (4)Code D - Architect-Engineer.  Enter code D if the action resulted from selection of sources for architect-engineer contracts pursuant to FAR 6.102(d)(1). 
                (5)Code E - Basic Research.  Enter code E if the action resulted from competitive selection of basic research proposals pursuant to FAR 6.102(d)(2). 
                (6)Code F - Multiple Award Schedule.  Enter code F if the action is an award of a multiple award schedule pursuant to FAR 6.102(d)(3) or an order against such a schedule.  
                (7)Code G - Alternate Source--Reduced Cost.  Enter code G if the action resulted from use of procedures to reduce overall cost pursuant to FAR 6.202(a)(1). 
                (8)Code H - Alternate Source--Mobilization.  Enter  procedures for having a facility available for national defense or industrial mobilization pursuant to FAR 6.202(a)(2). 
                (9)Code J - Alternate Source--Eng/R&D Capability.  Enter code J if the action resulted from use of procedures for establishing or maintaining an essential engineering, research, or development capability pursuant to FAR 6.202(a)(3). 
                (10)Code K - Set Aside.  Enter code K if the action      resulted from any:
                (i)Set-aside for small business concerns (FAR 6.203 including small business innovation research (SBIR) actions and awards to blind or other severely handicapped organizations which were participating in a set-aside for small business concerns (see FAR 19.501(k)). 
                (ii)Set-aside for small disadvantaged business  concerns (206. 203). 
                (iii)Total or partial set-asides (including portions of broad agency announcements (BAAs)) for historically black colleges and universities of minority institutions (see 206.203 and 235.016).
                (iv)Competition among section 8(a) firms under FAR 19.805 (report noncompetitive 8(a) awards as code N). 
                (11)Code M - Otherwise Authorized by Statute.  Enter code M if using contracting procedures that are expressly authorized by statute and not addressed in FAR Part 6.302-5 (see FAR 6.001(b)).  Do not use code M for statutes addressed in FAR 6.302-5 (instead use code N in this Block and code 5A in Block C9). 
                (12)Code N - Other Than Full and Open Competition.  Enter code N if the action resulted from use of other than full and open competition pursuant to FAR 6.3.  This includes awards to qualified nonprofit agencies for the blind or other severely handicapped (NIB/NISH or other workshops) or noncompetitive awards to the Small Business Administration under Section 8(a) of the Small Business Act (FAR 6.302-5(b). 

        * * * *

        (d) Part D of the DD Form 350.

        * * * *

                (5)Complete Part D blocks as follows--

        * * * *
         
                (iv)BLOCK D4, PREFERENCE PROGRAM.

        * * * *
                
                 (A)BLOCK D4A, TYPE OF SB SET-ASIDE.

        * * * *

                
                (2)Code B - Total SB Set-Aside.  Enter code B if the action was a total set-aside for small business (FAR 19.502-2), including actions reserved exclusively for small business concerns pursuant to FAR 13.105,  or if the action resulted from the Small Business Innovation Research Program.

        * * * *  

                (7)Deleted  

        * * * *

{253.204-71}DD Form 1057, Monthly Contracting Summary of Actions $25,000 or Less. 

        * * * *

        (e)     Section C, Extent Competed.

        * * * *

                (2)Block C2, NOT AVAILABLE FOR COMPETITION. 
                (i)Enter the total number and dollar value of contracting actions which are not available for competition. 
                (A) Include in Block C2--
        * * * *
        
                (3)Actions (including modifications) at or below the micropurchase threshold at FAR 13.101; 

        * * * *


Summary fo the Effect of Changes to DFARS 253.204


1. Except for contracting actions pertaining to contingencies as specified in FAR 13.101 in FAC 90-29, all contracting actions exceeding $25,000 shall continue to be reported on the DD Form 350.  The Federal Acquisition Streamlining Act of 1994 (Public Law 103-335) requires detailed reporting of contracting actions exceeding $25,000 (including actions using simplified acquisition procedures, i.e. purchase orders and orders/calls under a blanket purchase agreement(BPA)) until October 1, 1999

2. All contracting actions pertaining to contingencies as specified in FAR 13.101 will continue to be reported on the DD Form 1057.

3. The term "small purchase procedure" is deleted from the acquisition regulations, and Code 9 in Block B13 is renamed "Purchase/Modification Using Simplified Acquisition Procedures."

4. Orders/calls/modifications awarded on or after July 3, 1995 13 , in lieu of code 4.  Purchase orders/modifications awarded on or after July 3, 1995, are also reportable as code 9.  When code 9 is entered in Block B13, Block C8 will be blank.  Automated reporting systems will be changed to allow Block C8 to be blank whenever code 9 is selected.  Orders under basic ordering agreements will continue to be reported as code 4. 

5.  The category of small business-small purchase set-asides is no longer valid.  Actions under the simplified acquisition threshold reserved for small business are reportable as small business set-asides. However, to reduce the opportunity to lose data, the OSD data base will continue to accept DD Form 350 data reported as small-business, small-purchase actions for the remainder of this fiscal year.  Similarly, the OSD data base will continue to accept DD Form 1057 data reported as small business-small purchase actions until the form and the instructions for the DD Form 1057 are changed.

        * * * *

ITEM C-1,  OSD LETTER DATED 11 AUG 1995. 
                FROM DP/CPF

SUBJECT: Consideration for Changing Contract Requirements


        In connection with some of the changes that are part of our reinvention of the procurement process, there appears to be confusion
about whether some of our longstanding procurement are grounded in policy or in law.  In particular, some have asked whether price adjustments are always required as we modify existing contracts to replace government unique requirements with commercial specifications.

        The Comptroller General has determined that no official of the government is authorized to give up a right that the United States has under a contract without obtaining adequate consideration. Contractors would not agree to our adding requirements to a contract without insisting on payment for the increased work.  If a change is made that reduces the cost of contract performance, the government is similarly to insist on a reduction in the price.  In each case, the contracting officer should determine that the price adjustment is appropriate for the modification.-

        Consideration for reduced contract requirements may take the form of a contract price reduction or other means commensurate with the reduction  in requirements.  A single contract modification or change order may be used to modify all relevant contracts if the same change is simultaneously being make to more than one contract, such as when changes are being made on a plant-wide basis.  The single modification must cite each affected contract, and the price adjustment to each contract.

        Please ensure your contracting officers are aware of these basic contracting principals.


                                             Eleanor R. Spector
                          ***                  Director, Defense Procurement

ITEM C-2.1, 
        Current AFACs Affecting the FAR, DFARS, and AFFARS
        as of AFAC 92-49 



        AFAC 92-49      Aug 22, 1995    C-2.1

        Current AFACs, as of AFAC 92-49

 The following interim policy direction has been provided through  AFACs and should be posted as indicated:




Cite

FAR 03.804&
52.203-11


Subject

Limitation on Payment of Funds to Influence Federal Transactions, FAR Subpart 3.8;(DDP Memo, 8 May 90:D.L. 90-007)


Posting/Marking

Insert SAF/AQC message after Subpart 3.8.


AFAC

90-04 D1


Effective

From 8 May 90 until the change is published in a FAC.




 


FAR 04.402;
04.403;
04.404;
27.207-1(b)
& 52.204-2


Class Deviation - National industrial Security Program Operating Manual (NISPOM) (DDP Memo 12 May 95; DAR Tracking number 95-O004)


File AFAC page D1 with the AFACs. 
Insert AFAC pages as follows:
(i)Page D-1.1/ D-1.2 between FAR pages 4-2 and 4-3.
(ii)Page D-1.3 facing FAR page 27-5; and
(iii)Page D-1.4 facing FAR page 52-14.
Annotate "Defiation AFAC 92-48, D1" in the margin at each of the following locations:
(i)page 4-2 at 4.402 and 4.403;
(ii)Page 4-3 at 4.404;
(iii)Page 27-5 at 27.207-1(b) and(iv)Page 52-14 at 52.204-2.


92-48 D1


From 12 May 95 until 31 May 96, or until the FAR is revised, whichever event occurs first.
    




















FAR 10.011 &
52.210-2


Class Deviation: Request copies of Specifications
standards and Descriptions (DDP Memo 18 June 90)


Insert page 10-4A facing page 10-5 & pages 52-24A & B facing page 52-24.


92-25D2


From 18 Jun 90 until the change is published in a FAC.
AFAC 92-49 August 22, 1995 C-3.1





Cite

FAR 19.10


Subject

Reestablishment of Small Business Set-Asides Under the Small Business Competitive-ness Demonstration Program (Joint OSD/SADBU & DDP Memo, 18 Jun 91)


Posting/Marking

Insert SAF/ACQ message after FAR Subpart 19.10.


AFAC

91-21 D1


Effective

From 1 July 91, until the direction in the joint memo is rescinded







FAR 19.10


Reestablish-ment of Small Business Set-asides and raising the Emerging Small Business Reserve Under the Small Business Com-petitiveness Demonstration Program (Joint OSDS/SADBU & DDP Memo, 30 Sep 91.


Insert SAF/AQC message after AFAC 91-21, D1


91-29 D1


From 15 Oct 91, until the direction in the joint memo is rescinded









FAR 22.1012-3


Service Contract Act Section 4(c) Collective Bargaining Agreements with Contin-gency clauses
(SAF/AQC Memo, 7 Apr 92)


Insert Pages E-1 thru E-6 after the FAR page containing 22.1012-3.


92-07 E1


From 7 Apr 92 until the change is published in a FAC.





Cite

FAR 22.1012-3


Subject

Inclusion of Collective Bargaining Agreement Terms in Options under Section 4(c) of the Ser-vice Contract Act (SAF/AQC Memo, 11 May 92)


Posting/Marking 

Insert After AFAC 92-07 page E-6.


AFAC

92-09 E1


Effective

From 11 May 92 until the change is published in a FAC.







FAR 42.704(d);
42.705;
42.708(a);
52.216-7;
52.216-8;
52.216-9;
52.216-10;
52.210-13; and
52.216-13, AmmendmentI.


Class Deviation- Interim Payments and Contract Close-Out (DDP Memo 13 Jul 95; DAR tracking No. 95-O0003)


File AFAC Pages D-1 and D-1.1 through D-1.5 with the AFACs
Annotate AFAC 92-49 D1 in the margain at each of the following locations in the FAR:
(i)Page 42-9 after 42.704(d) and at 42.705;
(ii)Page 42-12 at 42.708(a);
(iii)Page 52-58 at 52.216-7;
(iv)Page 52-59 at 52-216-8;
(v)Page 52-60 at 52.216-9 and 52.216-10;
(vi)Page 52-62 at 52.216-13; and (vii)Page 52-63 at 52.216-13, AlternateI.


92-49 D1


From 13 Jul 95 or until the FAR is changed, whichever occurs first. Contracting Officers should implement these proceedures immediat-ly in all Contracts
It is not necessary to modify existing contracts because existing FAR caluses provide latitude for the use of these procedures.


Cite

FAR 45.101;
45.504(b);
45.505(g);
45.505-1(a);
45.505-1(b);
45.508;
52.245-2,
AlternateI
52.245-2 AlternateII 
52.245-5; &
52.245-8.


Subject

Class Deviation from Federal Acquisition Regulation (FAR) Part 45. (DDP Memo 14 Jul 95; DAR Tracking Nr. 95-O0001)


Posting/Marking

File AFAC pages D-2 and D-2.1 through D-2.4 with the AFACs.
Annotate "AFAC 92-49, D2" in the margin at each of the following locations in the FAR:
(i)Page 45-1 at 45.101;
(ii)Page 45-13 at 45.504(b), 45.505(g), and 45.505-1(a) and below 45.505-1(b);
(iii)Page 45-18 at 45.508;
(iv)Page 52-213 at 52.245-2, Alternate I;
(v)Page 52-214 at 52.245-2 Alternate II;
(vi)Page 52-217 at 52.245-5 &
(vii)Page 52-224 at 52.245-8.


AFAC

92-49 D2


Effective

Through 14 Jul 97, or until FAR Part 45 is revised to include these provisions, whichever occurs first.


















Cite

FAR 45.306-5
52.245-2; &
52.245-17


Extension to Class Devia-tion - Spec-ial Tooling (DDP Memo 14 Oct 93).


File AFAC page D-1 with the AFACs.
(i)Remove AFAC 92-22 page 45-6A, which is currently posted in front of FAR page 45-7;
(ii)Insert AFAC 92-34 page D-1.1 facing FAR page 45-7;
(iii)Remove AFAC 92-22 pages 52-232A through 52-232C, which are currently posted in front of FAR page 52-233; and
(iv)Insert AFAC 92-34 pages D-1.2, D-1.3 and D-1.4 facing FAR page 52.233.
Line through the annotation "AFAC 92-22 D1" in the margins at FAR 45.305; 45.306-5; 45.245-2; and 52.245-17 and annotate "Extended by AFAC 92-34 D1".


92-34 D1


Expires 16 Oct 95, Pending publica-tion of the change in a FAC.

note: this item has been further extended. Notice is provided in the next AFAC.














Cite 

FAR 45.306-5
52.245-2 &
52-247-17.


Subject

Extension to Class Deviation - Special Tooling.


Posting/Marking

File AFAC pages D-1 with the AFACs. 
Annotate "Extended by AFAC 92-34,D1 at each of the following locations:
(i)FAR page 45-7 at 45.306-1;
(ii)45-8 at 45.306-5;
(iii)52.211 at 52.245-2; &
(iv)52.233 at 52.247-17.


AFAC

92-43 D1


Effective

Until 16 Oct 95 pending incorpor-ation of the change in a FAC.


Cite

DFARS 204.7101(b)
204.7013-1(a)
204.7103-1(a)(3);
204.7104-1(b);
204.7104-2(e)(5);
204.7104-2(e)(7);
204.7107;
215.401;
217.405;&
243.170.


Subject

Sequence of Progress Pay-ments and Contract Modifications
(DDP Memo, 3 Jul 95; D.L. 95-012)


Posting/Marking

File AFAC pages B-1 abd B-1.1 through B-1.6 with the AFACs.
Annotate "AFAC 92-49 B1"in the margin at each of the following locations in the DFARS:
(i)Page 204.71-1 at 204.7101(b);
(ii)Page 204.71-2 at 204.7103-1(a);
(iii)Page 204.71-3 after 204.7103-1(a)(3)(ii);
(iv)Page 204.71-4 after 204.7104-1(a)(2) and at 204.7104-1(b);
(v)Page 204.71-9 at 204.7104-2(e)(5);
(vi)Page 204.71-10 before 204.7104-2(e)(7) and at 204.7104-2(e)(7) and (8);
(vii)Page 


AFAC

92-49 B1


Effective

From 3 Jul 95 until the DFARS is revised.


Cite


Subject


Posting/Marking
(continued)
204.71-16 at 204.7107;
(viii) Page 215.4-1 after
215.401;
(ix)Page 217.74-3 before 217.
7405; and 
(x)Page 243.1-1 below 243.170.


AFAC


Effective


Cite

DFARS
204.7202-2 &
253.204-70


Subject

Expiration of DAR deviation 92-904-02, Contractor Establishment Code(CEC) (DPP Memo 8 Mar 93)


Posting/Marking

The margins marked and AFAC page B-1 posted after DFARS page 204.72-2.


AFAC

92-25 B1


Effective

Indef-inite until cancelled by an AFAC.


DFARS
206.302-5(b)
207.401;     Table of Contents Part
215 at 215.871;
215.871;
219.602-1;
219.602-3; &
219.602-70;
Table of Contents Part 252 at 252.219-7009; & 
252.219-7009.


Contract Award (DDP Memo 7 Aug 95; D.L. 95-016).


File AFAC pages B-2 and B-2.1 through B-2.3 with the AFACs.
Annotate "AFAC 92-49,B2" in the margin at each of the following locatons in the DFARS:
(i)Page 206.3-2 at 206.302-5(b);
(ii)Page 207.4-1 at 207.401;
(iii)Table of Contents Part 215 at 215.871;
(iv)Page 215.8-15 at 215.871;
(v)Page 219.6-1 at 219.602-1; 219.602-3; and 219.602-70;
(vi)Table of Contents Part 252 at 252.219-7009; and
(vii)Page 252.219-13 at 252.219-7009.


92-49 B2


From 7 Aug 95 until the DFARS is revised.



























Cite

DFARS
209 the Table of Contents for the part after the reference to 209.406-3, 209.406-3(a) (iii), & the Table of Con-tents for Part 252 at the reference to 252.209-7002.


Subject 

Institutions of higher Education (DDP Memo 6 Mar 95; D.L. 95-007)


Posting/Marking

File AFAC page B-1 with the AFACs.
Insert AFAC pages as follows:
(i)Page B-1.1 behind DFARS page 209.4-5 and (ii)Page B-1.2 facing AFAC 92-43 page B-2.7,
which is currently posted facing page 252.210-1.
Annotate "AFAC 92-46,B1" in the margin at each of the following locations in the DFARS:
(i)Table of Con-tents for part 209 after the reference to 209.406-3;
(ii)Page 209.4-5 below 209.406-3(a)(iii) and 
(iii)The Table of Contents for Part 252 at the reference to 252.209-7002.


AFAC

92-46 B1


Effective

From 6 Mar 95 until the change is published in a DAC.


DFARS
211.70 & 
252.211


Contracting for Commercial Items (DDP Memo 30 Jan 92; D.L. 92-002.


AFAC page 211.70-2 remains inserted facing DFARS page 211.70-2. The remaining AFAC pages (211.70--10,-12,-13,-15,-17 thru -23 & 252.211.70-30.2) should be removed as a result of post-ing DAC 91.8.


92-08 B1


From 31 Dec 91 until the change is issued in a DAC.


Cite

DFARS
219.7001
(b)(4).


Subject

Evaluation Preference for Small Disad-vantaged Bus-iness Concerns
(DDP Memo 22 Aug 95; D.L. 95-017)


Posting/Marking

File AFAC pages B-4 and B-4.1 with the AFACs
Annotate "AFAC 92-49 B4" in the margin on page 219.70-1 of the DFARS after 219.
7001(b)(4).


AFAC

92-49 B4


Effective

From 22 Aug 95 until the DFARS is revised.


DFARS
219.702(a)(i)
(A)&
252.219-7004


Test Program for Negotia-tion of Comp-rehensive Small Business
Subcontracting
Plans (DDP Memo 10 Jul 95; D.L. 95-015)


File AFAC pages B-2 and B-2.1 through B-2.7 with the AFACs.
Annotate "AFAC 92-49 B2" in the margin at each of the following locations in the DFARS:
Page 219.7-1 at 219.702(a)(i)
(A)(1); and
Page 252.219-9 at 252.219-7004.


92-49 B4


From 10 Jul 95 until the DFARS is revised.


DFARS
219.703(a)


Subcontract-ing Plans for Nonprofit Agencies for the Bling or Severly Dis-abled (DDP Memo 27 Feb 95; D.L. 95-004)


File AFAC Page B-2 with the AFACs.
Insert AFAC page B-2.1 facing DFARS page 219.7-1.
Annotate "AFAC 92-46,B2" in the margin on DFARS page 219.7-1 at 219.703(a).


92-46 B2


From 27 Feb 95 until the change is published in the DAC.


Cite

DFARS
223.7101,
223.7102(a)(8)
223.7103, &
252.223-7006(b)
.


Subject

Hazardous Materials (DDP Memo 6 Mar 95; D.L. 95-006)


Posting/Marking

File AFAC page B-3 with the AFACs.
Insert AFAC pages as follows:
(i)Page B-3.1 facing DFARS page 223.71-1;
(ii)Page B-3.2 facing page 223.71-2; and
(iii) Page B-3.3 facing page 252.223-9.
Annotate "AFAC 92-46,B3 in the margin at each of the following locations in the DFARS:
(i)Page 223.71-1 at 223.7101;
(ii)Page 223.71-2 at 223.7102(a)
(8) and 223.7103; and
(iii)Page 252.223-9 at 252.223-7006(b).


AFAC

92-46 B3


Effective

From 6 Mar 95 until the change is published in the DAC.











DFARS
225.000


Class Devi-ation - Cont-racting with North Atlantic Treaty Organ-ization (NATO) and Non-NATO Countries (DDP Memo 20 Jan 95; DAR Track-ing Number 94-O0001)


File AFAC pages B-6 and B-6.1 with the AFACS.
Annotate "Dev-iation AFAC 92-45 B6" in the margin of DFARS  Page 225.0-1 at 225.000.


92-45 B6


From 31 Jan 96, until the change is published in a DAC.


Cite

DFARS
225.102(a)(3)


Subject

Determination of Public Interest Under Act(DDP Memo,
3 Jul 95; D.L. 95-011)


Posting/Marking

File AFAC pages 
B-3 and B-3.1 with the AFACs.
Annotate "AFAC 92-49,B3" in the margin on page 225.1-1 of the DFARS at 225.102(a)(3).


AFAC

92-49 B5


Effective

From 3 Jul 95 until the DFARS is revised.


DFARS
225.7022-2&
252.225-7011


Supercomputers
(DDP Mmeo 3 Jul 95; D.L. 95-013)


File AFAC pages B-4 and B-4.1 with the AFACs.
Annotate "AFAC 92-49 in the margin at each of the follow-ing locations in the DFARS:
(i)Page 225.70-20 below 225.7022-2; and
(ii)Page 252.225-15 at 252.225-7011.


92-49 B6


From 3 Jul 95 until the DFARS is revised.


DFARS
246.101;
246.102(4);
246.202-3;
246.204(1)&
246.704(4).


Contract Quality Req-uirements(DDP Memo 13 Jul 95;D.L.95-010)


File AFAC Pages B-5 and B-5.1 through B-5.3 with the AFACs.


92-49 B7


From 13 Jun 95  until the DFARS is revised.


Cite

DFARS
253.204-70(b)(13)(iv);
253.204-70(b)(13)(ix);
253.204-70(c)(4)(iii)
(A)(5);
253.204-70(c)
(4)(viii)(A);
253.204-70(d)
(5)(iv)(A)(2);
253.204-70(d)
(5)(iv)(A)(7);
&,
253.204-71(e)
(2)(i)(A)(3).


Subject

Contract Data Reporting (DDP Memo 6 July 95;D.L.95-014)


Posting/Marking

File AFAC pages B-6 and B-6.1 through B-6.6 with the AFACs.
Annotate "AFAC 92-49 B6" in the margin at each of the following locations in the DFARS:
(i)Page 253.204-8 at 253.204-70
(b)(13)(iv);
(ii)Page 253.204-9 at 253.204-70(b)
(13)(ix);
(iii)Page 253.
204-12 below 253.204-70(c)
(4)(iii)(A)(5);
(iv)Page 253.201-15 at 253.204-70(c)
(4)(viii);
(v)Page 253.2
04-23 at 253.
204-70(d)(5)
(iv)(A)(2);
(vi)Page 253.
204-70(d)(5)
(iv)(A)(7);
and,
(vii)Page 253
.204-36 at 253
.204-71(e)(2)(i)
(A)(3).


AFAC

92-49 B8


Effective

From 6 Jul 95 until the DFARS is revised.


AFFARS
5306.3


Class Justif-ication and Approvals (SAF/AQC Memo, 23 Feb 88)


Insert AFAC pages E-2 thru E-6 in front of Subpart 5306.3.


88-05 E1


Indefin-ite, pending formal AFFARS change.


Cite

AFFARS
5315.10


Subject

Air Force Debriefing Policy (SAF/
ACQ Letter, 22 Nov, 93)


Posting/Marking

Insert AFAC pages E-1, E-1.1
and E-1.2 facing AFFARS page 15-12.
Annotate "Subpart 5315.10
--Preward, Award, and Post-award Notifica-tions, Protests, and Mistakes added under AFAC 92-34,E1" at the following locations:
(i)The table of contents for AFARS Part 5315, page 15-ii fol-lowing the last entry under Sub-part 15.9; and,
(ii) Following the last line of text under 5315.
975(a), page 15-12.


AFAC

92-34 E1


Effective

Indefin-ite, pending formal AFFARS change.


AFFARS
5316


Use of Appro-priate Cont-ract Type in R&D Contracts
(SAF/AQC Memo 21 Jan 92)


Insert AFAC pages E-5 thru E-10 in front of AFFARS page 16-1.
Mark "AFAC 92-04,E1" on page 16-1 in the margin at 5316.203.


92-04E1


Indefin-ite, pending formal AFAC change.


AFFARS
5317.1


Multiyear Contracting (MYC) Policy Guidance (SAF/
AQC Memo, 12 
Mar 88.


Insert AFAC pages E-1 thru E-10 behing AFFARS subpart
5317.1
Mark "AFAC 88-07,E1" in the margin at 5317.1.


88-07 E1


Indefin-ite, pending formal AFAC change.


Cite

AFARS
5317.5


Subject

Revised Int-erim Air Force
Policy on Economy Act Purchases (SAF/AQC Memo 17 May 94)


Posting/Marking

File AFAC pages E-1 and E-1.1 through E-1.5 with the AFACs.
Remove AFAC 92-37 E1 pages E-1.1 through E-1.5, which are posted facing AFFARS page 17-2 and insert AFAC 92-40 pages E-1.6 through E-1.13 facing AFARS page 17-2.
Line through AFAC 92-37,E1" and mark "Rep-laced by AFAC 92-40,E1" at the heading for Sub-part 5317.5, Interagency Acquisitions Under the Econ-omy Act, on AFFARS page 17-2.


AFAC

92-40,E1


Effective

Remains in effect until canceled or super-ceded by permanent AFARS coverage.


AFFARS
5317.91


Interim Air Force Policy on Contract-ing for Long Lead Items Initated with Advanced Pro-curment Funds (SAF/AQC Letter 9 Apr 93)


Insert AFAC pages E-1 thru E-9 facing AFFARS page 17-4
Insert a copy of AFAC page E-8 facing AFFARS page 52-1.
Mark the margins as follows:
(i)On AFFARS page 17i, under-neath the last entry for Sub-part 5317.90, write in: "subpart 5317.91  --contracting for Long Lead Items Initiated with Advanced Procurment Funds
added by AFAC2-26,E1;
(ii) On AFFARS page 17-4, after the last line of 5317.9000, write in: "Subpart 5317.91 added by AFAC 92-26,E1"


92-26,E1


Indefin-ite, pending formal AFARS change.
 
























AFARS
5337.1


Administration of Other Than Base Level Service Cont-racts (SAF/
AQC Memo, 29 Aug 88)


Insert AFAC page E-3 in front of AFFARS page      37-1.


92-0 4E1


Indefin-ite, Pending formal AFFARS change.


AFFARS 
General


Procedures for Distribution of Contracting Policy Memos (SAF/AQC Memo,
25 Feb 92)


Post with AFACs


92-04 E1


Indefin-ite, until cancelled by an AFAC.


Cite

None,
Info Only


Subject

Obligatin of Funds at Fiscal Year End (SAF/AQC Letter, 12 Jul 93.


Posting/Marking

File AFAC page C-1 with the AFACs.


AFAC

92-32 C1


Effective

The memo was dis-tributed through the MAJCOMS, and is provided here for informat-ion.


None, 
Info Only


Interagency Acquisition Under the Economy Act (ASAF/A Memo 10 Mar 93) and Limitations on the Use of Project Orders (SAF/AQC Letter, 2 Aug 93.


File AFAC pages C-2 and C-2.1 with the AFACs.


92-34 C2


The two memos were dis-tributed through the MAJCOMS, and are provided here for informat-ion.


None,
Info Only


Ozone Deplet-ing Substances
(ODS)(SAF/AQC Letter, 8 Nov, 93.


File AFAC pages C-2 and C-2.1 with the AFACs.


92-34 C2


The memo was dis-tributed through the MAJCOMS, FOAs and DRUs.


None, 
Info Only


Use of Data Bases in Con-tractor Past Performance Evaluations
(DDP Memo 26 Nov 93)


File AFAC pages C-1 with the AFACs.


92-35 C1


Provided here for informat-ion only.


Cite

None, 
Info Only


Subject

GAO Report No. 94-7 "Contract Pricing: DoD's Use of the Truth in Nego-tiations Act Deterrents could be Increased" dated 25 Oct 93.(GAO Code 396303), OSD
Case 9371, and DoDIG draft Followup Review of Recovery of Funds Due the Government as a Result of Contract Debts (DDP Memo, 18 Feb 94)


Posting/Marking

File AFAC page C-1 with the AFACs.


AFAC

92-37 C1


Effective

An Infor-mational AFAC item.


None,
Info Only


DD Form 350 Coding for Block C3, Extent Comp-eted, for Awards to Non-profit Insti-tutions (SAF/
AQC Memo 26 Jan 95)


File AFAC pages C-1 and C-1.1 with the AFACs.


92-45 C1


An Infor-mational AFAC item.


None, 
Info Only


Contract Debt Collection.(DDP Memo 13 Jan 95)


File AFAC pages C-2 and C-2.1 thru C-2.3 with the AFACs.


92-45 C2


An Infor-mational AFAC item.


None,
Info Only


Accounting for Impairment of Long-Lived Assets (DDP 



 


File AFAC pages C-3 abd C-3.1 with the AFACs.


92-45 C3


An Infor-mational AFAC item.


Cite

None,
Info Only


Subject

Implement-ation of
the National Industrial Security Prog-ram Operating Manual(NISPOM)
(SAF/AA Memo, 17 May 95)


Posting/Marking

File AFAC pages C-1 thru C-1.3 with the AFACs.


AFAC

92-48 C1


Effective

An Infor-mational AFAC item.  





 


None,
Info Only


Consideration for Changing Contract Requirements (DDP Memo 11 Aug 95)


File AFAC pages C-1 and C1.1 with the AFACs.


92-49 C1


An Infor-mational AFAC item.


     


None, 
Info Only


Current AFACs


File Pages C-2.1 thru C-2.14 with the AFACs.


92-49 C2


An Infor-mational AFAC item.


None, 
Info Only


Cancelled, Superceeded or Expired AFACs


File pages C-3.1 thru C-3.2 with the AFACs.


92-49 C3


An Infor-mational AFAC item.     


 


AFAC 92-49                    AUGUST 22, 1995                   C-3.1


         Cancelled, Superseded or Expired AFACs
        Since AFAC 92-39, 11 May 1994
 The AFAC items listed below have been cancelled, superseded or expired as indicated.  Please ensure that obsolete postings are removed and that the margin markings in your FAR, DFARS and AFFARS are annotated as appropriate.

AFAC            Subject

92-22 B1        DDP Memo Oct 5, 1992, Pilot Mentor-Protege Program, D.L. 92-010

92-25 B2        Industrial Modernization Incentives Program (IMIP)(DDP Memo 8 Feb 1994)
 
92-25 D1        Class Deviation: BPA Invoicing for Food Products (DDP Memo, 12 Feb 93)

92-29 B1        Elimination of Ozone-Depleting Substances (DDP Memo 21 May 93; D.L. 93-005)

92-29 E1        Interim Air Force Contracting Policy for Elimination of Class I Ozone Depleting Substances (SAF/AQC Letter 26 May 1993)

92-30 D1        Class Deviation: Document Retention (DDP Memo, 12 Apr 93)

92-30 D2        Class Deviation: Contractor Use of Government Supply Sources

92-32 B1        Incremental Funding of Fixed-Price Contracts (DDP Memo, Aug 23, 1993; D.L. 93-008)

92-32 B2  Notification of Proposed Program Termination or Reduction (DDP Memo Aug 9, 1993; 93-007)

92-34 B1        Revised Progress Payment Rates (DDP Memo, 18 Nov 1993; D.L. 93-009)

92-35 B1        North American Free Trade Agreement Implementation Act (DDP Memo, 23 Dec 1993; D.L. 93-010)

92-37 B1  Carbonyl Iron Powders (DDP Memo, 14 Feb, 1994;D.L. 94-001)

92-37 B2  Reflagging or Repair Work (DPP Memo, 25 Feb 1994; D.L. 94-002)

92-37 B3  Aircraft Fuel Cells (DDP Memo, 7 Mar 94; D.L. 94-330)

92-37 B4  Preference for Local Small Business (DDP Memo, 8 Mar 1994; D.L. 94-004)

92-37 D1        Class Deviation, Standard Form (SF) 18 (DDP Memo, 8Feb 1994)

93-37 E1        Interim Air Force Policy On Economy Act Purchases (SAF/ACQ Memo, 31 Jan 1994)

92-38 E1        Authority to Release O&M Facility Construction Project Solicitations for Bid/Proposal without specific Funding Authority (SAF/AQC       Message 111200Z May 94)

92-39 C1        Current AFACs and Cancelled, Superseded or Expired AFACs

92-40 B1        Indian Tribal or Alaska Native Corporation (DDP Memo, 3 May 1994; D.L. 94-009)

92-40 B2        Indirect Costs of Institutions of Higher Education (DDP Memo, 5May 1994; D.L. 94-010)


92-40 C1        Cost or Pricing Data (SAF/AQC Memo, 10 Jun 1994)

92-40 C2        AFAC Items Canceled and Superseded Due to Issuance of DAC 91-6

92-40 D1        Class Deviation - Document Retention (DDP Memo, 13 Apr 1994)

92-42 B1        Services at Installation Being Closed (DDP Memo, 8 July 1994; D.L. 94-011)

94-42 D1        Class Deviation - Subcontracts (Fixed-Price Contracts) Clause (DDP Memo, 29 Jun 1994)

92-43 B1  Award to Foreign Controlled Contractors (DDP Memo, 29 Sep 1994, D.L. 94-013

92-43 B2        Terrorist Countries (DDP Memo, 29 Sep 1994; D.L. 94-014)

92-43 B3        Small Purchases in Support of Contingency Operations DDP Memo, 29 Sep 1994; D.L. 94-015)

92-43 B4        Offset Administrative Costs (DDP Memo, 28 Sep 1994; D.L. 94-012)

92-43 B5        Test of Streamlined Research and Development (R&D) Contracting Procedures (DDP Memo, 4 Oct 1994; D.L. 94-017)
        
92-43 B6        Predetermined Indirect Cost Rates (DDP Memo, 10 Oct 1994; D.L. 94-018)

92-43 B7        Best Value - Stevedoring (DDP Memo, 29 Sep 1994; D.L. 94-016)

92-45 B1        Preference for Local Residents (DDP Memo, 26 Jan 1995; D.L. 95-003)

92-45 B2        Limitation on Allowable Individual Compensation (DDP Memo, 14 Dec, 1994)

92-45 B3        Restructuring Costs Under Defense Contracts (DDP Memo, 29 Dec 1994; D.L. 94-020)

92-45 B4        Manufacturing Science and Technology Program (DDP Memo, 17 Jan 1995; D.L. 95-002)

92-45 B5        Personal Services Contracts (DDP Memo, 5 Jan 1995; D.L. 95-001)

92-46 B4        Restriction on Procurement of Goods (DDP Memo, 10 Apr 1995, D.L. 95-009)

92-46 B5        Federally Funded Research and Development Centers (FFRDCs) (DDP Memo, 3 Mar 1995; D.L. 95-005)


ITEM D-1,  OSD LETTER DATED 13 JULY 1995
                DAR TRACKING # 95-00003

SUBJECT: Class Deviation - Interim Payments and Contract Close-out.

        Effective immediately, all military departments and defense agencies shall use the attached text and clauses which provide for increased use of quick contract closeout procedures and interim payments to contractors under certain circumstances. Implement these procedures immediately in all contracts. It is not necessary to modify existing contracts because existing FAR clauses provide sufficient latitude for the use of these procedures.

        FAR 42.704 is amended to permit, with certain restrictions, contractor use of billing rates contained in certified final indirect cost rate proposals.  The FAR 42.708(a)(i) threshold for total unsettled indirect cost allocable to any one contract is raised from $500,000 to $1 million.  The FAR 42.708(a)(ii) is revised to permit waiver of the 15 percent restriction on contracting officer rate settlement based upon a risk assessment. The clauses at 52.216-7 and
-13 are revised to establish a timeframe for contractor submission of final vouchers. The clauses at 52.216-8, -9, and -10 are revised to require release of 75 percent of all fee withholds under physically completed cost-type contracts, and to permit release of 90 percent of all withholds in certain circumstances. 

        This class deviation is approved for a period of 1 year or until the FAR is changed, whichever comes first.


                Eleanor R. Spector
                Director, Defense Procurement   


Text is changed as follows:

42.704  Billing rates.

(a)-(d) * * * *

  (e) When the contractor provides to the cognizant contracting officer the certified final indirect cost rate proposal in accordance with 42.705-1(b) or 42.705-2(b), the contractor may bill the proposed indirect cost rates (adjusted for any historical disallowed amounts found in prior years' final indirect cost rate proposals)  until the proposal has been audited and settled.

        * * * *

{42.705}  Final indirect cost rates.
        (a)     Final indirect cost rates shall be established on the basis of    (1)contracting officer determination procedure (see 42.705-1) or
   (2)auditor determination procedure (see 42.705-2).
  (b) Within 120 days after settlement of the final indirect cost rates, the contractor shall submit a completion invoice or voucher reflecting the settled amounts end rates on all contracts physically completed in the year covered by the proposal.

        * * * *

{42.708}  Quick-closeout procedure.
        (a) The contracting officer responsible for contract closeout shall negotiate the settlement of indirect costs for a specific contract, in advance of the determination of final indirect cost rates, if--
                (1) The contract is physically complete; 
                (2) The amount of unsettled indirect cost to be allocated to the contract is relatively insignificant.  Indirect cost amounts will be considered insignificant when--
                (i)  The total unsettled indirect cost to be allocated to any one contract does not exceed $1,000,000.00; 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 risk assessment that considers contractor's accounting, estimating, and purchasing systems; other concerns of the cognizant contract auditors; and any other pertinent information; and 
        
        * * * *




{52.216-7} Allowable Cost and Payment.
        As prescribed in 16.307(a), insert the following clause:  
        ALLOWABLE COST AND PAYMENT (JUL 1995)
        * * * *

                (d) Final indirect cost rates.

                (1) - (3) * * * *

                (4) Within 120 days after settlement of the final indirect cost rates covering the year in which this contract is physically complete, the Contractor shall submit a completion invoice or voucher to reflect the settled Amounts and rates.
                (5) Failure by the parties to agree on a final annual indirect cost rate shall be a dispute within the meaning of the Disputes clause. 

        * * * *

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

        * * * *

        (h) Final payment.  Upon approval of a completion invoice or voucher submitted by the contractor in accordance with (d)(a), and upon the Contractor's compliance with all terms of this contract, the Government shall promptly pay any balance of allowable costs and that part of the fee (if any) not previously paid. 

        * * * *

52.216-8 Fixed Fee

        * * * *

        FIXED FEE (JUL 1995)

        * * * *

        (B) * * *  The Contracting Officer shall release 75 percent of all fee withholds under this contract after receipt of the certified final indirect cost rate proposal covering the year  of physical completion of this contract, provided the contractor has satisfied all other contract terms and conditions, including the submission of the final patent and royalty reports, and is not delinquent in submitting final vouchers on prior years' settlements. The Contracting Officer may release up to 90 percent of the fee withhold under this contract based on the Contractor's past performance related to the submission and settlement of final indirect cost rate proposals

        * * * *

52.216-9  Fixed Fee - Construction
        * * * *

        FIXED FEE - CONSTRUCTION (JULY 1995)

        * * * *

        (c)* * *  The Contracting Officer shall release 75 percent of all fee withholds under this contract after receipt of the certified final indirect cost rate proposal covering the year  of physical completion of this contract, provided the contractor has satisfied all other contract terms and conditions, including the submission of the final patent and royalty reports, and is not delinquent in submitting final vouchers on prior years' settlements. The Contracting Officer may release up to 90 percent of the fee withhold under this contract based on the Contractor's past performance related to the submission and settlement of final indirect cost rate proposals

        * * * *

52.216-13  Allowable Cost and Payment-Facilities

        * * * *


        ALLOWABLE COST AND PAYMENT - FACILITIES (JUL 1995)

        * * * *

        (C) * * * *
                (3) * * * *
 
                (4) Within 120 days after settlement of the final indirect cost rate covering the year in which this contract is physically complete, the Contractor shall submit a completion invoice or voucher to reflect the settled amounts and rates.
                (5) Failure by the parties to agree on a final annual indirect cost rate shall be a dispute within the meaning of the Disputes clause.

        * * * *

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

        * * * *

        Alternate I (JUL 1995).

        * * * *

        (h) Final Payment.
        (1)(sic)  Upon approval of a completion invoice or voucher submitted by the contractor in accordance with (c)(4), and upon the Contractor's compliance with all terms of this contract, the Government shall promptly pay any balance of allowable costs not previously paid. 

        * * * *


ITEM D-2  OSD LETTER DATED 14 JUL 1995
                DAR TRACKING NUMBER 95-00001

SUBJECT: Class Deviation from Federal Acquisition Regulation part
         (FAR) Part 45 

        The Department of Defense is sponsoring an initiative to rewrite FAR Part 45, Government Property, to make it easier to understand and to minimize the burdens imposed on contractors and the Government.  As an interim step, I authorize the military departments and defense agencies to deviate from certain requirements in FAR Part 45. This class deviation reduces the current property recordkeeping and periodic physical inventory requirements for low value property, which is defined as Special Tooling, Special Test Equipment, and Plant Equipment with an acquisition cost of $1500 or less, and permits contractors to defer reporting the loss, damage or destruction of low value property until contract termination or completion.

        This Class deviation is mandatory for all solicitations issued subsequent to receipt of this memorandum except solicitations for service contracts to be performed at military installations. For the excepted solicitations, the deviation may be used at the contracting officer's discretion.  Contracting officers may modify existing contracts to include those provisions only if adequate consideration is obtained.

        This class deviation is authorized through July 14, 1997 or until FAR Part 45 is revised to include these provisions, whichever occurs first.  This class deviation does not affect special tooling deviation 94-00007



                Eleanor R. Spector
                Director, Defense Procurement 




Revised test is as follows:


45.101  Definitions

        * * * *

        "Low Value Property" as used in this part , means Government property in the classes special tooling, special test equipment, and plant equipment with an acquisition cost of $1500 or less.  Specifically excluded from this definition are agency-peculiar property, material, real property, and sensitive property.

        * * * *

        "Sensitive Property" as used in this part, means Government property for which the theft, loss, or misplacement could be potentially dangerous to the public health or safety, or which must be subject to exceptional physical security, protection, control, maintenance or accountability, including but not limited to hazardous property, precious metals, arms, ammunition, and explosives and classified property.

        * * * *

45.504 Contractor's liability.

    (a) * * * *

        (b) The contractor shall investigate and report to the property administrator all cases of loss, damage, or destruction of Government property in its possession or control as soon as the facts become known or when requested by the property administrator. Loss, damage, or destruction of items of low value property shall be reported upon contract termination, completion, or when needed for continued contract performance.  A report shall also be furnished when completed and accepted products or end items are lost, damaged, or destroyed while in the contractor's possession or control. 

         * * * *

45.505  Records and reports of Government property

        (a)-(f) * * * *

        (g)With the exception of low value property, the contractor's property control system shall contain a system or technique to locate any item of Government property within a reasonable period of time. 

        * * * * 

{45.505-1}  Basic information.
        (a) Unless summary records are used as authorized under paragraph (b) of this section, the contractor's property control records shall provide the following basic information for every item of Government property in the contractor's possession, regardless of value (See paragraph (c) below for exceptions, as well as, other subsections of 45.505 which require additional information for specific categories of Government property): 

        * * * *

        (c)The contractor's property control records for each item of low value property in the contractor's possession shall provide the basic information listed in paragraphs (a)(1) through (a)(7) of this section.  With respect to the location of each item of low value property, the contractor is not required to update changes in location occurring after the establishment of the official Government property record. This exception does not apply to sensitive property as defined in this part.

        * * * *

{45.508}  Physical inventories.
        The contractor shall periodically physically inventory all Government property (except materials issued from stock for  manufacturing, research, design, or other services required by the contract) in its possession or control and shall cause subcontractors to do likewise. With the exception of inventories conducted upon termination or completion, as discussed in 45.508-1, this requirement does not apply to items of low value property.  The contractor, with.....otherwise.
        (b) If the contractor's property control system is disapproved, the contractor shall perform a physical inventory and report all loss, damage, or destruction of Government property prior to reaproval of the property control system.
 
52.245-2  Government Property

        Alternate I (DEV)(JUL 1995).  As prescribed in 45.106(b)(2), substitute the following paragraph (g) for paragraph (g) of the basic clause:
        (g) Limited risk of loss.
        (1)-(5) * * * *
        (6) The contractor shall notify the contracting officer upon loss or destruction of, or damage to, Government property provided under this contract, with the exception of low value property for which loss, damage, or destruction is reported at contract termination, completion, or when needed for continued contract performance. The Contractor shall take all reasonable action to protect the Government property from further damage, separate the damaged and undamaged Government property, put all the affected Government property in the best possible order, and furnish to the Contracting Officer a statement of-- 
* * * *
        Alternate II (DEV)(Jul 1995) As prescribed in 45.106 (b)(3), substitute the following paragraphs (c) and (g) for paragraphs (c) and (g) of the basic clause.

(c) * * * *

(g) Limited Risk of Loss.
        (1)-(5) no change.

        (6) The contractor shall notify the contracting officer upon loss or destruction of, or damage to, Government property provided under this contract, with the exception of low value property for which loss, damage, or destruction is reported at contract termination, completion, or when needed for continued contract performance. The Contractor shall take all reasonable action to protect the Government property from further damage, separate the damaged and undamaged Government property, put all the affected Government property in the best possible order, and furnish to the Contracting Officer a statement of-- 

        (7)-(10) * * * *




{52.245-5}  Government Property (Cost-Reimbursement, Time-and-Material or Labor-Hour Contracts) (DEV)(JUL 1995)

        (a)-(f) * * * *
        (g) Limited risk of loss....
                (1)-(4) * * * *
                (5) The contractor shall notify the contracting officer upon loss or destruction of, or damage to, Government property  provided under this contract, with the exception of low value property for which loss, damage, or destruction is reported at contract termination, completion, or when needed for contract performance.  The Contractor shall take  all reasonable action to protect the Government property from further damage, separate the damaged and undamaged Government property, put all the affected Government property in the best  possible order, and furnish to the Contracting Officer a statement  of-- 
                (6)* * * *

        (End of Clause)

{52.245-8}  Liability for the Facilities. (DEV)(JUL 1995) 
        As prescribed in 45.302-6(b), insert the following clause in solicitations and contracts when a consolidated facilities contract, a facilities acquisition contract, or a facilities use contract is contemplated. 
        LIABILITY FOR THE FACILITIES (DEV)(JUL 1995)
        (a)* * * *
        (g) When there is any loss or destruction of, or damage to, the facilities, with the exception of low value property for which the loss, damage, or destruction is required to be reported at contract termination, completion, or when needed for continued contract performance-- 
        (h)-(k) * * * *

        (End of Clause)