[Federal Register Volume 78, Number 19 (Tuesday, January 29, 2013)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2013-01740]

Vol. 78

Tuesday,

No. 19

January 29, 2013

Part II

Department of Defense

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General Services Administration

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National Aeronautics and Space Administration

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48 CFR Chapter 1

Federal Acquisition Regulations; Final Rules

Federal Register / Vol. 78 , No. 19 / Tuesday, January 29, 2013 / Rules and Regulations

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1

[Docket FAR 2013-0076, Sequence 1]

Federal Acquisition Regulation; Federal Acquisition Circular 2005-65; Introduction

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Summary presentation of final and interim rules.

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SUMMARY: This document summarizes the Federal Acquisition Regulation (FAR) rules agreed to by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) in this Federal Acquisition Circular (FAC) 2005-65. A companion document, the Small Entity Compliance Guide (SECG), follows this FAC. The FAC, including the SECG, is available via the Internet at http://www.regulations.gov.

DATES: For effective dates and comment dates see separate documents, which follow.

FOR FURTHER INFORMATION CONTACT: The analyst whose name appears in the table below in relation to each FAR case. Please cite FAC 2005-65 and the specific FAR case numbers. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755.

List of Rules in FAC 2005-65

Item

Subject

FAR Case

Analyst

I

Prohibition on Contracting with Inverted Domestic Corporations.

2012-013

Jackson

II

Extension of Sunset Date for Protests of Task and Delivery Orders.

2012-007

Lague.

III

Free Trade Agreement—Colombia.

2012-012

Davis.

IV

Unallowability of Costs Associated with Foreign Contractor Excise Tax.

2011-011

Chambers.

V

Technical Amendments.

   

SUPPLEMENTARY INFORMATION: Summaries for each FAR rule follow. For the actual revisions and/or amendments made by these FAR cases, refer to the specific item numbers and subjects set forth in the documents following these item summaries. FAC 2005-65 amends the FAR as specified below:

Item I--Prohibition on Contracting With Inverted Domestic Corporations (FAR Case 2012-013)

This rule adopts as final an interim rule implementing section 738 of Division C of the Consolidated Appropriations Act, 2012 (Pub. L. 112-74), which prohibits the award of contracts using Fiscal Year 2012 appropriated funds to any foreign incorporated entity that is treated as an inverted domestic corporation or to any subsidiary of such an entity. The interim rule extended an existing prohibition that applied to the use of Fiscal Year 2008 through 2010 funds. Contracting officers are prohibited from awarding contracts using appropriated funds to any foreign incorporated entity that is treated as an inverted domestic corporation or to any subsidiary of such entity, unless an exception applies. This rule will not have any significant economic impact on small businesses because this rule only applies to an offeror that is an inverted domestic corporation and wants to do business with the Government. Small business concerns are unlikely to have been incorporated in the United States and then reincorporated in a tax haven.

Item II--Extension of Sunset Date for Protests of Task and Delivery Orders (FAR Case 2012-007)

This final rule amends the FAR to implement section 825 of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 (Pub. L. 111-383) and section 813 of the National Defense Authorization Act for Fiscal Year 2012 (Pub. L. 112-81). These statutes extend the sunset date for protests against awards of task or delivery orders to September 30, 2016. There is no effect on Government automated systems.

Item III--Free Trade Agreement--Colombia (FAR Case 2012-012)

This final rule adopts, with minor change, the interim rule published in the Federal Register at 77 FR 27548 on May 10, 2012, to implement the United States-Colombia Trade Promotion Agreement. This Trade Promotion Agreement is a free trade agreement (FTA) that provides for mutually non-discriminatory treatment of eligible products and services from Colombia.

The Colombia FTA covers acquisition of supplies and services equal to or exceeding $77,494. The threshold for the Colombia FTA is $7,777,000 for construction. The excluded services for the Colombia FTA are the same as for the Bahrain FTA, Dominican Republic-Central American FTA, Chile FTA, NAFTA, Oman FTA, and Peru FTA.

Item IV--Unallowability of Costs Associated With Foreign Contractor Excise Tax (FAR Case 2011-011)

This final rule amends the FAR to implement certain requirements of section 301 of the James Zadroga 9/11 Health and Compensation Act of 2010, which imposes a 2 percent excise tax on certain Federal procurement payments to foreign persons. First, the statute disallows the cost of the 2 percent excise tax on certain foreign procurements as part of a payment, or as part of a cost-based negotiated price. Second, the statute stipulates that no funds are to be disbursed to any foreign contractor in order to reimburse the tax imposed. This rule will have a minimal economic impact on small businesses because the 2 percent excise tax is applied only to foreign persons that receive Federal procurement payments pursuant to a contract with the Government of the United States for the provision of goods or services, if the goods are manufactured or produced in, or the services are performed in, a country that is not a party to an international procurement agreement with the United States.

Item V--Technical Amendments

Editorial changes are made at FAR 1.106, 2.000, and 31.205-6.

Dated: January 23, 2013.

Laura Auletta,

Director, Office of Governmentwide Acquisition Policy, Office of Acquisition Policy, Office of Governmentwide Policy.

[FR Doc. 2013-01740 Filed 1-28-13; 8:45 am]

BILLING CODE 6820-EP-P

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[Federal Register Volume 78, Number 19 (Tuesday, January 29, 2013)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2013-01745]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 9 and 52

[FAC 2005-65; FAR Case 2012-013; Item I; Docket 2012-0013, Sequence 1]

RIN 9000-AM22

Federal Acquisition Regulation; Prohibition on Contracting With Inverted Domestic Corporations

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: DoD, GSA, and NASA are adopting as final, without change, an interim rule amending the Federal Acquisition Regulation (FAR) to implement a section of the Consolidated Appropriations Act, 2012, that prohibits the award of contracts using appropriated funds to any foreign incorporated entity that is treated as an inverted domestic corporation or to any subsidiary of such entity.

DATES: Effective Date: January 29, 2013.

FOR FURTHER INFORMATION CONTACT: Mr. Michael O. Jackson, Procurement Analyst, at 202-208-4949, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-65, FAR Case 2012-013.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published an interim rule in the Federal Register at 77 FR 27547 on May 10, 2012, to implement section 738 of Division C of the Consolidated Appropriations Act, 2012 (Pub. L. 112-74), which was signed on December 23, 2011. The same Governmentwide restrictions are already incorporated in the FAR for funds appropriated in Fiscal Years 2008 through 2010, under FAR case 2008-009, published as an interim rule on July 1, 2009 (74 FR 31561), and as a final rule on May 31, 2011 (76 FR 31410).

An inverted domestic corporation is one that used to be incorporated in the United States, or used to be a partnership in the United States, but now is incorporated in a foreign country, or is a subsidiary whose parent corporation is incorporated in a foreign country. See the definition of inverted domestic corporation at FAR 9.108-1.

Six respondents submitted comments on the interim rule.

II. Discussion and Analysis

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the comments in the development of the final rule. A discussion of the comments is provided as follows:

A. Summary of Significant Changes

There are no changes to the interim rule as a result of the public comments.

B. Analysis of Public Comments

1. Support for the Prohibition

Comment: Almost all respondents strongly supported the intent of the rule, to prohibit the Government from doing business with inverted domestic corporations. Some provided specific comments that the rule should be enforced and continued. Some of the specific reasons provided for support were as follows:

a. Impact on U.S. jobs.

Comment: Several respondents stated that when millions of people in the United States are unemployed or under-employed, corporations that have ``turned their back'' on the United States and probably eliminated at least some of the jobs for American personnel should not receive Government contracts.

Response: The Councils note that the views of these respondents are in accord with the intent of the law and this FAR rule.

b. Companies should not be rewarded for tax avoidance.

Comment: Many respondents stated that companies should not be rewarded for tax avoidance, which enables them to compete unfairly with U.S. companies.

Response: The Councils note that the views of these respondents are in accord with the intent of the law and this FAR rule.

c. One respondent discussed additional costly measures that are required when dealing with inverted domestic corporations: e.g., proxy agreements, authorization from national authorities, additional security measures.

Response: The Councils note that the views of this respondent are in accord with the intent of the law and this FAR rule.

2. Rule Should Be Even More Stringent

Comment: One respondent stated that the FAR rule on inverted domestic corporations is a good beginning, but does not go far enough to have any effect on the issue. The respondent requests that the Government should also stop distributors of the products of inverted domestic corporations from selling such products to the Government, because the manufacturers pay no income tax, and products they make off shore impede manufacturing growth of the United States economy and job creation.

Response: Prior to this FAR case 2012-013, the FAR already implemented restrictions that were contained in the FY 2008 through FY 2010 appropriations act restrictions: a provision at FAR 52.209-2, Prohibition on Contracting with Inverted Domestic Corporations--Representation; and a clause at 52.209-10, Prohibition on Contracting with Inverted Domestic Corporations.

Comparable to the prior appropriations act restrictions, Section 738 of the Consolidated Appropriations Act, 2012 (Pub. L. 112-74), Division C, Title VII, prohibits the use of FY 2012 funds for contracts with any foreign entity which is treated as an inverted domestic corporation under section 835(b) of the Homeland Security Act of 2002. The statute only prohibits Government contracts directly awarded to an inverted domestic corporation. It does not cover contracts to distributors of the products of inverted domestic corporations.

The purpose of the interim rule under this FAR Case 2012-013 was to extend the existing prohibition to solicitations and contracts using FY 2012 funds. It did not propose any changes in interpretation or application of the statutory prohibition. Therefore, application to distributors of the products of inverted domestic corporations is outside the scope of this rule.

3. Relationship to Buy American Statute

Comment: One respondent stated that the Buy American Act of 1933 (now codified at 41 U.S.C. chapter 83) created a precedent to prefer American-made products relative to non-domestically produced ones. Therefore, it is proper for this act to favor domestic firms over foreign firms.

Response: The Councils note that the prohibition in this rule is not against all foreign firms, but only those foreign firms that are inverted domestic corporations.

Comment: One respondent stated that all corporations based outside the United States should be forbidden to receive business from any branch of the U.S. Government.

Response: The Buy American statute promotes purchase of domestic products, but provides certain exceptions that provide necessary balance (such as unreasonable cost or nonavailability of domestic products). In addition, the United States is party to the World Trade Organization Government Procurement Agreement and numerous free trade agreements, which provide the mutual benefit allowing the United States to export more goods and services, in exchange for opening our markets to the goods and services of countries that do not discriminate against the United States in their trade practices.

Comment: One respondent stated a belief that inverted domestic corporations are ``representing themselves as American companies'' and that the U.S. military does not even know that they are receiving ``tools made off shore in the guises of Buy American Act.''

Response: The Government considers inverted domestic corporations to be foreign companies, because they are incorporated outside the United States and do not pay U.S. corporate income taxes. Furthermore, for purposes of the Buy American statute, the key factor is not whether the corporate entity is foreign or domestic, but whether the offered product is a domestic end product: i.e., the product is manufactured in the United States and the majority of the components are also of domestic origin. If the Buy American statute applies to an acquisition, the offeror must certify whether the offered product is a domestic end product. In any solicitation that is predominantly for the acquisition of manufactured end products, the offeror must also indicate whether the place of manufacture of the offered products is in the United States or outside the United States (FAR 52.225-18, Place of Manufacture).

4. Possible Lack of Other Sources

Comment: One respondent, although generally supporting the rule, was concerned about negative impact on DoD and NASA due to lack of possible leeway if there is no domestic firm producing a particular part that can only be obtained from an inverted domestic corporation. Response: FAR 9.108-4 allows for a waiver of the prohibition, if an agency head determines in writing that the waiver is required in the interest of national security, documents the determination, and reports it to Congress.

5. Impact on Small Business

Comment: Several respondents considered that the rule could have an impact on small business, to the extent that a small business might now receive an award that formerly would have been made to an inverted domestic corporation, which would create a positive impact. One respondent expressed the certainty that a myriad of products and services can be re-directed to U.S.-based small businesses.

Another respondent did not disagree with the statement in the interim rule that small businesses would not be impacted by the rule.

Response: With regard to re-direction of awards to small U.S. businesses, the Federal Government already has an active program to set aside awards for small businesses (see FAR subpart 19.5). Generally, acquisitions with a value less than the simplified acquisition threshold are set aside for small businesses, and contracting officers are also required to set aside for small businesses acquisitions that exceed the simplified acquisition threshold, when there is a reasonable expectation that offers will be obtained from at least two responsible small business concerns offering the products of different small business concerns, and award will be made at fair market prices.

This final rule does not directly impact small business, because the rule only extends the existing prohibition on contracting with inverted domestic corporations to acquisitions using FY 2012 funds, and the prohibition relates to foreign entities that are also generally large multinational corporations. The fact that these particular entities are now prohibited from contracting with the Government will not have a significant impact on a substantial number of small entities, because it only removes an insignificant number of competitors and Government awards may still go to either large or small businesses, either domestic or foreign, depending on other applicable statutes and regulations. In some instances, depending on the product to be provided and the extent of competition in that market, there may be a minimal positive impact for some small businesses.

6. Prescription for Use of FAR 52.209-2

Comment: One respondent stated that the interim rule leaves unchanged the text of FAR 9.108-5(a), which states the prescription for use of the provision at FAR 52.209-2. According to the respondent, the prescription conflicts with FAR 4.1202(e), which says not to separately include FAR 52.209-2 in any solicitation that includes the clause at FAR 52.204-7, Central Contractor Registration (CCR).

Response: This comment is outside the scope of this case, which did not address FAR 9.108-5(a). The issue raised is a global issue that affects the prescriptions for all provisions listed at FAR 4.1202(a) through (bb). If the solicitation includes FAR 52.204-7, or the offeror is registered in CCR and has completed the Online Representations and Certifications Application (ORCA) electronically and chooses to rely on the electronic representations and certifications, then paragraph (d) of FAR 52.204-8, Annual Representations and Certifications, applies. FAR 52.204-8, paragraph (d) allows reliance on representation in ORCA, rather than separate inclusion of the representation in the solicitation.

The current convention has been to independently prescribe the clauses in the applicable FAR parts and then override the prescription at FAR 4.1202, if the acquisition contains the clause at FAR 52.204-7 or the offeror meets the other conditions and chooses to make paragraph (d) applicable. If the Councils decide to change this convention, then it should be addressed in a proposed rule that provides a uniform prescription format for all affected provisions, not be done piecemeal for just one provision.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Office of Information and Regulatory Affairs (OIRA) has deemed that this is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993, and that this rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

The Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration certify that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because this rule will only impact an offeror that is an inverted domestic corporation and wants to do business with the Government. It is expected that the number of entities impacted by this rule will be minimal. Small business concerns are unlikely to have been incorporated in the United States and then reincorporated in a tax haven; the major players in these transactions are reportedly the very large multinational corporations. No domestic entities will be directly impacted by this rule. For the definition of ``small business,'' the Regulatory Flexibility Act refers to the Small Business Act, which in turn allows the U.S. Small Business Administration (SBA) Administrator to specify detailed definitions or standards (5 U.S.C. 601(3) and 15 U.S.C. 632(a)). The SBA regulations at 13 CFR 121.105 discuss who is a small business: ``(a)(1) Except for small agricultural cooperatives, a business concern eligible for assistance from SBA as a small business is a business entity organized for profit, with a place of business located in the United States, and which operates primarily within the United States or which makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor.'' Also see the response to the comment at II.B.5. of this preamble. Therefore, a Final Regulatory Flexibility Analysis has not been performed.

V. Paperwork Reduction Act

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 9 and 52

Government Procurement.

Dated: January 23, 2013.

Laura Auletta,

Director, Office of Governmentwide Acquisition Policy, Office of Acquisition Policy, Office of Governmentwide Policy.

Interim Rule Adopted as Final Without Change

Accordingly, the interim rule amending 48 CFR parts 9 and 52, which was published in the Federal Register at 77 FR 27547 on May 10, 2012, is adopted as final without change.

[FR Doc. 2013-01745 Filed 1-28-13; 8:45 am]

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[Federal Register Volume 78, Number 19 (Tuesday, January 29, 2013)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2013-01747]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 16

[FAC 2005-65; FAR Case 2012-007; Item II; Docket 2012-0007, Sequence 1]

RIN 9000-AM26

Federal Acquisition Regulation; Extension of Sunset Date for Protests of Task and Delivery Orders

AGENCIES: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: DoD, GSA, and NASA are adopting as final, without change, an interim rule amending the Federal Acquisition Regulation (FAR) to implement sections of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 and the National Defense Authorization Act for Fiscal Year 2012. These statutes extend the sunset date for protests against the award of task or delivery orders from May 27, 2011 to September 30, 2016.

DATES: Effective Date: January 29, 2013.

FOR FURTHER INFORMATION CONTACT: Ms. Deborah Lague, Procurement Analyst, at 202-694-8149 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-65, FAR Case 2012-007.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA originally published an interim rule in the Federal Register at 76 FR 39238 on July 5, 2011, entitled ``Extension of Sunset Date for Protests of Task and Delivery Orders'' (FAC 2005-53, FAR Case 2011-015). The rule implemented section 825 of the Ike Skelton National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2011 (Pub. L. 111-383, enacted January 7, 2011). The rule extended the sunset date for protests of task and delivery orders valued in excess of $10 million for Title 10 agencies, namely DoD, NASA and the Coast Guard. The rule did not extend the sunset date for Title 41 agencies as there was no comparable change to Title 41 at that time.

Subsequent to the publication of the interim rule under FAR Case 2011-015, section 813 of the NDAA for FY 2012 (Pub. L. 112-81, enacted December 31, 2011) made comparable changes to Title 41 to extend the sunset date for protests against the award of task and delivery orders from May 27, 2011 to September 30, 2016. In order to accomplish the statutory changes for both Title 10 and Title 41, FAR Case 2011-015 was not issued as a final rule and was instead incorporated into an interim rule under FAR Case 2012-007.

DoD, GSA, and NASA published an interim rule in the Federal Register at 77 FR 44062 on July 26, 2012, entitled ``Extension of Sunset Date for Protests of Task and Delivery Orders'' (FAC 2005-60, FAR Case 2012-007). The rule implemented section 825 of the Ike Skelton National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2011 (Pub. L. 111-383, enacted January 7, 2011) and section 813 of the NDAA for FY 2012 (Pub. L. 112-81, enacted December 31, 2011). The rule extended the sunset date for protests of task and delivery orders valued in excess of $10 million from May 27, 2011, to September 30, 2016.

II. Discussion and Analysis

No public comments were received; therefore the Defense Acquisition Regulations Council and the Civilian Agency Acquisition Council are finalizing the interim rule without change.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Office of Information and Regulatory Affairs (OIRA) has deemed that this is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993, and that this rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

The changes may have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act 5 U.S.C. 601, et seq. The Final Regulatory Flexibility Analysis (FRFA) is summarized as follows.

This rule implements section 825 of the NDAA for FY 2011 and section 813 of the NDAA for FY 2012, which extended the sunset date for protests of task and delivery orders valued in excess of $10 million from May 27, 2011, to September 30, 2016.

The authority to file protests against the award of task or delivery orders is relatively new, and there is little data available, as such protests may be filed with the agency or Government Accountability Office (GAO). GAO has exclusive jurisdiction of a protest of an order valued in excess of $10 million. Data on agency-level protests are not compiled outside the agency concerned; therefore estimates are based on the total number of protests filed at the GAO in FYs 2009, 2010, and 2011. Assuming that one-half of all protests are filed with the GAO and the other half are filed with the agency, then the average number of protests filed per fiscal year would be 4,466 (see below):

Fiscal Year 2009 protests to GAO................................ 2,000

Fiscal Year 2010 protests to GAO................................ 2,300

Fiscal Year 2011 protests to GAO................................ 2,400

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6,700

Divided by...................................................... 3

Average annual GAO protests..................................... 2,233

Multiplied by................................................... 2

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Per Fiscal Year; Estimated total number of protests............. 4,466

Protests may be filed against the award of contracts as well as certain task or delivery orders. There are few prohibitions on the grounds for protests against the award of a contract. However, protests against the award of a task or delivery order are limited to (a) a protest on the grounds that the order increases the scope, period, or maximum value of the contract; or (b) a protest of an order valued in excess of $10 million. Therefore, it is reasonable to assume that less than 50 percent of the total number of protests filed is against the award of a task or delivery order. A generous estimate is approximately one-fourth, or 1,117. Likewise, only a percentage of the protests against the award of a task or delivery order are made by small businesses. Even if we assume that percentage to be one-half, then the number of protests filed by small businesses against the award of a task or delivery order is estimated to be 559.

protests of task/delivery orders by small businesses.. 559

% of protests sustained......................................... x .03

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of task/delivery orders protests sustained............ 17

The number 17 represents the number of small business task or delivery order protests sustained in a fiscal year. This number is representative of protests against awards by all Government agencies.

Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.

V. Paperwork Reduction Act

The final rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. Chapter 35).

List of Subjects in 48 CFR Part 16

Government procurement.

Dated: January 23, 2013.

Laura Auletta,

Director, Office of Governmentwide Acquisition Policy, Office of Acquisition Policy, Office of Governmentwide Policy.

Interim Rule Adopted as Final Without Change

Accordingly, the interim rule amending 48 CFR part 16, which was published in the Federal Register at 77 FR 44062 on July 26, 2012, (which incorporated an interim rule published in the Federal Register at 76 FR 39238 on July 5, 2011), is adopted as final without change.

[FR Doc. 2013-01747 Filed 1-28-13; 8:45 am]

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[Federal Register Volume 78, Number 19 (Tuesday, January 29, 2013)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2013-01748]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 25 and 52

[FAC 2005-65; FAR Case 2012-012; Item III; Docket 2012-0012, Sequence 1]

RIN 9000-AM24

Federal Acquisition Regulation; Free Trade Agreement--Colombia

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: DoD, GSA, and NASA have adopted as final, with change, the interim rule amending the Federal Acquisition Regulation (FAR) to implement the United States-Colombia Trade Promotion Agreement. This Trade Promotion Agreement is a free trade agreement (FTA) that provides for mutually non-discriminatory treatment of eligible products and services from Colombia.

DATES: Effective Date: January 29, 2013.

FOR FURTHER INFORMATION CONTACT: Ms. Cecelia L. Davis, Procurement Analyst, at 202-219-0202 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-65, FAR Case 2012-012.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published an interim rule in the Federal Register at 77 FR 27548 on May 10, 2012, to implement the United States-Colombia Trade Promotion Agreement Implementation Act (Pub. L. 112-42) (19 U.S.C. 3805 note). The comment period closed on July 9, 2012. No comments were received on the interim rule.

The interim rule added Colombia to the definition of ``Free Trade Agreement country'' in multiple locations in the FAR.

The Colombia FTA covers acquisition of supplies and services equal to or exceeding $77,494. The threshold for the Colombia FTA is $7,777,000 for construction. The excluded services for the Colombia FTA are the same as for the Bahrain FTA, Dominican Republic--Central American FTA, Chile FTA, NAFTA, Oman FTA, and Peru FTA.

Because the Colombia FTA construction threshold of $7,777,000 is the same as the World Trade Organization (WTO) Government Procurement Agreement (GPA) threshold, no new clause alternates are required for the Buy American Act--Construction Materials under Trade Agreements provision and clause (FAR 52.225-11 and 52.225-12) or the Recovery Act FAR clauses at 52.225-23 and 52.225-24.

The final rule corrects the alphabetical order of the listing of the Colombia Free Trade Agreement in the heading of the fourth column of the table at FAR 25.401(b).

II. Executive Order 12866

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Office of Information and Regulatory Affairs (OIRA) has deemed that this is a significant regulatory action and, therefore, was subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993, and that this rule is not a major rule under 5 U.S.C. 804.

III. Regulatory Flexibility Act

The Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration certify that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. Although the rule now opens up Government procurement to the goods and services of Colombia, DoD, GSA, and NASA do not anticipate any significant economic impact on U.S. small businesses. The Department of Defense only applies the trade agreements to the non-defense items listed at Defense Federal Acquisition Regulation Supplement 225.401-70, and acquisitions that are set aside or provide other form of preference for small businesses are exempt. FAR 19.502-2 states that acquisitions of supplies or services with an anticipated dollar value between $3,000 and $150,000 (with some exceptions) are automatically reserved for small business concerns.

IV. Paperwork Reduction Act

The rule affects the certification and information collection requirements in the provisions at FAR 52.212-3, 52.225-4, 52.225-6, and 52.225-11 currently approved under the Office of Management and Budget Control Numbers 9000-0136, titled: Commercial Item Acquisition; 9000-0130, titled: Buy American Act-Free Trade Agreements-Israeli Trade Act Certificate; 9000-0025, titled: Trade Agreements certificate; and 9000-0141, titled: Buy American-Construction, respectively, in accordance with the Paperwork Reduction Act (44 U.S.C. chapter 35). The impact, however, is negligible because it is just a question of which category offered goods from Colombia would be listed under.

List of Subjects in 48 CFR Parts 25 and 52

Government procurement.

Dated: January 23, 2013.

Laura Auletta,

Director, Office of Governmentwide Acquisition Policy, Office of Acquisition Policy.

Interim Rule Adopted as Final with Change

Accordingly, the interim rule amending 48 CFR parts 25 and 52, which was published in the Federal Register at 77 FR 27548, May 10, 2012, is adopted as final with the following change:

PART 25--FOREIGN ACQUISITION

1. The authority citation for 48 CFR parts 25 and 52 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.

25.401 [Amended]

2. Amend section 25.401, in the table that follows paragraph (b), by removing from the table heading ``Colombia FTA, Chile FTA,'' and adding ``Chile FTA, Colombia FTA,'' in its place.

[FR Doc. 2013-01748 Filed 1-28-13; 8:45 am]

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[Federal Register Volume 78, Number 19 (Tuesday, January 29, 2013)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2013-01750]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 31 and 52

[FAC 2005-65; FAR Case 2011-011; Item IV; Docket 2011-0011, Sequence 1]

RIN 9000-AM13

Federal Acquisition Regulation; Unallowability of Costs Associated With Foreign Contractor Excise Tax

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to implement certain requirements of section 301 of the James Zadroga 9/11 Health and Compensation Act of 2010, which imposes a 2 percent excise tax on certain Federal procurement payments to foreign persons. The rule disallows the cost associated with the 2 percent excise tax on certain foreign procurements.

DATES: Effective Date: February 28, 2013.

FOR FURTHER INFORMATION CONTACT: Mr. Edward N. Chambers, Procurement Analyst, at 202-501-3221, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-65, FAR Case 2011-011.

SUPPLEMENTARY INFORMATION:

I. Background

The James Zadroga 9/11 Health and Compensation Act of 2010 (Pub. L. 111-347) was signed into law and effective on January 2, 2011. Section 301 of the Act amends the Internal Revenue Code of 1986 by adding a new section 5000C, Imposition of tax on certain foreign procurements (26 U.S.C. 5000C). Section 5000C imposes a 2 percent excise tax on payments made to foreign persons pursuant to Government contracts for the provision of goods or services, if the goods are manufactured or produced in, or the services are performed in, a country that is not a party to an international procurement agreement with the United States. The statute applies to contracts entered into on or after January 2, 2011. The statute does not apply, however, if the imposition of the tax would be inconsistent with any international agreement. The tax is to be collected in a manner similar to other U.S. taxes withheld on payments to foreign persons. Additionally, section 301 stipulates that no funds are to be disbursed to any foreign contractor in order to reimburse the tax imposed (26 U.S.C. 5000C Note).

On February 22, 2012, DoD, GSA, and NASA published a proposed rule in the Federal Register at 77 FR 10461 implementing the prohibition against reimbursement of the 2 percent excise tax, by revising the FAR rules so that the cost of the tax cannot be included as part of a payment, or as part of a cost-based negotiated price.

Regulations under section 5000C will be forthcoming from the Department of the Treasury that will provide specific guidance regarding the application of the tax and the procedures for withholding the tax. Once the Department of the Treasury implements procedures for withholding this 2 percent excise tax, the impact on applicable FAR provisions will be handled in a separate FAR case.

II. Discussion and Analysis

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the comments in the development of the final rule. A discussion of the comments and the changes made to the rule as a result of those comments are provided as follows:

A. Summary of Significant Changes

To comply with the statute, FAR 31.205-41 is amended to inform the Government and contractors that the costs of the 2 percent excise tax are not allowable. FAR 52.229-3, 52.229-4, 52.229-6, and 52.229-7 are amended to provide that the costs for the 2 percent excise tax are not included in either foreign fixed-price contracts with a foreign concern or foreign fixed-price contracts with foreign governments.

Based on a review of the public comments, discussed below, the Councils have concluded that no change to the proposed rule is necessary.

B. Analysis of Public Comments

The Regulatory Secretariat received responses from two respondents to the proposed rule which are discussed below:

1. Intent of the rule.

Comment: One respondent believes the intent of this rule is to encourage countries to sign the World Trade Organization (WTO) Government Procurement Agreement (GPA) and other Free Trade Agreements (FTAs) identified under FAR part 25.

Response: The intent of the FAR rule is to implement requirements in the FAR to disallow the cost of the 2 percent excise tax mandated by the Public Law 111-347. The FAR is the primary document for uniform policies and procedures for acquisition by all executive agencies. FAR part 25 provides policies and procedures applicable to acquisitions that are covered by the trade agreements to which the United States is a party.

2. Implementation of the 2 percent excise tax and withholding procedures.

Comment: Both respondents submitted comments regarding the implementation of the 2 percent excise tax and the Government's intended withholding procedures. These comments included: (a) Turkey is a member of the WTO, but is only an observer of the WTO's GPA. Will the 2 percent excise tax be applied to Turkish contractors?

(b) The rule is considered to be a violation of the trade and investment agreements between Turkey and the U.S.

(c) The rule will impose a tax that will cause certain foreign contractors to withdraw from contracting with the U.S. Government.

(d) The rule should apply to future contracts, not be retroactively applied to already signed contracts.

(e) The rule degrades the U.S. Government's ability to procure qualified contractors to perform in areas of the world, such as Afghanistan.

(f) The rule creates unfair treatment to non-signatories of the WTO GPA and favors WTO GPA signatories and U.S. contractors.

(g) The rule fails to define ``international procurement agreement'' and the respondent believes that it refers only to the WTO GPA and other Free Trade Agreements, as identified in FAR part 25.

(h) The respondent believes that contractors from WTO GPA signatory countries will still be subject to the rule in the event that goods are produced or services rendered in a non-signatory country.

(i) Will the 2 percent excise tax be withheld from payments to subcontractors?

Response: The intent of the rule is to implement the requirements of Public Law 111-347 in the FAR regarding the disallowance of the cost of the 2 percent excise tax. This rule does not determine the extent to which contract payments will be subject to the tax. Regulations under section 5000C will be forthcoming from the Department of the Treasury, which will provide guidance regarding the application of the tax and the procedures for withholding the tax. This rule simply disallows the tax as part of a payment, or as part of a cost-based negotiated price.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Office of Information and Regulatory Affairs (OIRA) has deemed that this is a significant regulatory action and, therefore, was subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993, and that this rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

DoD, GSA, and NASA do not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. because the 2 percent excise tax is applied only to foreign persons that receive payments made pursuant to a contract with the Government of the United States for the provision of goods, if such goods are manufactured or produced in any country which is not a party to an international procurement agreement with the United States, or the provision of services, if such services are provided in any country which is not a party to an international procurement agreement with the United States. ``Foreign person'' means any person (including any individual, partnership, corporation, or other form of association) other than a United States person. Therefore, this rule is expected to have no impact on domestic small business concerns. There are no reporting, recordkeeping, or other compliance requirements for this rule. The approach described in this rule is the most practical and beneficial for both Government and industry.

Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.

V. Paperwork Reduction Act

The final rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 31 and 52

Government procurement.

Dated: January 23, 2013.

Laura Auletta,

Director, Office of Governmentwide Acquisition Policy, Office of Acquisition Policy, Office of Governmentwide Policy.

Therefore, DoD, GSA, and NASA amend 48 CFR parts 31 and 52 as set forth below:

1. The authority citation for 48 CFR parts 31 and 52 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

2. Amend section 31.205-41 by adding paragraph (b)(8) to read as follows:

31.205-41 Taxes.

* * * * *

(b) * * *

(8) Any tax imposed under 26 U.S.C. 5000C.

* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

3. Amend section 52.229-3 by revising the date of the clause and paragraph (b) to read as follows:

52.229-3 Federal, State, and Local Taxes.

* * * * *

Federal, State, and Local Taxes (FEB 2013)

* * * * *

(b)(1) The contract price includes all applicable Federal, State, and local taxes and duties, except as provided in subparagraph (b)(2)(i) of this clause.

(2) Taxes imposed under 26 U.S.C. 5000C may not be--

(i) Included in the contract price; nor

(ii) Reimbursed.

* * * * *

4. Amend section 52.229-4 by revising the date of the clause and paragraph (b) to read as follows:

52.229-4 Federal, State, and Local Taxes (State and Local Adjustments).

* * * * *

Federal, State, and Local Taxes (State and Local Adjustments) (FEB 2013)

* * * * *

(b)(1) Unless otherwise provided in this contract, the contract price includes all applicable Federal, State, and local taxes and duties, except as provided in subparagraph (b)(2)(i) of this clause.

(2) Taxes imposed under 26 U.S.C. 5000C may not be--

(i) Included in the contract price; nor

(ii) Reimbursed.

* * * * *

5. Amend section 52.229-6 by--

a. Revising the date of the clause;

b. Redesignating paragraph (c) as (c)(1); removing from the newly designated paragraph (c)(1) ``States.'' and adding ``States, except as provided in subparagraph (c)(2) of this clause.'' in its place;

c. Adding paragraph (c)(2);

d. Redesignating paragraph (d) as (d)(1); removing from the newly designated paragraph (d)(1) ``The contract price shall'' and adding ``Except as provided in subparagraph (d)(2) of this clause, the contract price shall'' in its place; and

e. Adding paragraph (d)(2).

The revisions and additions read as follows:

52.229-6 Taxes--Foreign Fixed-Price Contracts.

* * * * *

Taxes--Foreign Fixed-Price Contracts (FEB 2013)

* * * * *

(c)(1) * * *

(2) Taxes imposed under 26 U.S.C. 5000C may not be--

(i) Included in the contract price; nor

(ii) Reimbursed.

(d)(1) * * *

(2) The contract price may not be increased to offset taxes imposed under 26 U.S.C. 5000C.

* * * * *

6. Amend section 52.229-7 by--

a. Revising the date of the clause;

b. Redesignating paragraph (b) as paragraph (b)(1); and

c. Adding paragraph (b)(2).

The revision and addition read as follows:

52.229-7 Taxes--Foreign Fixed-Price Contracts with Foreign Governments.

* * * * *

Taxes--Foreign Fixed-Price Contracts With Foreign Governments (FEB 2013)

* * * * *

(b) * * *

(2) Taxes imposed under 26 U.S.C. 5000C may not be included in the contract price.

* * * * *

[FR Doc. 2013-01750 Filed 1-28-13; 8:45 am]

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[Federal Register Volume 78, Number 19 (Tuesday, January 29, 2013)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2013-01751]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 2, and 31

[FAC 2005-65; Item V; Docket 2013-0080; Sequence 1]

Federal Acquisition Regulation; Technical Amendments

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: This document makes amendments to the Federal Acquisition Regulation (FAR) in order to make editorial changes.

DATES: Effective Date: January 29, 2013.

FOR FURTHER INFORMATION CONTACT: The Regulatory Secretariat, 1275 First Street NE., 7th Floor, Washington, DC 20417, 202-501-4755, for information pertaining to status or publication schedules. Please cite FAC 2005-65, Technical Amendments.

SUPPLEMENTARY INFORMATION: In order to update certain elements in 48 CFR parts 1, 2, and 31, this document makes editorial changes to the FAR.

List of Subjects in 48 CFR Parts 1, 2, and 31

Government procurement.

Dated: January 23, 2013.

Laura Auletta,

Director, Office of Governmentwide Acquisition Policy, Office of Acquisition Policy, Office of Governmentwide Policy.

Therefore, DoD, GSA, and NASA amend 48 CFR parts 1, 2, and 31 as set forth below:

1. The authority citation for 48 CFR parts 1, 2, and 31 is revised to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.

PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM

1.106 [Amended]

1. Amend section 1.106 by--

a. Removing from the table following the introductory text, FAR segments ``52.234-1'' and ``34.1'' and their corresponding OMB Control Numbers ``9000-0133'' and ``9000-0132'', respectively; and

b. Adding, in numerical sequence, in the table following the introductory text, FAR segments ``27.2'', ``52.227-2'', ``52.227-6'', and ``52.227-9'' and their corresponding OMB Control Number ``9000-0096''.

PART 2--DEFINITIONS OF WORDS AND TERMS

2.000 [Amended]

2. Amend section 2.000 by removing from the last sentence of paragraph

(b) ``(see the Index for locations)''.

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

31.205-6 [Amended]

3. Amend section 31.205-6 by removing from paragraph

(o)(2)(iii)(A)(2)(i) ``healthcare inflation'' and adding ``health care inflation'' in its place.

[FR Doc. 2013-01751 Filed 1-28-13; 8:45 am]

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[Federal Register Volume 78, Number 19 (Tuesday, January 29, 2013)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2013-01752]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1

[Docket FAR 2013-0078, Sequence 1]

Federal Acquisition Regulation; Federal Acquisition Circular 2005-65; Small Entity Compliance Guide

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Small Entity Compliance Guide.

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SUMMARY: This document is issued under the joint authority of DOD, GSA, and NASA. This Small Entity Compliance Guide has been prepared in accordance with section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996. It consists of a summary of the rule appearing in Federal Acquisition Circular (FAC) 2005-65, which amends the Federal Acquisition Regulation (FAR). An asterisk (*) next to a rule indicates that a regulatory flexibility analysis has been prepared. Interested parties may obtain further information regarding this rule by referring to FAC 2005-65, which precedes this document. These documents are also available via the Internet at http://www.regulations.gov.

DATES: January 29, 2013.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact the analyst whose name appears in the table below. Please cite FAC 2005-65 and the FAR case number. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755.

List of Rules in FAC 2005-65

Item

Subject

FAR Case

Analyst

I

Prohibition on Contracting with Inverted Domestic Corporations.

2012-013

Jackson

II

Extension of Sunset Date for Protests of Task and Delivery Orders.

2012-007

Lague.

III

Free Trade Agreement—Colombia.

2012-012

Davis.

IV

Unallowability of Costs Associated with Foreign Contractor Excise Tax.

2011-011

Chambers.

V

Technical Amendments.

   

SUPPLEMENTARY INFORMATION: Summaries for each FAR rule follow. For the actual revisions and/or amendments made by these FAR cases, refer to the specific item numbers and subjects set forth in the documents following these item summaries. FAC 2005-65 amends the FAR as specified below:

Item I--Prohibition on Contracting With Inverted Domestic Corporations

(FAR Case 2012-013)

This rule adopts as final an interim rule implementing section 738 of Division C of the Consolidated Appropriations Act, 2012 (Pub. L. 112-74), which prohibits the award of contracts using Fiscal Year 2012 appropriated funds to any foreign incorporated entity that is treated as an inverted domestic corporation or to any subsidiary of such an entity. The interim rule extended an existing prohibition that applied to the use of Fiscal Year 2008 through 2010 funds. Contracting officers are prohibited from awarding contracts using appropriated funds to any foreign incorporated entity that is treated as an inverted domestic corporation or to any subsidiary of such entity, unless an exception applies. This rule will not have any significant economic impact on small businesses because this rule only applies to an offeror that is an inverted domestic corporation and wants to do business with the Government. Small business concerns are unlikely to have been incorporated in the United States and then reincorporated in a tax haven.

Item II--Extension of Sunset Date for Protests of Task and Delivery Orders (FAR Case 2012-007)

This final rule amends the FAR to implement section 825 of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 (Pub. L. 111-383) and section 813 of the National Defense Authorization Act for Fiscal Year 2012 (Pub. L. 112-81). These statutes extend the sunset date for protests against awards of task or delivery orders to September 30, 2016. There is no effect on Government automated systems.

Item III--Free Trade Agreement--Colombia (FAR Case 2012-012)

This final rule adopts, with minor change, the interim rule published in the Federal Register at 77 FR 27548 on May 10, 2012, to implement the United States-Colombia Trade Promotion Agreement. This Trade Promotion Agreement is a free trade agreement (FTA) that provides for mutually non-discriminatory treatment of eligible products and services from Colombia.

The Colombia FTA covers acquisition of supplies and services equal to or exceeding $77,494. The threshold for the Colombia FTA is $7,777,000 for construction. The excluded services for the Colombia FTA are the same as for the Bahrain FTA, Dominican Republic-Central American FTA, Chile FTA, NAFTA, Oman FTA, and Peru FTA.

Item IV--Unallowability of Costs Associated With Foreign Contractor Excise Tax (FAR Case 2011-011)

This final rule amends the FAR to implement certain requirements of section 301 of the James Zadroga 9/11 Health and Compensation Act of 2010, which imposes a 2 percent excise tax on certain Federal procurement payments to foreign persons. First, the statute disallows the cost of the 2 percent excise tax on certain foreign procurements as part of a payment, or as part of a cost-based negotiated price. Second, the statute stipulates that no funds are to be disbursed to any foreign contractor in order to reimburse the tax imposed. This rule will have a minimal economic impact on small businesses because the 2 percent excise tax is applied only to foreign persons that receive Federal procurement payments pursuant to a contract with the Government of the United States for the provision of goods or services, if the goods are manufactured or produced in, or the services are performed in, a country that is not a party to an international procurement agreement with the United States.

Item V--Technical Amendments

Editorial changes are made at FAR 1.106, 2.000, and 31.205-6.

Dated: January 23, 2013.

Laura Auletta,

Director, Office of Governmentwide Acquisition Policy, Office of

Acquisition Policy, Office of Governmentwide Policy.

[FR Doc. 2013-01752 Filed 1-28-13; 8:45 am]

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