[Federal Register Volume 78, Number 120 (Friday, June 21, 2013)]

[Rules and Regulations]

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

[FR Doc No: 2013-14603]

Vol. 78

Friday,

No. 120

June 21, 2013

Part II

Department of Defense

General Services Administration

National Aeronautics and Space Administration

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48 CFR Chapter 1

Federal Acquisition Regulation; Rules

Federal Register / Vol. 78 , No. 120 / Friday, June 21, 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 3]

Federal Acquisition Regulation; Federal Acquisition Circular 2005-67; 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) 2005-67. 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 2005-67 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 2005-67

Item

Subject

FAR Case

Analyst

I

Contractors Performing Private Security Functions Outside the United States.

2011-029

Jackson.

II

Contracting Officer's Representative.

2013-004

Jackson.

III

System for Award Management Name Change, Phase 1 Implementation.

2012-033

Glover

IV

Interagency Acquisitions: Compliance by Nondefense Agencies with Defense Procurement Requirements.

2012-010

Corrigan.

V

Terms of Service and Open-Ended Indemnification, and Unenforceability of Unauthorized Obligations (Interim).

2013-005

Petrusek.

VI

Price Analysis Techniques.

2012-018

Chambers.

VII

Contracting with Women-owned Small Business Concerns (Interim).

2013-010

Morgan.

VIII

Deletion of Report to Congress on Foreign-Manufactured Products.

2013-008

Davis.

IX

Free Trade Agreement (FTA)--Panama.

2012-027

Davis.

X

Updated Postretirement Benefit (PRB) References.

2011-019

Chambers.

XI

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 2005-67 amends the FAR as specified below:

Item I--Contractors Performing Private Security Functions Outside the United States (FAR Case 2011-029)

DoD, GSA, and NASA are issuing a final rule amending the FAR to implement Governmentwide requirements contained in section 862 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2008 (Pub. L. 110-181), as amended by section 853 of the NDAA for FY 2009 (Pub. L. 110-417) and sections 831 and 832 of the NDAA for FY 2011 (Pub. L. 111-383). See 10 U.S.C. 2302 Note. These statutes establish minimum processes and requirements for the selection, accountability, training, equipping, and conduct of personnel performing private security functions outside the United States.

Item II--Contracting Officer's Representative (FAR Case 2013-004)

This final rule amends the FAR to improve contract surveillance by clarifying the contracting officer's representative (COR) responsibilities in FAR 1.602-2(d). In addition, a corresponding change is also made at FAR 7.104(e). This case originated from a Department of Defense (DoD) Panel on Contracting Integrity recommendation. The DoD Panel on Contracting Integrity, an internal DoD panel, consists of senior-level DoD officials from across DoD working to review progress made by DoD to eliminate areas of vulnerability of the defense contracting system that allow fraud, waste, and abuse to occur, and recommend changes in law, regulations, and policy to eliminate the areas of vulnerability. In order to improve the contracting environment, this rule provides additional explanation in the FAR to ensure that CORs understand their duties and responsibilities to survey contractor performance. This final rule is not required to be published for public comment because it only involves internal Government procedures regarding the appointment of CORs and the clarification of COR responsibilities, and has neither a significant effect beyond the internal operation procedures of the agency issuing the policy, regulation, procedure or form, nor has a significant cost or administrative impact on contractors or offerors.

Item III--System for Award Management Name Change, Phase 1 Implementation (FAR Case 2012-033)

This final rule amends the FAR by updating references and names to conform to the System for Award Management (SAM) designation. The SAM is a Federal Government owned and operated free Web site that consolidates the capabilities in certain legacy systems that are used by Federal officials in the procurement and awards process. This rule incorporates language that will transition the Central Contractor Registration (CCR) database, the Excluded Parties List System (EPLS), and the Online Representations and Certifications Application (ORCA) to the SAM designation. This final rule also makes a number of minor additional conforming changes, such as updates to definitions.

Item IV--Interagency Acquisitions: Compliance by Nondefense Agencies With Defense Procurement Requirements (FAR Case 2012-010)

This final rule adopts with minor changes an interim rule published in the Federal Register at 77 FR 69720 on November 20, 2012. The interim rule amended the FAR to implement section 801 of Pub. L. 110-181, as amended (10 U.S.C. 2304 Note). Section 801 requires compliance certifications by nondefense agencies that purchase on behalf of the Department of Defense (DoD), and clarifies which DoD laws and regulations apply. The agencies must comply with new FAR subpart 17.7, in addition to complying with FAR subpart 17.5. To provide clarification for small business and contracting officers, existing policy for small business goal credit for assisted acquisitions was added by the interim rule to section FAR 4.603(c).

Item V--Terms of Service and Open-Ended Indemnification, and Unenforceability of Unauthorized Obligations (FAR Case 2013-005) (Interim)

This interim rule amends the FAR to address concerns raised in an opinion from the U.S. Department of Justice Office of Legal Counsel that determined the Anti-Deficiency Act is violated when a Government contracting officer or other employee with the authority to bind the Government agrees, without statutory authorization or other exception, to an open-ended, unrestricted indemnification clause. This rule clarifies for the public that an End User License Agreement (EULA), Terms of Service (TOS), or similar agreement, containing an indemnification provision, is unenforceable and nonbinding against the Government and Government-authorized end-users. The rule contains a new clause that applies to all solicitations and contracts and automatically applies to micro-purchases, including those made with the Governmentwide purchase card.

Item VI--Price Analysis Techniques (FAR Case 2012-018)

This final rule amends the FAR to clarify a reference used in FAR 15.404-1(b)(2)(i). FAR 15.404-1(b)(2) delineates the various price analysis techniques (to ensure a fair and reasonable price) with 15.404-1(b)(2)(i) being the comparison of proposed prices received from multiple offerors in response to a solicitation. The current reference in this section (FAR 15.403-1(c)(1)) was too broad; thus, this final rule changes this reference to 15.403-1(c)(1)(i), which precisely aligns the price analysis technique of comparing proposed prices in 15.404-1(b)(2)(i) with the adequate price competition standard (for exceptions from certified cost or pricing data requirements) of comparing proposed prices from multiple offerors. Small businesses are not impacted by this final rule because this rule merely clarifies the reference, changing it to cite FAR 15.403-1(c)(1)(i) (rather than the more generalized 15.403-1(c)(1)) at 15.404-1(b)(2)(i), which describes the use of the price analysis technique of comparing proposed prices from multiple offerors in order to establish a fair and reasonable price.

Item VII--Contracting With Women-Owned Small Business Concerns (FAR Case 2013-010) (Interim)

This interim rule amends FAR 19.1505 to remove the dollar limitation for set-asides for economically disadvantaged women-owned small business (EDWOSB) concerns or women-owned small business (WOSB) concerns eligible under the Women-owned Small Business (WOSB) Program. This change implements section 1697 of the NDAA for FY 2013, Public Law 112-239, which amended section 8(m) of the Small Business Act (15 U.S.C. 637(m)).

As a result, contracting officers may set aside acquisitions for competition restricted to EDWOSB concerns or WOSB concerns eligible under the WOSB Program at any dollar level above the micro-purchase threshold, provided the other requirements for a set-aside under the WOSB Program are met.

Item VIII--Deletion of Report to Congress on Foreign-Manufactured Products (FAR Case 2013-008)

This final rule amends the FAR to eliminate an obsolete Congressional reporting requirement imposed by the United States Troops Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 (41 U.S.C. 8302(b)(1)).

This Act required these reports to Congress for Fiscal Year 2007 through Fiscal Year 2011 on acquisitions of end products manufactured outside the United States. This report to Congress is no longer required but the collection of the data in Federal Procurement Data System is still required (see FAR 52.225-18, Place of Manufacture). This final rule only affects the internal operating procedures of the Government.

Item IX--Free Trade Agreement (FTA)--Panama (FAR Case 2012-027)

This final rule adopts without change an interim rule published November 20, 2012, which implemented a new Free Trade Agreement with Panama (see the United States--Panama Trade Promotion Agreement Implementation Act (Pub. L. 112-43) (19 U.S.C. 3805 note)).

This Trade Promotion Agreement is a free trade agreement that provides for mutually non-discriminatory treatment of eligible products and services from Panama. This final rule is not expected to have a significant economic impact on a substantial number of small entities.

Item X--Updated Postretirement Benefit (PRB) References (FAR Case 2011-019)

This final rule amends FAR 31.205-6(o)(2)(iii)(A)(1) to remove references to paragraphs 110, 112, and 113 of the now superseded Financial Accounting Standard (FAS) 106, which were deleted in the Financial Accounting Standards Board's (FASB's) Accounting Standards Codification (ASC) of generally accepted accounting principles (GAAP) and replaces them with explicit criteria that are their functional equivalent. The FAR referenced GAAP to provide criteria for determining the allowability of the transition obligation, when converting from pay-as-you-go accounting for postretirement benefits (PRBs) to an accrual method of accounting for the purposes of Government contract cost accounting.

This final rule will have a minimal economic impact on small businesses because it does not change the FAR substantively.

Item XI--Technical Amendments

Editorial changes are made at FAR 8.703, 8.714, 52.204-8, and 52.204-10.

Dated: June 13, 2013.

William Clark,

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

[FR Doc. 2013-14603 Filed 6-20-13; 8:45 am]

BILLING CODE 6820-EP-P

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[Federal Register Volume 78, Number 120 (Friday, June 21, 2013)]

[Rules and Regulations]

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

[FR Doc No: 2013-14610]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 25, and 52

[FAC 2005-67; FAR Case 2011-029; Item I; Docket 2011-0029, Sequence 1]

RIN 9000-AM20

Federal Acquisition Regulation; Contractors Performing Private Security Functions Outside the United States

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 Governmentwide requirements in National Defense Authorization Acts that establish minimum processes and requirements for the selection, accountability, training, equipping, and conduct of personnel performing private security functions outside the United States.

DATES: Effective Date: July 22, 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 2005-67, FAR Case 2011-029.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published a proposed rule in the Federal Register at 77 FR 43039 on July 23, 2012, to implement section 862, as amended, of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2008 (Pub. L. 110-181). Section 862, entitled ``Contractors Performing Private Security Functions in Areas of Combat Operations or other Significant Military Operations,'' was amended by section 853 of the NDAA for FY 2009 (Pub. L. 110-417, enacted October 14, 2008) and sections 831 and 832 of the NDAA for FY 2011 (Pub. L. 111-383, enacted January 7, 2011). See 10 U.S.C. 2302 Note. The statute required (1) the establishment of Governmentwide policies and (2) FAR coverage implementing the Governmentwide policies specified in the statutes and the resulting Governmentwide policy document.

The proposed FAR rule set forth the applicability, pertinent definitions, underlying policy, and a clause to implement minimum processes and requirements for personnel performing private security functions in designated areas outside the United States (i.e., in combat operations, during certain contingency operations, or in an area of other significant military operations as appropriately designated). Four respondents submitted comments on the proposed rule.

II. Determinations

The Federal Acquisition Regulatory (FAR) Council has made the following determinations with respect to the rule's applicability of section 862 of the NDAA for FY 2008 (Pub. L. 110-181), as amended, entitled ``Contractors Performing Private Security Functions in Areas of Combat Operations or other Significant Military Operations,'' to contracts in amounts not greater than the simplified acquisition threshold (SAT), contracts for the acquisition of commercial items, and contracts for the acquisition of commercially available off-the-shelf (COTS) items.

A. Applicability to Contracts at or Below the Simplified Acquisition Threshold

41 U.S.C. 1905 governs the applicability of laws to contracts or subcontracts in amounts not greater than the SAT. It is intended to limit the applicability of laws to acquisitions that are not greater than the SAT. However, section 1905 provides that contracts or subcontracts at or below the SAT will not be exempt from a provision of law if it contains criminal or civil penalties; specifically refers to 41 U.S.C. 1905 and states that the law applies to contracts and subcontracts in amounts not greater than the SAT; or if the FAR Council makes a written determination that it is not in the best interest of the Federal Government to exempt contracts or subcontracts in amounts not greater than the SAT from the provision of law.

The requirements of section 862, as amended, should apply to all prime contracts and subcontracts regardless of dollar value because the Act requires a contract clause addressing the selection, training, equipping, and conduct of personnel performing private security functions to be inserted into every covered contract. A ``covered contract'' is defined by section 864 of the NDAA for FY 2008 as ``(A) a contract of a Federal agency for the performance of services in an area of combat operations, as designated by the Secretary of Defense under subsection (c) of section 862; (B) a subcontract at any tier under such a contract; or (C) a task order or delivery order issued under such a contract or subcontract.'' Since the NDAA specifically defines which contracts are covered, it is not in the best interest of the Federal Government to waive the applicability of these requirements to contracts in amounts not greater than the SAT because it would exclude a significant number of acquisitions and not fully meet the intent of the Act.

B. Applicability to Contracts for the Acquisition of Commercial Items

41 U.S.C. 1906 governs the applicability of laws to the acquisition of commercial items. It is intended to limit the applicability of laws to the acquisition of commercial items. However, section 1906 provides that the acquisition of commercial items will not be exempt from a provision of law if it contains criminal or civil penalties; specifically refers to 41 U.S.C. 1906 and states that the law applies to the acquisition of commercial items; or if the FAR Council makes a written determination that it is not in the best interest of the Federal Government to exempt the acquisition of commercial items from the provision of law.

The requirements of section 862, as amended, should apply to all prime contracts and subcontracts because the Act requires a contract clause addressing the selection, training, equipping, and conduct of personnel performing private security functions to be inserted into every covered contract. A ``covered contract'' is defined by section 864 of the NDAA for FY 2008 as ``(A) a contract of a Federal agency for the performance of services in an area of combat operations, as designated by the Secretary of Defense under subsection (c) of section 862; (B) a subcontract at any tier under such a contract; or (C) a task order or delivery order issued under such a contract or subcontract.'' Since the NDAA specifically defines which contracts are covered, it is not in the best interest of the Federal Government to waive the applicability of these requirements to the acquisition of commercial items because it would exclude a significant number of acquisitions and not fully meet the intent of the Act.

C. Applicability to Contracts for the Acquisition of COTS Items

41 U.S.C. 1907 governs the applicability of laws to the acquisition of commercially available off-the-shelf (COTS) items. It is intended to limit the applicability of laws to the acquisition of COTS items. However, 41 U.S.C. 1907 provides that the acquisition of COTS items will not be exempt from a provision of law if it contains criminal or civil penalties; specifically refers to 41 U.S.C. 1907 and states that the law applies to the acquisition of COTS items; concerns authorities or responsibilities under the Small Business Act (15 U.S.C. 644) or bid protest procedures developed under the authority of 31 U.S.C. 3551 et seq.; 10 U.S.C. 2305(e) and (f); or 41 U.S.C. 3706 and 3707; or if the Administrator for Federal Procurement Policy makes a written determination that it would not be in the best interest of the Federal Government to exempt the acquisition of COTS items from the provision of law.

The requirements of section 862, as amended, should apply to all prime contracts and subcontracts because the Act requires a contract clause addressing the selection, training, equipping, and conduct of personnel performing private security functions to be inserted into every covered contract. A ``covered contract'' is defined by section 864 of the NDAA for FY 2008 as ``(A) a contract of a Federal agency for the performance of services in an area of combat operations, as designated by the Secretary of Defense under subsection (c) of section 862; (B) a subcontract at any tier under such a contract; or (C) a task order or delivery order issued under such a contract or subcontract.'' Since the NDAA specifically defines which contracts are covered, it is not in the best interest of the Federal Government to waive the applicability of these requirements to the acquisition of COTS items because it would exclude a significant number of acquisitions and not fully meet the intent of the Act.

III. 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

An ``Applicability'' paragraph was added to the contract clause at FAR 52.225-26 in order to address situations where contract performance was to take place partially in a designated area and partially in a different, non-designated area.

The applicability statement at FAR 25.302-3(a)(3) was revised to match the clause prescription at FAR 25.302-6(a)(1) so that the agreement of the Secretary of State is required for designations of an area of ``other significant military operations'' for purposes of applicability of this rule to a DoD acquisition.

B. Analysis of Public Comments

1. Support for the Rule

Comment: One respondent expressed support for the rule, stating that the proposed amendment is crucial to our national security. The respondent concluded that the actions of private security contractors have far-reaching impacts on our international reputation and the success of worldwide peacekeeping and reconstruction efforts. The respondent stated that the record-keeping requirements of this rule will curb the illicit trade of weapons and other defense articles and increase the emphasis on qualification, training, and screening to improve the professionalism of security contractor personnel.

Response: Noted.

2. Applicability

Comment: One respondent suggested that FAR 25.302-2(a) and (b) (now 25.302-3(a) and (b)) should be amended to delete the phrase ``for supplies and services'' and refer only to ``contracts.'' The respondent made a related comment at FAR 25.302-2(d).

Response: Concur. This change removes the likelihood of confusion as to whether requirements such as construction, reconstruction, commodities, or utilities are included. While all these categories could be considered either supplies or services, it removes the possibility of misinterpretation.

3. Clause Prescription

Comment: One respondent recommended that the clause prescription at 25.302-6(a)(1) be changed by deleting ``of services and/or delivery of supplies,'' and that a similar change be made at (a)(2). The respondent also recommends substituting ``in, or with significant likelihood of performance in, an area of''.

Response: The Councils agree to the recommended deletion at 25.302-6(a)(1) and (a)(2) in order to remove the likelihood of confusion as to whether requirements such as construction, reconstruction, commodities, or utilities are included. The Councils do not agree with requiring the contracting officer to insert the clause when performance in a designated area is only likely. This would require offerors to account for this in proposals and unnecessarily raise proposed prices. Instead, the contracting officer should modify the solicitation or contract to add the clause if requirements change so that performance is needed in a designated area.

The Councils also are clarifying the clause to show that, if the contract is performed both in a designated area and in an area that is not designated, the clause only applies to the designated area. A new paragraph (b) is added to the clause that specifies that the clause applies to (1) DoD contracts to be performed in an area of (i) contingency operations outside the United States, (ii) combat operations, as designated by the Secretary of Defense, or (iii) other significant military operations as designated by the Secretary of Defense, only upon agreement of the Secretary of Defense and the Secretary of State; and (2) contracts issued by a non-DoD agency for performance in an area of (i) combat operations, as designated by the Secretary of Defense, or (ii) other significant military operations, as designated by the Secretary of Defense, and only upon agreement of the Secretary of Defense and the Secretary of State.

4. Accounting for Weapons

Comment: A respondent proposed to modify the contractor requirements at paragraph (b)(1)(ii) of the clause at FAR 52.225-26, Contractors Performing Private Security Functions Outside the United States, to add to the current requirement to authorize and account for weapons, additional requirements to authorize and account for ``International Trafficking in Arms (ITAR)-restricted items, if issued, and items designated as Sensitive Items by the Commander or Chief of Mission.'' The respondent stated that accounting solely for weapons was insufficient to protect deployed military and civilian personnel from the dangers of sensitive equipment getting into the hands of enemy combatants due to poor contractor accountability. As an example, the respondent noted that, if enemy combatants or terrorists secure uniforms, it will be much harder to identify them.

Response: This FAR rule implements statutory requirements that are unique to contractors performing private security functions. While the concerns cited by the respondent may be valid, they are not unique to the performance of private security functions and are therefore outside the scope of this rule. Further, other laws and policies cover accountability for the items cited by the respondent. For example, an ITAR license includes accountability requirements for the specific items covered by the license.

5. Clarifications for Federal Register Notice

Comment: One respondent recommended that the preamble of the final rule clarify that contractors do not waive any applicable privileges in order to be found to have sufficiently cooperated in a Government-authorized investigation, and that contractors should not be penalized in past performance evaluations or responsibility evaluations if the contractor provides access to an employee but the employee chooses not to cooperate.

Response: The Councils agree with these comments, on how the actions of contractors and their employees would be handled under United States law. These are similar to principles found in FAR 52.203-13, Contractor Code of Business Ethics and Conduct, in the definition of ``full cooperation''. The Councils however note that foreign country local law is also involved and cannot be changed by this rule.

6. Editorial Comments

Comment: A respondent recommended deleting the term ``subpart'' at FAR 25.302, as this is a section, not a subpart, of the FAR.

Response: This recommended change is made in the final rule.

Comment: A respondent noted that the applicability section of FAR 25.302 had been erroneously placed at 25.302-2, prior to the definitions section (at FAR 25.302-3). The FAR drafting convention is to place the definitions after the ``scope'' portion but prior to the ``applicability'' section of a rule.

Response: FAR section 25.302 is reordered in the final rule as noted by the respondent.

IV. 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. This is a significant regulatory action and, therefore, was subject to review under section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

V. 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:

The case implements sections of the National Defense Authorization Act for Fiscal Year 2008, as amended by subsequent NDAAs (see 10 U.S.C. 2302 Note), that establish minimum processes and requirements for the selection, accountability, training, equipping, and conduct of personnel performing private security functions outside the United States.

No comments on the initial regulatory flexibility analysis were received from the Chief Counsel for Advocacy of the Small Business Administration or the public in response to the publication of the proposed rule.

The impact on small business entities will be minor, for several reasons. Not all contracts involve the performance of private security functions, in which case the clause does not apply. In these situations, therefore, there is no impact on small business entities. Also, most contracts that require the performance of private security functions in the areas of Iraq and Afghanistan are being awarded to firms based in those countries. Most contracts for these services have not been awarded to small businesses because they are awarded and performed overseas. In the few cases in which a contractor is both a U.S. small business and is performing private security functions, the costs of compliance will be included in the proposed and negotiated subcontract cost. Further, the publication of 32 CFR part 159 provides consistency in reporting requirements and accountability for private security personnel and their weapons (as required by the law). This increased clarity serves to relieve the burdens on small businesses.

DoD contractors and subcontractors currently are required by another clause to register equipment and personnel using the DoD's Synchronized Predeployment and Operational Tracker (SPOT) System. The associated paperwork burden was previously approved for DoD under OMB control number 0704-0460, Synchronized Predeployment and Operational Tracker (SPOT) System. There is, at present, no reporting system that has been developed by non-DoD agencies. An information collection request for non-DoD agencies was submitted to the Office of Management and Budget with the proposed rule. The impact of this rule is limited to those few firms that are both a U.S. small business and are performing private security functions. The reporting burden has been limited to those items specifically required by law, and the use of the automated SPOT system enables easy and quick updates as necessary.

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.

VI. Paperwork Reduction Act

The Paperwork Reduction Act (44 U.S.C. chapter 35) applies. DoD's information collection has been approved previously under OMB Control Number 0704-0460, Synchronized Predeployment and Operation Tracker (SPOT) System. However, SPOT does not include reporting of specified incidents in which personnel performing private security functions under a contract are involved (see paragraph (c)(1)(iv) of the clause at FAR 52.225-26). In addition, there is a new information collection requirement for non-DoD agencies and incident reporting for DOD agencies that was previously submitted to the Office of Management and Budget and approved under OMB Control Number 9000-0184, Contractors Performing Private Security Functions Outside the United States.

List of Subjects in 48 CFR Parts 1, 25, and 52

Government procurement.

Dated: June 13, 2013.

William Clark,

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

Therefore, DoD, GSA, and NASA amend 48 CFR parts 1, 25 and 52 as set forth below:

1. The authority citation for 48 CFR parts 1, 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.

PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM

1.106 [Amended]

2. Amend section 1.106, in the table following the introductory text, by adding in numerical sequence, FAR segment ``25.302'' and its corresponding OMB Control No. ``9000-0184''.

PART 25--FOREIGN ACQUISITION

3. Add sections 25.302 through 25.302-6 to subpart 25.3 to read as follows:

25.302 Contractors performing private security functions outside the United States.

25.302-1 Scope.

This section prescribes policy for implementing section 862 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2008 (Pub.L. 110-181), as amended by section 853 of the NDAA for FY 2009 (Pub. L. 110-417), and sections 831 and 832 of the NDAA for FY 2011 (Pub. L. 111-383) (see 10 U.S.C. 2302 Note).

25.302-2 Definitions.

As used in this section--

Area of combat operations means an area of operations designated as such by the Secretary of Defense when enhanced coordination of contractors performing private security functions working for Government agencies is required.

Other significant military operations means activities, other than combat operations, as part of a contingency operation outside the United States that is carried out by United States Armed Forces in an uncontrolled or unpredictable high-threat environment where personnel performing security functions may be called upon to use deadly force (see 25.302-3(b)(2)).

Private security functions means activities engaged in by a contractor, as follows--

(1) Guarding of personnel, facilities, designated sites, or property of a Federal agency, the contractor or subcontractor, or a third party; or

(2) Any other activity for which personnel are required to carry weapons in the performance of their duties in accordance with the terms of the contract.

25.302-3 Applicability.

(a) DoD: This section applies to acquisitions by Department of Defense components under a contract that requires performance--

(1) During contingency operations outside the United States;

(2) In an area of combat operations as designated by the Secretary of Defense; or

(3) In an area of other significant military operations as designated by the Secretary of Defense, and only upon agreement of the Secretary of Defense and the Secretary of State.

(b) Non-DoD agencies: This section applies to acquisitions by non-DoD agencies under a contract that requires performance--

(1) In an area of combat operations as designated by the Secretary of Defense; or

(2) In an area of other significant military operations as designated by the Secretary of Defense, and only upon agreement of the Secretary of Defense and the Secretary of State.

(c) These designations can be found at http://www.acq.osd.mil/dpap/pacc/cc/designated_areas_of_other_significant_military_operations.html and http://www.acq.osd.mil/dpap/pacc/cc/designated_areas_of_combat_operations.html.

(d) When the applicability requirements of this subsection are met, contractors and subcontractors must comply with 32 CFR part 159, whether the contract is for the performance of private security functions as a primary deliverable or the provision of private security functions is ancillary to the stated deliverables.

(e) The requirements of section 25.302 shall not apply to--

(1) Contracts entered into by elements of the intelligence community in support of intelligence activities; or

(2) Temporary arrangements entered into on a non-DoD contract for the performance of private security functions by individual indigenous personnel not affiliated with a local or expatriate security company. These temporary arrangements must still comply with local law.

25.302-4 Policy.

(a) General. (1) The policy, responsibilities, procedures, accountability, training, equipping, and conduct of personnel performing private security functions in designated areas are addressed at 32 CFR part 159, entitled ``Private Security Contractors (PSCs) Operating in Contingency Operations, Combat Operations, or Other Significant Military Operations.'' Contractor responsibilities include ensuring that employees are aware of, and comply with, relevant orders, directives, and instructions; keeping appropriate personnel records; accounting for weapons; registering and identifying armored vehicles, helicopters, and other military vehicles; and reporting specified incidents in which personnel performing private security functions under a contract are involved.

(2) In addition, contractors are required to cooperate with any Government-authorized investigation into incidents reported pursuant to paragraph (c)(3) of the clause at 52.225-26, Contractors Performing Private Security Functions Outside the United States, by providing access to employees performing private security functions and relevant information in the possession of the contractor regarding the incident concerned.

(b) Implementing guidance. In accordance with 32 CFR part 159--

(1) Geographic combatant commanders will provide DoD contractors performing private security functions with guidance and procedures for the operational environment in their area of responsibility; and

(2) In a designated area of combat operations, or areas of other significant military operations, as designated by the Secretary of Defense and only upon agreement of the Secretary of Defense and the Secretary of State, the relevant Chief of Mission will provide implementing instructions for non-DoD contractors performing private security functions and their personnel consistent with the standards set forth by the geographic combatant commander. In accordance with 32 CFR 159.4(c), the Chief of Mission has the option of instructing non-DoD contractors performing private security functions and their personnel to follow the guidance and procedures of the geographic combatant commander and/or a sub-unified commander or joint force commander where specifically authorized by the combatant commander to do so and notice of that authorization is provided to non-DoD agencies.

25.302-5 Remedies.

(a) In addition to other remedies available to the Government--

(1) The contracting officer may direct the contractor, at its own expense, to remove and replace any contractor or subcontractor personnel performing private security functions who fail to comply with or violate applicable requirements. Such action may be taken at the Government's discretion without prejudice to its rights under any other contract provision, e.g., termination for default;

(2) The contracting officer shall include the contractor's failure to comply with the requirements of this section in appropriate databases of past performance and consider any such failure in any responsibility determination or evaluation of past performance; and

(3) In the case of award-fee contracts, the contracting officer shall consider a contractor's failure to comply with the requirements of this subsection in the evaluation of the contractor's performance during the relevant evaluation period, and may treat such failure as a basis for reducing or denying award fees for such period or for recovering all or part of award fees previously paid for such period.

(b) If the performance failures are severe, prolonged, or repeated, the contracting officer shall refer the matter to the appropriate suspending and debarring official.

25.302-6 Contract clause.

(a) Use the clause at 52.225-26, Contractors Performing Private Security Functions Outside the United States, in the following solicitations and contracts:

(1) A DoD contract for performance in an area of--

(i) Contingency operations outside the United States;

(ii) Combat operations, as designated by the Secretary of Defense; or

(iii) Other significant military operations, as designated by the Secretary of Defense only upon agreement of the Secretary of Defense and the Secretary of State.

(2) A contract of a non-DoD agency for performance in an area of--

(i) Combat operations, as designated by the Secretary of Defense; or

(ii) Other significant military operations, as designated by the Secretary of Defense and only upon agreement of the Secretary of Defense and the Secretary of State.

(b) The clause is not required to be used for--

(1) Contracts entered into by elements of the intelligence community in support of intelligence activities; or

(2) Temporary arrangements entered into by non-DoD contractors for the performance of private security functions by individual indigenous personnel not affiliated with a local or expatriate security company.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

4. Amend section 52.212-5 by--

a. Revising the date of the clause;

b. Redesignating paragraphs (b)(43) through (b)(51) as paragraphs (b)(44) through (b)(52), respectively;

c. Adding a new paragraph (b)(43);

0

d. Redesignating paragraphs (e)(1)(xiii) and (e)(1)(xiv) as paragraphs (e)(1)(xiv) and (e)(1)(xv), respectively; and

e. Adding a new paragraph (e)(1)(xiii).

The revised and added text reads as follows:

52.212-5 Contract Terms and Conditions Required to Implement Statutes or Executive Orders--Commercial Items.

* * * * *

Contract Terms and Conditions Required to Implement Statutes or Executive Orders--Commercial Items (Jul 2013)

* * * * *

(b) * * *

------(43) 52.225-26, Contractors Performing Private Security Functions Outside the United States (Jul 2013) (Section 862, as amended, of the National Defense Authorization Act for Fiscal Year 2008; 10 U.S.C. 2302 Note).

* * * * *

(e)(1) * * *

(i) * * *

(xiii) 52.225-26, Contractors Performing Private Security Functions Outside the United States (Jul 2013) (Section 862, as amended, of the National Defense Authorization Act for Fiscal Year 2008; 10 U.S.C. 2302 Note).

* * * * *

5. Add section 52.225-26 to read as follows:

52.225-26 Contractors Performing Private Security Functions Outside the United States.

As prescribed in 25.302-6 insert the following clause:

Contractors Performing Private Security Functions Outside the United States (Jul 2013)

(a) Definition.

Private security functions means activities engaged in by a Contractor, as follows:

(1) Guarding of personnel, facilities, designated sites, or property of a Federal agency, the Contractor or subcontractor, or a third party.

(2) Any other activity for which personnel are required to carry weapons in the performance of their duties in accordance with the terms of this contract.

(b) Applicability. If this contract is performed both in a designated area and in an area that is not designated, the clause only applies to performance in the designated area.

(1) For DoD contracts, designated areas are areas of--

(i) Contingency operations outside the United States;

(ii) Combat operations, as designated by the Secretary of Defense; or

(iii) Other significant military operations, as designated by the Secretary of Defense, and only upon agreement of the Secretary of Defense and the Secretary of State.

(2) For non-DoD contracts, designated areas are areas of--

(i) Combat operations, as designated by the Secretary of Defense; or

(ii) Other significant military operations, as designated by the Secretary of Defense, and only upon agreement of the Secretary of Defense and the Secretary of State.

(c) Requirements. The Contractor is required to--

(1) Ensure that all employees of the Contractor who are responsible for performing private security functions under this contract comply with 32 CFR part 159, and with any orders, directives, and instructions to Contractors performing private security functions that are identified in the contract for—

(i) Registering, processing, accounting for, managing, overseeing, and keeping appropriate records of personnel performing private security functions;

(ii) Authorizing and accounting for weapons to be carried by or available to be used by personnel performing private security functions;

(iii) Registering and identifying armored vehicles, helicopters, and other military vehicles operated by Contractors performing private security functions; and

(iv) Reporting incidents in which--

(A) A weapon is discharged by personnel performing private security functions;

(B) Personnel performing private security functions are attacked, killed, or injured;

(C) Persons are killed or injured or property is destroyed as a result of conduct by Contractor personnel;

(D) A weapon is discharged against personnel performing private security functions or personnel performing such functions believe a weapon was so discharged; or

(E) Active, non-lethal countermeasures (other than the discharge of a weapon) are employed by personnel performing private security functions in response to a perceived immediate threat;

(2) Ensure that the Contractor and all employees of the Contractor who are responsible for performing private security functions under this contract are briefed on and understand their obligation to comply with--

(i) Qualification, training, screening (including, if applicable, thorough background checks), and security requirements established by 32 CFR part 159, Private Security Contractors (PSCs) Operating in Contingency Operations, Combat Operations, or Other Significant Military Operations;

(ii) Applicable laws and regulations of the United States and the host country and applicable treaties and international agreements regarding performance of private security functions;

(iii) Orders, directives, and instructions issued by the applicable commander of a combatant command or relevant Chief of Mission relating to weapons, equipment, force protection, security, health, safety, or relations and interaction with locals; and

(iv) Rules on the use of force issued by the applicable commander of a combatant command or relevant Chief of Mission for personnel performing private security functions; and

(3) Cooperate with any Government-authorized investigation of incidents reported pursuant to paragraph (c)(1)(iv) of this clause and incidents of alleged misconduct by personnel performing private security functions under this contract by providing--

(i) Access to employees performing private security functions; and

(ii) Relevant information in the possession of the Contractor regarding the incident concerned.

(d) Remedies. In addition to other remedies available to the Government--

(1) The Contracting Officer may direct the Contractor, at its own expense, to remove and replace any Contractor or subcontractor personnel performing private security functions who fail to comply with or violate applicable requirements of this clause or 32 CFR part 159. Such action may be taken at the Government's discretion without prejudice to its rights under any other provision of this contract.

(2) The Contractor's failure to comply with the requirements of this clause will be included in appropriate databases of past performance and considered in any responsibility determination or evaluation of past performance; and

(3) If this is an award-fee contract, the Contractor's failure to comply with the requirements of this clause shall be considered in the evaluation of the Contractor's performance during the relevant evaluation period, and the Contracting Officer may treat such failure to comply as a basis for reducing or denying award fees for such period or for recovering all or part of award fees previously paid for such period.

(e) Rule of construction. The duty of the Contractor to comply with the requirements of this clause shall not be reduced or diminished by the failure of a higher- or lower-tier Contractor or subcontractor to comply with the clause requirements or by a failure of the contracting activity to provide required oversight.

(f) Subcontracts. The Contractor shall include the substance of this clause, including this paragraph (f), in all subcontracts that will be performed in areas of--

(1) DoD contracts only: Contingency operations, combat operations, as designated by the Secretary of Defense, or other significant military operations, as designated by the Secretary of Defense upon agreement of the Secretary of State; or

(2) Non-DoD contracts: Combat operations, as designated by the Secretary of Defense, or other significant military operations, upon agreement of the Secretaries of Defense and State that the clause applies in that area.

(End of clause)

6. Amend section 52.244-6 by--

a. Revising the date of the clause;

b. Redesignating paragraph (c)(1)(ix) as paragraph (c)(1)(x); and

c. Adding a new paragraph (c)(1)(ix).

The revised and added text reads as follows:

52.244-6 Subcontracts for Commercial Items.

* * * * *

Subcontracts for Commercial Items (Jul 2013)

* * * * *

(c)(1) * * *

(ix) 52.225-26, Contractors Performing Private Security Functions Outside the United States Jul 2013) (Section 862, as amended, of the National Defense Authorization Act for Fiscal Year 2008; 10 U.S.C. 2302 Note).

* * * * *

[FR Doc. 2013-14610 Filed 6-20-13; 8:45 am]

BILLING CODE 6820-EP-P

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[Federal Register Volume 78, Number 120 (Friday, June 21, 2013)]

[Rules and Regulations]

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

[FR Doc No: 2013-14611]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1 and 7

[FAC 2005-67; FAR Case 2013-004; Item II; Docket 2013-0004, Sequence 1]

RIN 9000-AM52

Federal Acquisition Regulation; Contracting Officer's Representative

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 improve contract surveillance by clarifying the contracting officer's representative (COR) responsibilities.

DATES: Effective Date: July 22, 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 2005-67, FAR Case 2013-004.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA are issuing a final rule to improve contract surveillance by clarifying the COR responsibilities in FAR 1.602-2(d). In addition, a corresponding change is also made at FAR 7.104(e).

This case originated from a DoD Panel on Contracting Integrity recommendation. The DoD Panel on Contracting Integrity, an internal DoD panel, consists of senior-level DoD officials from across DoD working to review progress made by DoD to eliminate areas of vulnerability of the defense contracting system that allow fraud, waste, and abuse to occur, and recommend changes in law, regulations, and policy to eliminate the areas of vulnerability. In order to improve the contracting environment, this rule provides additional explanation in the FAR to ensure that CORs understand their duties and responsibilities to survey contractor performance.

II. Publication of This Final Rule for Public Comment Is Not Required by Statute

Publication of proposed regulations, 41 U.S.C. 1707, is the statute which applies to the publication of the Federal Acquisition Regulation. Paragraph (a)(1) of the statute requires that a procurement policy, regulation, procedure, or form (including an amendment or modification thereof) must be published for public comment if it has either a significant effect beyond the internal operation procedures of the agency issuing the policy, regulation, procedure, or form or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment because it only involves internal Government procedures regarding the appointment of CORs and the clarification of COR responsibilities. This rule does not have a significant effect beyond the internal operation procedures of the agency issuing the policy, regulation, procedure, or form, and there is no significant cost or administrative impact on contractors or offerors.

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. 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. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

The Regulatory Flexibility Act does not apply to this rule because this final rule does not constitute a significant FAR revision and 41 U.S.C. 1707 does not require publication for public comment.

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 1 and 7

Government procurement.

Dated: June 13, 2013.

William Clark,

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

Therefore, DoD, GSA, and NASA amend 48 CFR parts 1 and 7 as set forth below:

1. The authority citation for 48 CFR parts 1 and 7 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 1--FEDERAL ACQUISITION REGULATIONS SYSTEM

2. Amend section 1.602-2 by--

a. Removing from the end of paragraph (b) ``and'';

b. Removing from paragraph (c) ``.'' and adding ``; and'' in its place; and

c. Revising paragraph (d) to read as follows:

1.602-2 Responsibilities.

* * * * *

(d) Designate and authorize, in writing and in accordance with agency procedures, a contracting officer's representative (COR) on all contracts and orders other than those that are firm-fixed price, and for firm-fixed-price contracts and orders as appropriate, unless the contracting officer retains and executes the COR duties. See 7.104(e).

A COR--

(1) Shall be a Government employee, unless otherwise authorized in agency regulations;

(2) Shall be certified and maintain certification in accordance with the current Office of Management and Budget memorandum on the Federal Acquisition Certification for Contracting Officer Representatives (FAC-COR) guidance, or for DoD, in accordance with the current applicable DoD policy guidance;

(3) Shall be qualified by training and experience commensurate with the responsibilities to be delegated in accordance with agency procedures;

(4) May not be delegated responsibility to perform functions that have been delegated under 42.202 to a contract administration office, but may be assigned some duties at 42.302 by the contracting officer;

(5) Has no authority to make any commitments or changes that affect price, quality, quantity, delivery, or other terms and conditions of the contract nor in any way direct the contractor or its subcontractors to operate in conflict with the contract terms and conditions;

(6) Shall be nominated either by the requiring activity or in accordance with agency procedures; and

(7) Shall be designated in writing, with copies furnished to the contractor and the contract administration office--

(i) Specifying the extent of the COR's authority to act on behalf of the contracting officer;

(ii) Identifying the limitations on the COR's authority;

(iii) Specifying the period covered by the designation;

(iv) Stating the authority is not redelegable; and

(v) Stating that the COR may be personally liable for unauthorized acts.

PART 7--ACQUISITION PLANNING

3. Amend section 7.104 by revising paragraph (e) to read as follows:

7.104 General procedures.

* * * * *

(e) The planner shall ensure that a COR is nominated as early as practicable in the acquisition process by the requirements official or in accordance with agency procedures. The contracting officer shall designate and authorize a COR as early as practicable after the nomination. See 1.602-2(d).

[FR Doc. 2013-14611 Filed 6-20-13; 8:45 am]

BILLING CODE 6820-EP-P

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[Federal Register Volume 78, Number 120 (Friday, June 21, 2013)]

[Rules and Regulations]

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

[FR Doc No: 2013-14612]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 4, 8, 9, 12, 13, 16, 17, 18, 19, 22, 25, 26, 28, 32, 44, and 52

[FAC 2005-67; FAR Case 2012-033; Item III; Docket 2012-0033, Sequence 1]

RIN 9000-AM51

Federal Acquisition Regulation; System for Award Management Name Change, Phase 1 Implementation

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 reflect the joining of the Central Contractor Registration (CCR), Online Representations and Certification Application (ORCA), and Excluded Parties List System (EPLS) databases into the System for Award Management (SAM) database.

DATES: Effective Date: July 22, 2013.

FOR FURTHER INFORMATION CONTACT: Mr. Curtis E. Glover, Sr., Procurement Analyst, at 202-501-1448, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-67, FAR Case 2012-033.

SUPPLEMENTARY INFORMATION:

I. Background

The E-Government Act of 2002 (Pub. L. 107-347) was enacted in an effort to improve the management and promotion of electronic Government services and processes. The Act established a framework of measures that require using Internet-based information technology to improve citizen access to Government information and services. GSA has embraced the intent of the Act by consolidating the Government-wide acquisition and award support systems into SAM. SAM is an information system tool that streamlines the Federal acquisition business processes by acting as a single authoritative data source for vendor, contract award, and reporting information, thereby eliminating the need to enter multiple sites and perform duplicative data entry. SAM consolidates hosting to improve the efficiency of doing business with the Government.

GSA began implementation of Phase 1 of SAM on July 29, 2012. Phase 1 combined the functional capabilities of the CCR, ORCA, and EPLS applications into the SAM database. Upon implementation, the pre-existing applications were retired, and all requirements for entity registration, representations and certifications, and exclusions are now accomplished via SAM. This final rule amends the FAR by updating references and names to conform to the SAM designation. This final rule also makes a number of minor additional conforming changes, such as updates to definitions.

II. Publication of This Final Rule for Public Comment Is Not Required by Statute

``Publication of proposed regulations'', 41 U.S.C. 1707, is the statute which applies to the publication of the Federal Acquisition Regulation. Paragraph (a)(1) of the statute requires that a procurement policy, regulation, procedure, or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure, or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment, because the rule itself does not change the databases and applications referenced in the FAR, it only reflects changes that have occurred to the systems that are utilized in the performance of those functions relating to entity registration, representations and certifications, and exclusions. Therefore, this rule does not create a significant cost or administrative impact on contractors or offerors.

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. 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. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

The Regulatory Flexibility Act does not apply to this rule because this final rule does not constitute a significant FAR revision within the meaning of 41 U.S.C. 1707 and does not require publication for public comment.

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 2, 4, 8, 9, 12, 13, 16, 17, 18, 19, 22, 25, 26, 28, 32, 44, and 52

Government procurement.

Dated: June 13, 2013.

William Clark,

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

Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 4, 8, 9, 12, 13, 16, 17, 18, 19, 22, 25, 26, 28, 32, 44, and 52 as set forth below:

1. The authority citation for 48 CFR parts 2, 4, 8, 12, 13, 16, 17, 19, 22, 25, 32, 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 2--DEFINITIONS OF WORDS AND TERMS

2. Amend section 2.101 in paragraph (b)(2) by--

a. Removing the definition ``Central Contractor Registration (CCR) database'';

b. Removing from the definition, ``Data Universal Numbering System +4 (DUNS+4) number'' the word ``CCR'' and adding ``System for Award Management'' in its place;

c. Removing the definitions ``Excluded Parties List System'' and ``Online Representations and Certifications Application (ORCA)'';

d. Removing the definition ``Registered in the CCR database'' and adding, in alphabetical order, the definition ``Registered in the System for Award Management (SAM) database'';

e. Removing from the definition, ``Small disadvantaged business concern'' in paragraph (1)(iii), the word ``CCR''; and

f. Adding, in alphabetical order, the definition ``System for Award Management (SAM)'' to read as follows:

2.101 Definitions.

* * * * *

(b) * * *

(2) * * *

Registered in the System for Award Management (SAM) database means that--

(1) The Contractor has entered all mandatory information, including the DUNS number or the DUNS+4 number, the Contractor and Government Entity (CAGE) code, as well as data required by the Federal Funding Accountability and Transparency Act of 2006 (see subpart 4.14), into the SAM database;

(2) The Contractor has completed the Core, Assertions, Representations and Certifications, and Points of Contact sections of the registration in the SAM database;

(3) The Government has validated all mandatory data fields, to include validation of the Taxpayer Identification Number (TIN) with the Internal Revenue Service (IRS). The contractor will be required to provide consent for TIN validation to the Government as a part of the SAM registration process; and

(4) The Government has marked the record ``Active''.

* * * * *

System for Award Management (SAM) means the primary Government repository for prospective Federal awardee and Federal awardee information and the centralized Government system for certain contracting, grants, and other assistance-related processes. It includes--

(1) Data collected from prospective Federal awardees required for the conduct of business with the Government;

(2) Prospective contractor-submitted annual representations and certifications in accordance with FAR subpart 4.12; and

(3) Identification of those parties excluded from receiving Federal contracts, certain subcontracts, and certain types of Federal financial and non-financial assistance and benefits.

* * * * *

PART 4--ADMINISTRATIVE MATTERS

4.203 [Amended]

3. Amend section 4.203 by removing from the introductory text of paragraph (e)(1) ``a central contractor registration database'' and adding ``the System for Award Management'' in its place.

4. Amend section 4.605 by revising paragraph (b) to read as follows:

4.605 Procedures.

* * * * *

(b) Data Universal Numbering System. The contracting officer must identify and report a Data Universal Numbering System (DUNS) number (Contractor Identification Number) for the successful offeror on a contract action. The DUNS number reported must identify the successful offeror's name and address as stated in the offer and resultant contract, and as registered in the System for Award Management database in accordance with the provision at 52.204-7, System for Award Management. The contracting officer must ask the offeror to provide its DUNS number by using either the provision at 52.204-6, Data Universal Numbering System Number, the provision at 52.204-7, System for Award Management, or the provision at 52.212-1, Instructions to Offerors--Commercial Items.

* * * * *

4.607 [Amended]

5. Amend section 4.607 by removing from paragraph (b) ``Central Contractor Registration'' and adding ``System for Award Management'' in its place.

4.905 [Amended]

6. Amend section 4.905 by removing from paragraph (a) ``Central Contractor Registration'' and adding ``System for Award Management'' in its place.

7. Revising the subpart heading of Subpart 4.11 to read as follows:

Subpart 4.11--System for Award Management

4.1100 [Amended]

8. Amend section 4.1100 by removing from the introductory text ``Central Contractor Registration (CCR)'' and adding ``System for Award Management (SAM)'' in its place.

4.1102 [Amended]

9. Amend section 4.1102 by--

a. Removing from paragraph (a), introductory text, and paragraph (a)(2) ``CCR'' and adding ``SAM'' in their places (three times);

b. Removing from paragraph (a)(6) ``CCR'' and adding ``System for Award Management'' in its place;

c. Removing from paragraph (b) and paragraph (c)(1)(i) ``CCR'' and adding ``SAM'' in their places;

d. Removing from paragraph (c)(1)(ii) ``Central Contractor Registration'' and ``CCR'' and adding ``System for Award Management'' and ``SAM'' in their places, respectively; and

e. Removing from paragraph (c)(2) and paragraph (c)(3) ``CCR'' and adding ``SAM'' in their places (three times).

4.1103 [Amended]

10. Amend section 4.1103 by--

a. Removing from paragraph (a)(1) ``CCR'' and adding ``SAM'' in its place (twice);

b. Removing from paragraphs (b), introductory text, and (b)(1) ``CCR'' and adding ``SAM'' in their places; and

c. Removing from paragraph (b)(3) ``CCR'' and adding ``the System for Award Management'' in its place.

d. Removing from paragraph (c) ``CCR'' and adding ``SAM'' in their places.

4.1105 [Amended]

11. Amend section 4.1105 by removing from paragraphs (a)(1), (a)(2), and (b) the words ``Central Contractor Registration'' and adding ``System for Award Management'' in its place.

4.1200 [Amended]

12. Amend section 4.1200 by removing from the introductory text ``Online Representations and Certifications Application (ORCA)'' and adding ``System for Award Management (SAM)'' in its place.

13. Amend section 4.1201 by:

a. Revising paragraph (a); and

b. Removing from paragraphs (b)(1), (b)(2), and (c) ``ORCA'' and adding ``SAM'' in their places (eight times).

The revised text reads as follows:

4.1201 Policy.

(a) Prospective contractors shall complete electronic annual representations and certifications at SAM accessed via https://www.acquisition.gov as a part of required registration (see FAR 4.1102).

* * * * *

4.1202 [Amended]

14. Amend section 4.1202 by removing from the introductory text ``Central Contract Registration'' and adding ``System for Award Management'' in its place.

PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES

8.402 [Amended]

15. Amend section 8.402 by removing from paragraph (g) ``Central Contractor Registration (CCR)'' and adding ``System for Award Management'' in its place.

PART 9--CONTRACTOR QUALIFICATIONS

16. The authority citation for 48 CFR part 9 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.

9.105-1 [Amended]

17. Amend section 9.105-1 by removing from paragraph (c), introductory text, ``Excluded Parties List System (EPLS)'' and adding ``System for Award Management Exclusions'' in its place.

18. Amend section 9.207 by revising paragraph (a)(9) to read as follows:

9.207 Changes in status regarding qualification requirements.

(a) * * *

(9) The source is listed in the System for Award Management Exclusions (see Subpart 9.4); or

* * * * *

19. Revise section 9.404 to read as follows:

9.404 System for Award Management Exclusions.

(a) The General Services Administration (GSA)--

(1) Operates the web-based System for Award Management (SAM) Exclusions; and

(2) Provides technical assistance to Federal agencies in the use of SAM.

(b) The SAM Exclusions contains the--

(1) Names and addresses of all contractors debarred, suspended, proposed for debarment, declared ineligible, or excluded or disqualified under the nonprocurement common rule, with cross-references when more than one name is involved in a single action;

(2) Name of the agency or other authority taking the action;

(3) Cause for the action (see 9.406-2 and 9.407-2 for causes authorized under this subpart) or other statutory or regulatory authority;

(4) Effect of the action;

(5) Termination date for each listing;

(6) Data Universal Numbering System number;

(7) Social Security Number (SSN), Employer Identification Number (EIN), or other Taxpayer Identification Number (TIN), if available; and

(8) Name and telephone number of the agency point of contact for the action.

(c) Each agency must--

(1) Obtain password(s) from GSA to access SAM for data entry;

(2) Notify GSA in the event a password needs to be rescinded (e.g., when an agency employee leaves or changes function);

(3) Enter the information required by paragraph (b) of this section within 3 working days after the action becomes effective;

(4) Determine whether it is legally permitted to enter the SSN, EIN, or other TIN, under agency authority to suspend or debar;

(5) Update SAM Exclusions, generally within 5 working days after modifying or rescinding an action;

(6) In accordance with internal retention procedures, maintain records relating to each debarment, suspension, or proposed debarment taken by the agency;

(7) Establish procedures to ensure that the agency does not solicit offers from, award contracts to, or consent to subcontracts with contractors whose names are in SAM Exclusions, except as otherwise provided in this subpart;

(8) Direct inquiries concerning listed contractors to the agency or other authority that took the action; and

(9) Contact GSA for technical assistance with SAM, via the support email address or on the technical support phone line available at the SAM Web site provided in paragraph (d) of this section.

(d) SAM is available via https://www.acquisition.gov.

9.405 [Amended]

20. Amend section 9.405 by removing from paragraphs (b), (d)(1), and (d)(4) the words ``the EPLS'' and adding ``SAM Exclusions'' in its place.

9.405-2 [Amended]

21. Amend section 9.405-2 by--

a. Removing from paragraph (b), introductory text, ``inclusion in the EPLS'' and adding ``listing in SAM Exclusions'' in its place;

b. Removing from paragraph (b)(2) ``in the EPLS'' and adding ``listed in SAM Exclusions'' in its place; and

c. Removing from paragraph (b)(3) ``inclusion in the EPLS'' and adding ``listing in SAM Exclusions'' in its place.

PART 12--ACQUISITION OF COMMERCIAL ITEMS

12.301 [Amended]

22. Amend section 12.301 by removing from paragraph (e)(4) ``Online Representations and Certifications Application (ORCA) Database'' and adding ``System for Award Management database'' in its place.

PART 13--SIMPLIFIED ACQUISITION PROCEDURES

13.102 [Amended]

23. Amend section 13.102 by removing from paragraph (a), introductory text, ``Central Contractor Registration'' and adding ``System for Award Management'' in its place.

13.201 [Amended]

24. Amend section 13.201 by removing from paragraph (h) ``Central Contractor Registration (CCR)'' and adding ``System for Award Management'' in its place.

PART 16--TYPES OF CONTRACTS

16.505 [Amended]

25. Amend section 16.505 by removing from paragraph (a)(12) ``Central Contractor Registration (CCR)'' and adding ``System for Award Management'' in its place.

PART 17--SPECIAL CONTRACTING METHODS

26. Amend section 17.207 by revising paragraph (c)(5) to read as follows:

17.207 Exercise of options.

* * * * *

(c) * * *

(5) The contractor is not listed in the System for Award Management Exclusions (see FAR 9.405-1).

* * * * *

PART 18--EMERGENCY ACQUISITIONS

27. The authority citation for 48 CFR part 18 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.

28. Revise section 18.102 to read as follows:

18.102 System for Award Management.

Contractors are not required to be registered in the System for Award Management (SAM) database for contracts awarded to support unusual and compelling needs or emergency acquisitions. (See 4.1102). However, contractors are required to register with SAM in order to gain access to the Disaster Response Registry. Contracting officers shall consult the Disaster Response Registry via https://www.acquisition.gov to determine the availability of contractors for debris removal, distribution of supplies, reconstruction, and other disaster or emergency relief activities inside the United States and outlying areas. (See 26.205).

PART 19--SMALL BUSINESS PROGRAMS

19.308 [Amended]

29. Amend section 19.308 by removing from paragraph (h)(2)(i) ``Central Contractor Registration (CCR) and Online Representations and Certifications Application (ORCA)'' and adding ``System for Award Management (SAM)'' in its place; and removing from paragraph (h)(3)(iv) ``CCR and ORCA'' and adding ``SAM'' in its place.

19.703 [Amended]

30. Amend section 19.703 by removing from paragraph (d)(1), introductory text, ``Central Contractor Registration (CCR)'' and adding ``System for Award Management'' in its place.

19.1503 [Amended]

31. Amend section 19.1503 by removing from paragraph (b)(1) ``Central Contractor Registration (CCR)'' and adding ``the System for Award Management (SAM)'' in its place; and removing from paragraph (b)(2) ``in the Online Representations and Certifications Application (ORCA)'' and adding ``as an EDWOSB or WOSB concern in SAM'' in its place.

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

22.1025 [Amended]

32. Amend section 22.1025 by removing ``Excluded Parties List System'' and adding ``System for Award Management Exclusions'' in its place.

PART 25--FOREIGN ACQUISITION

25.703-3 [Amended]

33. Amend section 25.703-3 by removing from paragraph (a) ``on the Excluded Parties List System'' and adding ``in the System for Award Management Exclusions'' in its place.

PART 26--OTHER SOCIOECONOMIC PROGRAMS

34. The authority citation for 48 CFR part 26 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.

26.205 [Amended]

35. Amend section 26.205 by removing from paragraph (b) ``CCR Search'' and ``CCR'' and adding ``System for Award Management (SAM) search'' and ``SAM'' in their places, respectively.

PART 28--BONDS AND INSURANCE

36. The authority citation for 48 CFR part 28 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.

28.203-7 [Amended]

37. Amend section 28.203-7 by removing from paragraphs (c) and (d) ``Excluded Parties List System'' and adding ``System for Award Management Exclusions'' in their places.

PART 32--CONTRACT FINANCING

32.805 [Amended]

38. Amend section 32.805 by removing from paragraph (d)(4) ``Central Contractor Registration'' and adding ``System for Award Management'' in its place.

32.905 [Amended]

39. Amend section 32.905 by removing from paragraph (b)(1)(ix)(B) ``Central Contractor Registration'' and adding ``System for Award Management'' in its place (twice).

40. Amend section 32.1108 by--

a. Removing from paragraph (b)(2)(i) ``Central Contractor Registration (CCR)'' and adding ``System for Award Management (SAM)'' in its place;0

b. Revise paragraph (b)(2)(ii); and

c. Removing from paragraphs (b)(2)(iii) and (b)(2)(iv) ``CCR'' and adding ``SAM'' in its place.

The revised text reads as follows:

32.1108 Payment by Governmentwide commercial purchase card.

* * * * *

(b) * * *

(2) * * *

(ii) The contracting officer shall not authorize the Governmentwide commercial purchase card as a method of payment during any period the SAM indicates that the contractor has delinquent debt subject to collection under the TOP. In such cases, payments under the contract shall be made in accordance with the clause at 52.232-33, Payment by Electronic Funds Transfer--System for Award Management, or 52.232-34, Payment by Electronic Funds Transfer--Other Than System for Award Management, as appropriate (see FAR 32.1110(d)).

* * * * *

41. Amend section 32.1110 by--

a. Removing from the introductory text of paragraph (a)(1) ``Central Contractor Registration'' and ``CCR'' and adding ``System for Award Management'' and ``System for Award Management (SAM)'' in its place, respectively;

b. Revising paragraph (a)(2)(i); and

c. Removing from paragraphs (d), (e)(1), (e)(2), and (g) ``Central Contractor Registration'' and adding ``System for Award Management'' in their places (five times).

The revised text reads as follows:

32.1110 Solicitation provision and contract clauses.

(a) * * *

(2)(i) 52.232-34, Payment by Electronic Funds Transfer--Other than System for Award Management, in solicitations and contracts that require EFT as the method for payment but do not include the provision at 52.204-7, System for Award Management, or a similar agency clause that requires the contractor to be registered in the SAM database.

* * * * *

PART 44--SUBCONTRACTING POLICIES AND PROCEDURES

42. The authority citation for 48 CFR part 44 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.

44.202-2 [Amended]

43. Amend section 44.202-2 by removing from paragraph (a)(13) ``Excluded Parties List System'' and adding ``System for Award Management Exclusions'' in its place.

44. Amend section 44.303 by revising paragraph (d) to read as follows:

44.303 Extent of review.

* * * * *

(d) Methods of evaluating subcontractor responsibility, including the contractor's use of the System for Award Management Exclusions (see 9.404) and, if the contractor has subcontracts with parties on the Exclusions list, the documentation, systems, and procedures the contractor has established to protect the Government's interests (see 9.405-2);

* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

45. Amend section 52.204-6 by:

a. Revising the date of the provision; and

b. Removing from paragraph (b) ``CCR'' and adding ``System for Award Management'' in its place.

The revised text reads as follows:

52.204-6 Data Universal Numbering System Number.

* * * * *

Data Universal Numbering System Number (Jul 2013)

* * * * *

46. Amend section 52.204-7 by--

a. Revising the section heading;

b. Revising the provision heading and the date of the provision;

c. Amending paragraph (a) by--

i. Removing the definition ``Central Contractor Registration (CCR) database'';

ii. Removing from the definition ``Data Universal Numbering System +4 (DUNS+4) number'' the acronym ``CCR'' and adding ``System for Award Management'' in its place;

iii. Removing the definition ``Registered in the CCR database''; and adding, in alphabetical order, the definition ``Registered in the System for Award Management (SAM) database''; and

d. Removing from paragraphs (b)(1), (b)(2), and (d) ``CCR'' and adding ``SAM'' in their places; and

e. Revising the date of Alternate I; and removing from paragraph (b)(1) of Alternate I ``CCR database'' and adding ``System for Award Management'' in its place (twice).

The revised text reads as follows:

52.204-7 System for Award Management.

* * * * *

System for Award Manangement (Jul 2013)

(a) * * *

Registered in the System for Award Management (SAM) database means that--

(1) The offeror has entered all mandatory information, including the DUNS number or the DUNS+4 number, the Contractor and Government Entity (CAGE) code, as well as data required by the Federal Funding Accountability and Transparency Act of 2006 (see Subpart 4.14) into the SAM database;

(2) The offeror has completed the Core, Assertions, and Representations and Certifications, and Points of Contact sections of the registration in the SAM database;

(3) The Government has validated all mandatory data fields, to include validation of the Taxpayer Identification Number (TIN) with the Internal Revenue Service (IRS). The offeror will be required to provide consent for TIN validation to the Government as a part of the SAM registration process; and

(4) The Government has marked the record ``Active''.

* * * * *

Alternate I (Jul 2013) * * *

* * * * *

47. Amend section 52.204-8 by--

a. Revising the date of the provision;

b. Removing from paragraph (b)(1) ``Central Contractor Registration'' and adding ``System for Award Management'' in its place;

c. Removing from paragraph (b)(2), introductory text, ``CCR'' and ``ORCA'' and adding ``the System for Award Management (SAM)'' and ``Representations and Certifications section of SAM'' in their places, respectively;

d. Removing from paragraph (c)(1), introductory text, ``ORCA'' and adding ``SAM'' in its place;

e. Removing from paragraph (c)(1)(iii) ``Central Contractor Registration'' and adding ``System for Award Management'' in its place; and

f. Revising paragraph (d).

The revised text reads as follows:

52.204-8 Annual Representations and Certifications.

* * * * *

Annual Representations and Certifications (Jul 2013)

* * * * *

(d) The offeror has completed the annual representations and certifications electronically via the SAM Web site accessed through https://www.acquisition.gov. After reviewing the SAM database information, the offeror verifies by submission of the offer that the representations and certifications currently posted electronically that apply to this solicitation as indicated in paragraph (c) of this provision have been entered or updated within the last 12 months, are current, accurate, complete, and applicable to this solicitation (including the business size standard applicable to the NAICS code referenced for this solicitation), as of the date of this offer and are incorporated in this offer by reference (see FAR 4.1201); except for the changes identified below [offeror to insertchanges, identifying change by clause number, title, date]. These amended representation(s) and/or certification(s) are also incorporated in this offer and are current, accurate, and complete as of the date of this offer.

FAR Clause No.

Title

Date

Change


Any changes provided by the offeror are applicable to this solicitation only, and do not result in an update to the representations and certifications posted on SAM.

48. Amend section 52.204-10 by--

a. Revising the date of the clause;

b. Removing from paragraph (d)(1), introductory text, ``Central Contractor Registration (CCR)'' and adding ``System for Award Management (SAM)'' in its place; and

c. Removing from paragraph (h) ``CCR'' and adding ``SAM'' in its place (twice).

The revised text reads as follows:

52.204-10 Reporting Executive Compensation and First-Tier Subcontract Awards.

* * * * *

Reporting Executive Compensation and First-Tier Subcontract Awards (Jul 2013)

* * * * *

49. Amend section 52.204-13 by--

a. Revising the section heading;

b. Revising the clause heading and the date of the clause;

c. Amending paragraph (a) by--

i. Removing the definition ``Central Contractor Registration (CCR) database'';

ii. Removing from the definition ``Data Universal Numbering System +4 (DUNS+4) number'' the acronym ``CCR'' and adding ``SAM'' in its place;0

iii. Removing the definition ``Registered in the CCR database'' and adding, in alphabetical order, the definition ``Registered in the System for Award Management (SAM) database''; and

iv. Adding, in alphabetical order, the definition ``System for Award Management (SAM)'';

d. Removing from paragraph (b) ``CCR'' and adding ``SAM'' in its place (four times);

e. Removing from paragraphs (c)(1)(i)(A) and (c)(1)(ii) ``CCR'' and adding ``SAM'' in its place; and

f. Revising paragraph (c)(2).

The revised text reads as follows:

52.204-13 System for Award Management Maintenance.

* * * * *

System for Award Management Maintenance (Jul 2013)

(a) * * *

Registered in the System for Award Management (SAM) database means that--

(1) The Contractor has entered all mandatory information, including the DUNS number or the DUNS+4 number, the Contractor and Government Entity (CAGE) code, as well as data required by the Federal Funding Accountability and Transparency Act of 2006 (see subpart 4.14), into the SAM database;

(2) The Contractor has completed the Core, Assertions, Representations and Certifications, and Points of Contact sections of the registration in the SAM database;

(3) The Government has validated all mandatory data fields, to include validation of the Taxpayer Identification Number (TIN) with the Internal Revenue Service (IRS). The Contractor will be required to provide consent for TIN validation to the Government as a part of the SAM registration process; and

(4) The Government has marked the record ``Active''.

System for Award Management (SAM) means the primary Government repository for prospective Federal awardee and Federal awardee information and the centralized Government system for certain contracting, grants, and other assistance-related processes. It includes--

(1) Data collected from prospective Federal awardees required for the conduct of business with the Government;

(2) Prospective contractor-submitted annual representations and certifications in accordance with FAR subpart 4.12; and

(3) Identification of those parties excluded from receiving Federal contracts, certain subcontracts, and certain types of Federal financial and non-financial assistance and benefits.

* * * * *

(c) * * *

(2) The Contractor shall not change the name or address for EFT payments or manual payments, as appropriate, in the SAM record to reflect an assignee for the purpose of assignment of claims (see FAR subpart 32.8, Assignment of Claims). Assignees shall be separately registered in the SAM. Information provided to the Contractor's SAM record that indicates payments, including those made by EFT, to an ultimate recipient other than that Contractor will be considered to be incorrect information within the meaning of the ``Suspension of Payment'' paragraph of the EFT clause of this contract.

* * * * *

50. Amend section 52.209-6 by revising the date of the clause and paragraph (d) to read as follows:

52.209-6 Protecting the Government's Interest When Subcontracting with Contractors Debarred, Suspended, or Proposed for Debarment.

* * * * *

Protecting The Government's Interest When Subcontracting With Contractors Debarred, Suspended, or Proposed for Debarment (Jul 2013)

* * * * *

(d) A corporate officer or a designee of the Contractor shall notify the Contracting Officer, in writing, before entering into a subcontract with a party (other than a subcontractor providing a commercially available off-the-shelf item) that is debarred, suspended, or proposed for debarment (see FAR 9.404 for information on the System for Award Management (SAM) Exclusions). The notice must include the following:

(1) The name of the subcontractor.

(2) The Contractor's knowledge of the reasons for the subcontractor being listed with an exclusion in SAM.

(3) The compelling reason(s) for doing business with the subcontractor notwithstanding its being listed with an exclusion in SAM.

(4) The systems and procedures the Contractor has established to ensure that it is fully protecting the Government's interests when dealing with such subcontractor in view of the specific basis for the party's debarment, suspension, or proposed debarment.

* * * * *

51. Amend section 52.209-7 by:

a. Revising the date of the provision; and

b. Removing from paragraph (d) ``Central Contractor Registration'' and adding ``System for Award Management'' in its place.

The revised text reads as follows:

52.209-7 Information Regarding Responsibility Matters.

* * * * *

Information Regarding Responsibility matters (Jul 2013)

* * * * *

52. Amend section 52.209-9 by revising the date of the clause; and removing from paragraph (a) ``Central Contractor Registration'' and adding ``System for Award Management'' in its place. The revised text reads as follows:

52.209-9 Updates of Publicly Available Information Regarding Responsibility Matters.

* * * * *

Updates of Publicly Available Information Regarding Responsibility Matters (Jul 2013)

* * * * *

53. Amend section 52.212-1 by--

a. Revising the date of the provision;

b. Removing from paragraph (j) ``Central Contractor Registration (CCR)'' and ``CCR'' and adding ``System for Award Management (SAM)'' and ``SAM'' in their places, respectively; and

c. Revising paragraph (k).

The revised text reads as follows:

52.212-1 Instructions to Offerors--Commercial Items.

* * * * *

Instructions to Offerors--Commercial Items (Jul 2013)

* * * * *

(k) System for Award Management. Unless exempted by an addendum to this solicitation, by submission of an offer, the offeror acknowledges the requirement that a prospective awardee shall be registered in the SAM database prior to award, during performance and through final payment of any contract resulting from this solicitation. If the Offeror does not become registered in the SAM database in the time prescribed by the Contracting Officer, the Contracting Officer will proceed to award to the next otherwise successful registered Offeror. Offerors may obtain information on registration and annual confirmation requirements via the SAM database accessed through https://www.acquisition.gov.

* * * * *

54. Amend section 52.212-3 by--

a. Revising the date of the provision;

b. Removing from the introductory text ``ORCA'' and adding ``System for Award Management (SAM)'' in its place;

c. Removing from paragraph (b)(1) ``Online Representations and Certifications Application (ORCA)'' and adding ``SAM'' in its place;

d. Removing from paragraph (b)(2) ``ORCA'' and adding ``SAM'' in its place (three times);

e. Removing from paragraph (c)(10)(i)(A) ``CCR'' and adding ``SAM'' in its place; and

f. Removing from paragraph (l), introductory text ``a central contractor registration'' and adding ``the SAM'' in its place.

The revised text reads as follows:

52.212-3 Offeror Representations and Certifications--Commercial Items.

* * * * *

Offeror Representations and Certifications--Commercial items (Jul 2013)

* * * * *

55. Amend section 52.212-4 by--

a. Revising the date of the clause;

b. Removing from paragraph (g)(1)(x)(B) ``Central Contractor Registration'' and adding ``System for Award Management'' in its place (twice);

c. Revising the heading of paragraph (t);

d. Removing from paragraphs (t)(1), (t)(2)(i), (t)(2)(ii), and (t)(3) ``CCR'' and adding ``SAM'' in its place (nine times); and

e. Revising paragraph (t)(4).

The revised text reads as follows:

52.212-4 Contract Terms and Conditions--Commercial Items.

* * * * *

Contract Terms and Conditions--Commercial Items (Jul 2013)

* * * * *

(t) System for Award Management (SAM) * * *

(4) Offerors and Contractors may obtain information on registration and annual confirmation requirements via SAM accessed through https://www.acquisition.gov.

* * * * *

56. Amend section 52.212-5 by--

a. Revising the date of the clause;

b. Revising paragraphs (b)(4), (b)(6), (b)(7), (b)(14), (b)(15)(i), (b)(20), (b)(23), (b)(24), (b)(25), (b)(48), (b)(49), and (b)(50);

c. Revising paragraph (e)(1)(ii); and

d. Amending Alternate II by revising the dates in the introductory text and the first sentence in paragraph (e)(1)(ii)(C).

The revised text reads as follows:

52.212-5 Contract Terms and Conditions Required to Implement Statutes or Executive Orders--Commercial Items.

* * * * *

Contract Terms and Conditions Required to Implement Statutes or Executive Orders--Commercial Items (Jul 2013)

* * * * *

(b) * * *

---- (4) 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards (Jul 2013) (Pub. L. 109-282) (31 U.S.C. 6101 note).

* * * * *

---- (6) 52.209-6, Protecting the Government's Interest When Subcontracting with Contractors Debarred, Suspended, or Proposed for Debarment. (Jul 2013) (31 U.S.C. 6101 note).

---- (7) 52.209-9, Updates of Publicly Available Information Regarding Responsibility Matters (Jul 2013) (41 U.S.C. 2313).

* * * * *

---- (14) 52.219-8, Utilization of Small Business Concerns (Jul 2013) (15 U.S.C. 637 (d)(2) and (3)).

---- (15)(i) 52.219-9, Small Business Subcontracting Plan (Jul 2013) (15 U.S.C. 637(d)(4)).

* * * * *

---- (20) 52.219-25, Small Disadvantaged Business Participation Program--Disadvantaged Status and Reporting (Jul 2013) (Pub. L. 103-355, section 7102, and 10 U.S.C. 2323).

* * * * *

-------- (23) 52.219-28, Post Award Small Business Program Rerepresentation (Jul 2013) (15 U.S.C. 632(a)(2)).

---- (24) 52.219-29, Notice of Set-Aside for Economically Disadvantaged Women-Owned Small Business (EDWOSB) Concerns (Jul 2013) (15 U.S.C. 637(m)).

---- (25) 52.219-30, Notice of Set-Aside for Women-Owned Small Business (WOSB) Concerns Eligible Under the WOSB Program (Jul 2013) (15 U.S.C. 637(m)).

* * * * *

---- (48) 52.232-33, Payment by Electronic Funds Transfer--System for Award Management (Jul 2013) (31 U.S.C. 3332).

---- (49) 52.232-34, Payment by Electronic Funds Transfer--Other than System for Award Management (Jul 2013) (31 U.S.C. 3332).

---- (50) 52.232-36, Payment by Third Party (Jul 2013) (31 U.S.C. 3332).

* * * * *

(e)(1) * * *

(ii) 52.219-8, Utilization of Small Business Concerns (Jul 2013) (15 U.S.C. 637(d)(2) and (3)), in all subcontracts that offer further subcontracting opportunities. If the subcontract (except subcontracts to small business concerns) exceeds $650,000 ($1.5 million for construction of any public facility), the subcontractor must include 52.219-8 in lower tier subcontracts that offer subcontracting opportunities.

* * * * *

---- Alternate II (Jul 2013) * * *

* * * * *

(e)(1) * * *

(ii) * * *

(C) 52.219-8, Utilization of Small Business Concerns (Jul 2013) (15 U.S.C. 637(d)(2) and (3)), in all subcontracts that offer further subcontracting opportunities. * * *

* * * * *

57. Amend section 52.213-4 by revising the date of the clause and paragraphs (a)(2)(iv), (a)(2)(vi), (b)(1)(i), (b)(1)(xi), (b)(1)(xii), and (b)(2)(i) to read as follows:

52.213-4 Terms and Conditions--Simplified Acquisitions (Other Than Commercial Items).

* * * * *

Terms and Conditions--Simplified Acquisitions (Other Than Commercial Items) (Jul 2013)

* * * * *

(a) * * *

(2) * * *

(iv) 52.232-25, Prompt Payment (Jul 2013).

* * * * *

(vi) 52.244-6, Subcontracts for Commercial Items (Jul 2013).

* * * * *

(b) * * *

(1) * * *

(i) 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards (Jul 2013) (Pub. L. 109-282) (31 U.S.C. 6101 note) (Applies to contracts valued at $25,000 or more).

* * * * *

(xi) 52.232-33, Payment by Electronic Funds Transfer--System for Award Management (Jul 2013). (Applies when the payment will be made by electronic funds transfer (EFT) and the payment office uses the System for Award Management (SAM) database as its source of EFT information.)

(xii) 52.232-34, Payment by Electronic Funds Transfer--Other than System for Award Management (Jul 2013). (Applies when the payment will be made by EFT and the payment office does not use the SAM database as its source of EFT information.)

* * * * *

(2) * * *

(i) 52.209-6, Protecting the Government's Interest When Subcontracting with Contractors Debarred, Suspended, or Proposed for Debarment (Jul 2013) (Applies to contracts over $30,000).

* * * * *

58. Amend section 52.219-8 by--

0

b. Removing from paragraph (c), in the definition ``Small disadvantaged business concern'', in paragraph (1)(iv) the acronym, ``CCR''; and

c. Removing from paragraph (d)(2), introductory text, ``Central Contractor Registration (CCR)'' and adding ``System for Award Management'' in its place.

The revised text reads as follows:

52.219-8 Utilization of Small Business Concerns.

* * * * *

Utilization of Small Business Concerns (Jul 2013)

* * * * *

59. Amend section 52.219-9 by--

a. Revising the date of the clause;

b. Revising paragraph (d)(5);

c. Removing from paragraph (d)(11)(i) ``CCR'' and adding ``SAM'' in its place; and

d. Removing from paragraph (e)(4) ``Central Contractor Registration (CCR)'' and adding ``SAM'' in its place.

The revised text reads as follows:

52.219-9 Small Business Subcontracting Plan.

* * * * *

Small Business Subcontracting Plan (Jul 2013)

* * * * *

(d) * * *

(5) A description of the method used to identify potential sources for solicitation purposes (e.g., existing company source lists, the System for Award Management (SAM), veterans service organizations, the National Minority Purchasing Council Vendor Information Service, the Research and Information Division of the Minority Business Development Agency in the Department of Commerce, or small, HUBZone, small disadvantaged, and women-owned small business trade associations). A firm may rely on the information contained in SAM as an accurate representation of a concern's size and ownership characteristics for the purposes of maintaining a small, veteran-owned small, service-disabled veteran-owned small, HUBZone small, small disadvantaged, and women-owned small business source list. Use of SAM as its source list does not relieve a firm of its responsibilities (e.g., outreach, assistance, counseling, or publicizing subcontracting opportunities) in this clause.

* * * * *

60. Amend section 52.219-25 by:

a. Revising the date of the clause; and

b. Removing from paragraph (a) ``Central Contractor Registration database'' and adding ``System for Award Management'' in its place.

The revised text reads as follows:

52.219-25 Small Disadvantaged Business Participation Program--Disadvantaged Status and Reporting.

* * * * *

Small Disadvantaged Business Participation Program--Disadvantaged Status and Reporting (Jul 2013)

* * * * *

61. Amend section 52.219-28 by--

a. Revising the date of the clause;

b. Revising paragraph (e); and

c. Removing from paragraph (g) ``ORCA'' and adding ``SAM'' in its place (two times).

The revised text reads as follows:

52.219-28 Post-Award Small Business Program Rerepresentation.

* * * * *

Post-Award Small Business Program Rerepresentation (Jul 2013)

* * * * *

(e) Except as provided in paragraph (g) of this clause, the Contractor shall make the representation required by paragraph (b) of this clause by validating or updating all its representations in the Representations and Certifications section of the System for Award Management (SAM) and its other data in SAM, as necessary, to ensure that they reflect the Contractor's current status. The Contractor shall notify the contracting office in writing within the timeframes specified in paragraph (b) of this clause that the data have been validated or updated, and provide the date of the validation or update.

* * * * *

62. Amend section 52.219-29 by:

a. Revising the date of the clause; and

b. Removing from paragraph (e)(2) ``Central Contractor Registration (CCR) database and the Online Representations and Certifications Application (ORCA)'' and adding ``System for Award Management'' in its place.

The revised text reads as follows:

52.219-29 Notice of Set-Aside for Economically Disadvantaged Women-Owned Small Business Concerns.

* * * * *

Notice of Set-Aside for Economically Disadvantaged Women-Owned Small Business Concerns (Jul 2013)

* * * * *

63. Amend section 52.219-30 by:

a. Revising the date of the clause; and

b. Removing from paragraph (e)(2) ``Central Contractor Registration (CCR) database and the Online Representations and Certifications Application (ORCA)'' and adding ``System for Award Management'' in its place.

The revised text reads as follows:

52.219-30 Notice of Set-Aside for Women-Owned Small Business Concerns Eligible Under the Women-Owned Small Business Program.

* * * * *

Notice of Set-Aside for Women-Owned Small Business Concerns Eligible Under the Women-Owned Small Business Program (Jul 2013)

* * * * *

64. Amend section 52.232-25 by:

a. Revising the date of the clause; and

b. Removing from paragraph (a)(3)(ix)(B) ``Central Contractor Registration'' and adding ``System for Award Management'' in its place (two times).

The revised text reads as follows:

52.232-25 Prompt Payment.

* * * * *

Prompt Payment (Jul 2013)

* * * * *

65. Amend section 52.232-26 by:

a. Revising the date of the clause; and

b. Removing from paragraph (a)(2)(ix)(B) ``Central Contractor Registration'' and adding ``System for Award Management'' in its place (two times).

The revised text reads as follows:

52.232-26 Prompt Payment for Fixed-Price Architect-Engineer Contracts.

* * * * *

Prompt Payment for Fixed-Price Architect-Engineer Contracts (Jul 2013)

* * * * *

66. Amend section 52.232-27 by revising the date of the clause; and removing from paragraph (a)(2)(x)(B) ``Central Contractor Registration'' and adding ``System for Award Management'' in its place (two times).

52.232-27 Prompt Payment for Construction Contracts.

* * * * *

Prompt Payment For Construction Contracts (Jul 2013)

* * * * *

67. Amend section 52.232-33 by--

a. Revising the section heading;

b. Revising the clause heading and the date of the clause;

c. Removing from paragraph (b) ``Central Contractor Registration (CCR)'' and ``CCR'' and adding ``System for Award Management (SAM)'' and ``SAM'' in its place, respectively;

d. Removing from paragraph (d) ``CCR'' and adding ``SAM'' in its place (two times); and

e. Removing from paragraph (g) and paragraph (i) ``CCR'' and adding ``SAM'' in its place.

The revised text reads as follows:

52.232-33 Payment by Electronic Funds Transfer--System for Award Management.

* * * * *

Payment by Electronic Funds Transfer--System for Award Management (Jul 2013)

* * * * *

68. Amend section 52.232-34 by revising the section and clause headings and the date of the clause to read as follows:

52.232-34 Payment by Electronic Funds Transfer--Other than System for Award Management.

* * * * *

Payment by Electronic Funds Transfer--Other than System for Award Management (Jul 2013)

* * * * *

69. Amend section 52.232-35 by:

a. Revising the date of the clause; and

b. Removing from paragraph (a) ``Central Contractor Registration'' and adding ``System for Award Management'' in its place.

The revised text reads as follows:

52.232-35 Designation of Office for Government Receipt of Electronic Funds Transfer Information.

* * * * *

Designation of Office for Government Receipt of Electronic Funds Transfer Information (Jul 2013)

* * * * *

70. Amend section 52.232-36 by:

a. Revising the date of the clause; and

b. Removing from paragraph (a)(2) ``Central Contractor Registration (CCR)'' and ``CCR'' and adding ``System for Award Management (SAM)'' and ``SAM'' in their places, respectively.

The revised text reads as follows:

52.232-36 Payment by Third Party.

* * * * *

Payment by Third Party (Jul 2013)

* * * * *

71. Amend section 52.232-38 by:

a. Revising the date of the clause; and

b. Removing from the introductory text ``Central Contractor Registration'' and adding ``System for Award Management'' in its place. The revised text reads as follows:

52.232-38 Submission of Electronic Funds Transfer Information with Offer.

* * * * *

Submission of Electronic Funds Transfer Information With Offer (Jul 2013)

* * * * *

72. Amend section 52.244-6 by revising the date of the clause and paragraph (c)(1)(iii) to read as follows.

52.244-6 Subcontracts for Commercial Items.

* * * * *

Subcontracts for Commercial Items (Jul 2013)

* * * * *

(c)(1) * * *

(iii) 52.219-8, Utilization of Small Business Concerns (Jul 2013) (15 U.S.C. 637(d)(2) and (3)), if the subcontract offers further subcontracting opportunities. If the subcontract (except subcontracts to small business concerns) exceeds $650,000 ($1.5 million for construction of any public facility), the subcontractor must include 52.219-8 in lower tier subcontracts that offer subcontracting opportunities.

* * * * *

[FR Doc. 2013-14612 Filed 6-20-13; 8:45 am]

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[Federal Register Volume 78, Number 120 (Friday, June 21, 2013)]

[Rules and Regulations]

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

[FR Doc No: 2013-14613]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 4 and 17

[FAC 2005-67; FAR Case 2012-010; Item IV; Docket 2012-0010, Sequence 1]

RIN 9000-AM36

Federal Acquisition Regulation; Interagency Acquisitions: Compliance by Nondefense Agencies With Defense Procurement Requirements

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, with changes, an interim rule amending the Federal Acquisition Regulation (FAR) to add new requirements specific to the acquisition of supplies and services by nondefense agencies on behalf of DoD. This rule implements a section of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2008, with later amendments; and section 801 of the NDAA for FY 2013, Public Law 112-239.

DATES: Effective Date: July 22, 2013.

FOR FURTHER INFORMATION CONTACT: Ms. Patricia Corrigan, Procurement Analyst, at 202-208-1963 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-67, FAR Case 2012-010.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published an interim rule in the Federal Register at 77 FR 69720 on November 20, 2012, to implement the requirements of section 801 of the NDAA for FY 2008 (Pub. L. 110-181) as amended, (10 U.S.C. 2304 note). The interim rule made the following changes:

Clarified FAR 4.603(c) regarding the allocation of socioeconomic credit to the requesting agency for assisted acquisitions.

Created a new FAR subpart 17.7, which establishes the policy related to internal controls and compliance certification under which nondefense agencies may procure supplies and services on behalf of DoD and identified DoD acquisition official responsibilities to identify DoD unique requirements. The new FAR subpart 17.7 cross-references and is cross-referenced at FAR subpart 17.5, Interagency Acquisitions.

To implement the NDAA for FY 2013, this final rule changes ``defense'' to ``applicable'' in FAR 17.703(a) and (b).

Three 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 and the changes made to the rule as a result of those comments are provided as follows:

A. Summary of Significant Changes

No significant changes have been made in the final rule. However, the following minor changes have been made:

(1) References to the term ``defense procurement'' have been changed to ``applicable procurement'' in order to implement section 801 of the NDAA FY 2013, Pub. L. 112-239.

(2) Based on public comment, DoD class deviations have been included in the list of laws and regulations that apply to procurements of supplies and services made by DoD through other Federal agencies in FAR 17.703(b)(2).

B. Analysis of Public Comments

1. Location of Coverage

Comment: Suggest that this coverage be moved to a new section within FAR subpart 17.5 (e.g., FAR 17.505). This way, the rule would be where readers would reasonably expect it to be and they would not have to move back and forth between subparts, which are typically located on different Web pages.

Response: To simplify locating the required regulations, a cross reference to FAR subpart 17.7 is included at FAR 17.500 and another cross reference to FAR subpart 17.5 is included at FAR 17.700.2. Compliance With DoD Class Deviations

Comment: FAR 17.703(b)(2) does not mention DoD class deviations to the FAR and Defense Federal Acquisition Regulation Supplement (DFARS). If nondefense agencies will be required to comply with DoD class deviations, it is suggested that this be explicitly stated along with a Web address where they can be found.

Response: The rule was amended to reference DoD class deviations and the Web address where they can be found.3. Definition of DoD ``Acquisition Official''

Comment: The commenter knew what a contracting officer is, but wondered what a DoD ``acquisition official'' other than a contracting officer might be. The commenter added that ``all approvals should be routed through the office of the contracting division that would otherwise write the contract.''

Response: The term ``Department of Defense (DoD) acquisition official'' is defined in FAR 17.701, consistent with statute, and is used throughout FAR subpart 17.7. Specific guidance regarding designation of agency acquisition officials, their delegated authority, and routing of contractual documents is more suitable for inclusion in agency regulations rather than the FAR.

4. Frequency of Nondefense Agency Compliance Certifications

Comment: The commenter sees no benefit in adhering to an ``annual'' fiscal year self-certification requirement that ensures a nondefense agency is compliant with defense procurement requirements. The commenter recommends, as a means of eliminating non-value-added paperwork for all parties and procurement delays, that DoD seek approval to change the nondefense agency self-certification requirement from ``each fiscal year'' to ``every five years.''

Response: The annual certification requirement for nondefense agencies that acquire supplies and services on behalf of DoD included in FAR subpart 17.7 is prescribed by law. The suggestion submitted by the commenter requires a statutory change that is beyond the scope of this FAR case.

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. 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. 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:

Implementation of section 801 of the NDAA for FY 2008 (Pub. L. 110-181), section 806 of the NDAA for FY 2010 (Pub. L. 111-84), section 817 of the NDAA for FY 2012 (Pub. L. 112-81), and section 801 of the NDAA for FY 2013 (Pub. L. 112-239) address requirements specific to the acquisition of property and services by non-defense agencies on behalf of DoD, and are therefore, internal to the Government.

However, this rule also amends the FAR to include a clarification at 4.603(c), restating existing Office of Federal Procurement Policy (OFPP) and Federal Procurement Data System (FPDS) policy regarding the allocation of socio-economic credit for assisted acquisitions, i.e., ``for assisted acquisitions, the requesting agency will receive socio-economic credit for meeting small business goals, where applicable.''

Although we do not expect the clarification to have a direct economic impact on a substantial number of small entities, there is the possibility that the regulatory clarification may improve the accuracy of FPDS data submissions allocating socio-economic credit to agencies for contracts and orders awarded to a substantial number of small entities. Improved data accuracy can have a positive impact on agencies' annual small business goals.

The interim rule was published as part of FAC 2005-62 on November 20, 2012 (77 FR 69720). None of the comments received concerned the initial regulatory flexibility analysis.

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 4 and 17

Government procurement.

Dated: June 13, 2013.

William Clark,

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

Interim Rule Adopted as Final With Changes

Accordingly, the interim rule amending 48 CFR parts 4 and 17, which was published in the Federal Register at 77 FR 69720, November 20, 2012, is adopted as final with the following change:

PART 17--SPECIAL CONTRACTING METHODS

1. The authority citation for 48 CFR part 17 continues to read as follows:

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

2. Amend section 17.703 by--

a. Removing from paragraph (a) and the introductory text of paragraph (b) ``with defense'' and adding ``with applicable'' in its place; and

b. Revising paragraph (b)(2).

The revised text reads as follows:

17.703 Policy.

* * * * *

(b) * * *

(2) Laws and regulations that apply to procurements of supplies and services made by DoD through other Federal agencies, including DoD financial management regulations, the Defense Federal Acquisition Regulation Supplement (DFARS), DoD class deviations, and the DFARS Procedures, Guidance, and Information (PGI). (The DFARS, DoD class deviations, and PGI are accessible at: http://www.acq.osd.mil/dpap/dars).

* * * * *

[FR Doc. 2013-14613 Filed 6-20-13; 8:45 am]

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[Federal Register Volume 78, Number 120 (Friday, June 21, 2013)]

[Rules and Regulations]

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

[FR Doc No: 2013-14614]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 12, 13, 32, 43, and 52

[FAC 2005-67; FAR Case 2013-005; Item V; Docket 2013-0005, Sequence 1]

RIN 9000-AM45

Federal Acquisition Regulation; Terms of Service and Open-Ended Indemnification, and Unenforceability of Unauthorized Obligations

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

ACTION: Interim rule.

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SUMMARY: DoD, GSA, and NASA are issuing an interim rule amending the Federal Acquisition Regulation (FAR) to address concerns raised in an opinion from the U.S. Department of Justice (DOJ) Office of Legal Counsel (OLC) involving the use of unrestricted, open-ended indemnification clauses in acquisitions for social media applications.

DATES: Effective Date: June 21, 2013.

Comment Date: Interested parties should submit written comments to the Regulatory Secretariat at one of the addresses shown below on or before August 20, 2013 to be considered in the formation of the final rule.

ADDRESSES: Submit comments identified by FAC 2005-67, FAR Case 2013-005, by any of the following methods:

Regulations.gov: http://www.regulations.gov. Submit comments via the Federal eRulemaking portal by searching for ``FAR Case 2013-005''. Select the link ``Submit a Comment'' that corresponds with ``FAR Case 2013-005.'' Follow the instructions provided at the ``Submit a Comment'' screen. Please include your name, company name (if any), and ``FAR Case 2013-005'' on your attached document.

Fax: 202-501-4067.

Mail: U.S. General Services Administration, Regulatory

Secretariat Division (MVCB), ATTN: Hada Flowers, 1800 F Street NW., 2nd

Floor, Washington, DC 20405.

Instructions: Please submit comments only and cite FAC 2005-67, FAR Case 2013-005, in all correspondence related to this case. All comments received will be posted without change to http://www.regulations.gov, including any personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT: Ms. Marissa Petrusek, Procurement

Analyst, at 202-501-0136 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-67, FAR Case 2013-005.

SUPPLEMENTARY INFORMATION:

I. Background

In a recent opinion, DOJ's OLC noted that the Anti-Deficiency Act (31 U.S.C. 1341) is violated when a Government contracting officer or other employee with authority to bind the Government agrees, without statutory authorization or other exception, to an open-ended, unrestricted indemnification clause. See the March 27, 2012, Memorandum for the Assistant General Counsel for Administration, United States Department of Commerce, available at http://www.justice.gov/olc/2012/aag-ada-impls-of-consent-by-govt-empls.pdf. This opinion states that the Anti-Deficiency Act is violated under some circumstances when consent is given by a Government employee to online terms of service agreements containing an open-ended indemnification clause. The amendments made by this rule are designed to prevent violations such as those mentioned above, and other similar types of violations, from occurring in future Federal contracts.

The OLC opinion discusses a situation where a Government purchase card holder consents to an online terms of service (TOS) agreement in the course of registering for an account with a social media application on the Internet that holds the provider of the service harmless in the event harm is caused to a third party when the application is used by the Government. OLC explained that an Anti-Deficiency Act violation has occurred because an agency's agreement to an open-ended indemnification clause could result in the agency's legal liability for an amount in excess of the agency's appropriation.

On April 4, 2013, the Office of Management and Budget (OMB) issued guidance outlining a series of management actions to ensure agencies act in compliance with the Anti-Deficiency Act and in accordance with OLC's opinion. See OMB Guidance M-13-10, Antideficiency Act Implications of Certain Online Terms of Service Agreements, available at http://www.whitehouse.gov/sites/default/files/omb/memoranda/2013/m-13-10.pdf. These actions include consultation with agency counsel and review of a GSA-maintained list of social media applications governed by TOS agreements that are compatible with Federal law, regulation, and practice. The due diligence steps described in OMB's guidance are designed to minimize disruption to agencies' continued use of social media products in support of initiatives that promote greater openness, transparency, and citizen engagement.

As a further step to help agencies maintain their ability to purchase social media products, OMB called on the Federal Acquisition Regulatory Council (FAR Council) to promptly develop appropriate Governmentwide regulations to address the risk of an Anti-Deficiency Act violation indentified in OLC's opinion. Such action is necessary to facilitate a consistent approach across agencies for ensuring that future Federal contract actions do not involve the type of open-ended indemnification provisions discussed in OLC's opinion that give rise to Anti-Deficiency Act violations.

This interim rule focuses only on open-ended indemnification clauses to address the concern raised in OLC's opinion. However, there are also other clauses in commercial End User License Agreement (EULA) and TOS that could result in a violation of the Anti-Deficiency Act if executed by a contracting officer. For instance, a clause that automatically renews a contract, such as for subscription services, at its expiration would violate the Anti-Deficiency Act if it obligated the Government to pay for supplies or services in advance of the agency's appropriation. Additional coverage may be necessary to address these other instances of potential Anti-Deficiency Act (and other Federal law) violations.

II. Discussion and Analysis

This FAR case amends FAR parts 12, 13, 32, 43, and 52 to provide additional guidance and clauses to address OLC's opinion with respect to purchases containing an EULA, TOS, or other similar agreement containing an indemnification provision.

The objective of the interim rule is to clarify that the inclusion of an open-ended indemnification clause in a EULA, TOS, or other agreement, is not binding on the Government unless expressly authorized by law, and shall be deemed to be stricken from the EULA, TOS, or similar legal instrument or agreement.

Many supplies or services are acquired subject to supplier license agreements. These are particularly common in information technology acquisitions, but they may apply to any supply or service. For example, computer software and services delivered through the internet (web services) are often subject to license agreements, referred to as EULA, TOS, or other similar legal instruments or agreements. FAR 12.216 and 32.705, Unenforceability of Unauthorized Obligations, are added to provide that many of these agreements contain indemnification clauses that are inconsistent with Federal law and unenforceable, but which could create a violation of the Anti-Deficiency Act (31 U.S.C. 1341) if agreed to by the Government.

FAR 13.202, Unenforceability of unauthorized obligations in micro-purchases, is added to require the clause at 52.232-39, Unenforceability of Unauthorized Obligations, to automatically apply to any micro-purchase, to prevent violations of the Anti-Deficiency Act.

The clause at FAR 52.212-4, Contract Terms and Conditions--Commercial Items, is modified and clause 52.232-39, Unenforceability of Unauthorized Obligations, is added, to address situations when there is an unrestricted, open-ended indemnification provision in EULA, TOS, or similar legal instruments or agreements. The changes clarify that if a EULA, TOS, or similar legal instrument or agreement, includes a clause requiring the Government to indemnify the contractor or any person or entity for damages, costs, or fees, or any other loss or liability that would create an Anti-Deficiency Act violation, such clause is unenforceable against the Government, and is deemed to be stricken from the agreement to prevent violations of the Anti-Deficiency Act.

FAR 12.302 is revised to prevent the contracting officer from tailoring the Unauthorized Obligation paragraph. The Unauthorized Obligation paragraph is added to the Order of Precedence paragraph at paragraph 52.212-4(s)(2).

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. 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. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

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, as noted in the OLC opinion, it has always been unenforceable for a contracting officer or other employee with the authority to bind the Government to agree to an open-ended, unrestricted indemnification clause, and the FAR is merely being revised to reflect this. However, an Initial Regulatory Flexibility Analysis has been performed and is summarized as follows:

This interim rule is required to address an opinion by the U.S. Department of Justice Office of Legal Counsel. The changes clarify that if a EULA, TOS, or similar legal instrument or agreement, includes a clause requiring the Government to indemnify the contractor or any person or entity for damages, costs, or fees, or any other loss or liability that would create an Anti-Deficiency Act violation, such clause is unenforceable against the Government, and is deemed to be stricken from the agreement to prevent violations of the Anti-Deficiency Act.

The objective of the interim rule is to clarify that the inclusion of an open-ended indemnification clause in a EULA, TOS, or other agreement, is not binding on the Government unless expressly authorized by statute and specifically authorized under applicable agency regulations and procedures, and shall be deemed to be stricken from the EULA, TOS, or similar legal instrument or agreement.

This rule will impact entities that contract with the Government who have EULAs or TOS containing an indemnification clause.

This rule will impact all small entities with a supply or service contract subject to a supplier license agreement. However, there is no record keeping or reporting requirement. There may be a small beneficial impact on small entities because these revisions to the FAR will help save time and streamline processes since small entities will no longer have to individually renegotiate, on a prospective basis, a EULA, TOS, or similar agreement containing an indemnification provision. Further, clauses like open-ended, unrestricted indemnification clauses, have generally been unenforceable against the Government, unless expressly authorized by statute, and the FAR is being revised to reflect this.

The Councils estimate that this rule will impact approximately 3,538 small entities. Many supplies or services are acquired subject to supplier license agreements. These are particularly common in information technology acquisitions, but they may apply to any supply or service. The Councils believe the majority of the information technology purchases associated with this rule will be purchased through the GSA Information Technology Schedule 70 contracts. As such, the Councils used, as a basis for the estimate, the number of GSA Information-Technology Schedule 70 vendors, plus an estimate for contractors other than information technology acquisitions.

There are currently 4,988 GSA Information-Technology Schedule 70 vendors. The Councils estimate that this rule will impact 75 percent, or 3,741 of those vendors because they have EULAs or TOS in their Government contracts. Of those affected entities, it is estimated that around 86 percent, or 3,217, will be small entities. The Councils estimate that approximately 10 percent or 321 more small entities across the Government for information technology acquisitions and for other than information-technology acquisition whose Government contracts include EULAs or TOS will be impacted. As a result it is estimated that this rule will impact approximately 3,538 small entities.

The Councils do not anticipate an impact on small entities in acquisitions conducted through Government purchase cards. This is because the rule does not require entities to negotiate or change their agreement language.

The rule does not duplicate, overlap, or conflict with any other Federal rules.

The Councils did not identify any significant alternatives that would appropriately address the DOJ opinion. Steps have been taken in this interim rule to minimize the impact on small entities which help to save them time and streamline their processes; for example, this would greatly reduce the requirement to negotiate all EULAs, TOS, or similar arrangements on a case-by-case basis.

The Regulatory Secretariat has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat. DoD, GSA and NASA invite comments from small business concerns and other interested parties on the expected impact of this rule on small entities.

DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by this rule consistent with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (FAC 2005-67, FAR Case 2013-005) in correspondence.

V. Paperwork Reduction Act

The interim 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).

VI. Determination To Issue an Interim Rule

A determination has been made under the authority of the Secretary of Defense (DoD), the Administrator of General Services (GSA), and the Administrator of the National Aeronautics and Space Administration (NASA) that urgent and compelling reasons exist to promulgate this interim rule without prior opportunity for public comment. As OMB explains in its guidance to agencies regarding the OLC opinion, an interim rule is necessary to allow agencies to continue with acquisitions using TOS or EULAs and minimize disruption to the timely acquisition of supplies and services needed to accomplish critical requirements that may otherwise arise unless immediate steps are taken to provide regulatory guidance to help them avoid future violations of the Anti-Deficiency Act. OLC's opinion, which was originally provided to the Department of Commerce on March 27, 2012, was released on November 15, 2012, putting agencies on notice at that time of the potential risk of violation and creating a need for this prompt Government-wide action to avoid future noncompliance with the Act and any associated adverse impacts to Federal missions or personnel.

This Government-wide rule will facilitate a consistent approach across agencies for addressing OLC's opinion and avoid the potential burden and cost contractors might otherwise incur in having to negotiate contract terms with each agency. The rule has been narrowly crafted to address only the specific concerns identified in the OLC opinion and OMB memorandum and to minimize changes that are promulgated without prior public comment on this subject.

Pursuant to 41 U.S.C. 1707 and FAR 1.501-3(b), DoD, GSA, and NASA will consider public comments received in response to this interim rule in the formation of the final rule.

List of Subjects in 48 CFR Parts 12, 13, 32, 43, and 52

Government procurement.

Dated: June 13, 2013.

William Clark,

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

Therefore, DoD, GSA, and NASA amend 48 CFR parts 12, 13, 32, 43, and 52 as set forth below:

1. The authority citation for 48 CFR parts 12, 13, 32, 43, and 52 are 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 12--ACQUISITION OF COMMERCIAL ITEMS

2. Amend section 12.102 by revising paragraph (e)(4) to read as follows:

12.102 Applicability.

* * * * *

(e) * * *

(4) Using the Governmentwide commercial purchase card as a method of purchase rather than only as a method of payment; or

* * * * *

3. Add section 12.216 to read as follows:

12.216 Unenforceability of unauthorized obligations.

Many supplies or services are acquired subject to supplier license agreements. These are particularly common in information technology acquisitions, but they may apply to any supply or service. For example, computer software and services delivered through the internet (web services) are often subject to license agreements, referred to as End User License Agreements (EULA), Terms of Service (TOS), or other similar legal instruments or agreements. Many of these agreements contain indemnification clauses that are inconsistent with Federal law and unenforceable, but which could create a violation of the Anti-Deficiency Act (31 U.S.C. 1341) if agreed to by the Government. Paragraph (u) of the clause at 52.212-4 prevents any such violations.

4. Amend section 12.302 by revising paragraphs (b)(5) and (b)(6); and adding a new paragraph (b)(7) to read as follows:

12.302 Tailoring of provisions and clauses for the acquisition of commercial items.

* * * * *

(b) * * *

(5) Other compliances;

(6) Compliance with laws unique to Government contracts; and

(7) Unauthorized obligations.

* * * * *

PART 13--SIMPLIFIED ACQUISITION PROCEDURES

13.201 [Amended]

5. Amend section 13.201 by removing from paragraph (d) ``at 32.1110'' and adding ``at 13.202 and 32.1110'' in its place.

13.202 [Redesignated as 13.203]

6. Redesignate section 13.202 as section 13.203; and add a new section 13.202 to read as follows:

13.202 Unenforceability of unauthorized obligations in micro-purchases.

Many supplies or services are acquired subject to supplier license agreements. These are particularly common in information technology acquisitions, but they may apply to any supply or service. For example, computer software and services delivered through the internet (web services) are often subject to license agreements, referred to as End User License Agreements (EULA), Terms of Service (TOS), or other similar legal instruments or agreements. Many of these agreements contain indemnification clauses that are inconsistent with Federal law and unenforceable, but which could create a violation of the Anti-Deficiency Act (31 U.S.C. 1341) if agreed to by the Government. The clause at 52.232-39, Unenforceability of Unauthorized Obligations, automatically applies to any micro-purchase, including those made with the Governmentwide purchase card. This clause prevents such violations of the Anti-Deficiency Act.

PART 32--CONTRACT FINANCING

32.703-2 [Amended]

7. Amend section 32.703-2 by--

a. Removing from paragraph (a) ``see 32.705-1(a)'' and adding ``see 32.706-1(a)'' in its place; and

b. Removing from paragraph (b)(2) ``see 32.705-1(b)'' and adding ``see 32.706-1(b)'' in its place.

32.705 through 32.705-2 [Redesignated as 32.706 through 32.706-2]

8. Redesignate sections 32.705 through 32.705-2 as sections 32.706 through 32-706-2, respectively.

9. Add a new section 32.705 to read as follows:

32.705 Unenforceability of unauthorized obligations.

Many supplies or services are acquired subject to supplier license agreements. These are particularly common in information technology acquisitions, but they may apply to any supply or service. For example, computer software and services delivered through the internet (web services) are often subject to license agreements, referred to as End User License Agreements (EULA), Terms of Service (TOS), or other similar legal instruments or agreements. Many of these agreements contain indemnification clauses that are inconsistent with Federal law and unenforceable, but which could create a violation of the Anti-Deficiency Act (31 U.S.C. 1341) if agreed to by the Government.

10. Add section 32.706-3 to read as follows:

32.706-3 Clause for unenforceability of unauthorized obligations.

The contracting officer shall insert the clause at 52.232-39, Unenforceability of Unauthorized Obligations in all solicitations and contracts.

PART 43--CONTRACT MODIFICATIONS

43.201 [Amended]

11. Amend section 43.201 by removing from paragraph (b) ``see 32.705-2'' and adding ``see 32.706-2'' in its place.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

12. Amend section 52.212-4 by revising the date of the clause and paragraph (s)(2); and adding paragraph (u) to read as follows:

52.212-4 Contract Terms and Conditions--Commercial Items.

* * * * *

Contract Terms and Conditions--Commercial Items (Jun 2013)

* * * * *

(s) * * *

(2) The Assignments, Disputes, Payments, Invoice, Other Compliances, Compliance with Laws Unique to Government Contracts, and Unauthorized Obligations paragraphs of this clause;

* * * * *

(u) Unauthorized Obligations. (1) Except as stated in paragraph (u)(2) of this clause, when any supply or service acquired under this contract is subject to any End User License Agreement (EULA), Terms of Service (TOS), or similar legal instrument or agreement, that includes any clause requiring the Government to indemnify the Contractor or any person or entity for damages, costs, fees, or any other loss or liability that would create an Anti-Deficiency Act violation (31 U.S.C. 1341), the following shall govern:

(i) Any such clause is unenforceable against the Government.

(ii) Neither the Government nor any Government authorized end user shall be deemed to have agreed to such clause by virtue of it appearing in the EULA, TOS, or similar legal instrument or agreement. If the EULA, TOS, or similar legal instrument or agreement is invoked through an ``I agree'' click box or other comparable mechanism (e.g., ``click-wrap'' or ``browse-wrap'' agreements), execution does not bind the Government or any Government authorized end user to such clause.

(iii) Any such clause is deemed to be stricken from the EULA, TOS, or similar legal instrument or agreement.

(2) Paragraph (u)(1) of this clause does not apply to indemnification by the Government that is expressly authorized by statute and specifically authorized under applicable agency regulations and procedures.

* * * * *

13. Amend section 52.213-4 by revising the date of the clause; and adding paragraph (a)(2)(viii) to read as follows:

52.213-4 Terms and Conditions--Simplified Acquisitions (Other Than Commercial Items)

* * * * *

Terms and Conditions--Simplified Acquisitions (Other Than Commercial Items) (Jun 2013)

* * * * *

(a) * * *

(2) * * *

(viii) 52.232-39, Unenforceability of Unauthorized Obligations (JUN 2013).

* * * * *

14. Amend section 52.232-18 by revising the introductory text to read as follows:

52.232-18 Availability of Funds.

As prescribed in 32.706-1(a), insert the following clause:

* * * * *

15. Amend section 52.232-19 by revising the introductory text to read as follows:

52.232-19 Availability of Funds for the Next Fiscal Year.

As prescribed in 32.706-1(b), insert the following clause:

* * * * *

16. Amend section 52.232-20 by revising the introductory text to read as follows:

52.232-20 Limitation of Cost.

As prescribed in 32.706-2(a), insert the following clause. The 60-day period may be varied from 30 to 90 days and the 75 percent from 75 to 85 percent. ``Task Order'' or other appropriate designation may be substituted for ``Schedule'' wherever that word appears in the clause:

* * * * *

17. Amend section 52.232-22 by revising the introductory text to read as follows:

52.232-22 Limitation of Funds.

As prescribed in 32.706-2(b), insert the following clause. The 60-day period may be varied from 30 to 90 days and the 75 percent from 75 to 85 percent. ``Task Order'' or other appropriate designation may be substituted for ``Schedule'' wherever that word appears in the clause:

* * * * *

18. Add section 52.232-39 to read as follows:

52.232-39 Unenforceability of Unauthorized Obligations.

As prescribed in 32.706-3, insert the following clause:

Unenforceability of Unauthorized Obligations (JUN 2013)

(a) Except as stated in paragraph (b) of this clause, when any supply or service acquired under this contract is subject to any End User License Agreement (EULA), Terms of Service (TOS), or similar legal instrument or agreement, that includes any clause requiring the Government to indemnify the Contractor or any person or entity for damages, costs, fees, or any other loss or liability that would create an Anti-Deficiency Act violation (31 U.S.C. 1341), the following shall govern:

(1) Any such clause is unenforceable against the Government.

(2) Neither the Government nor any Government authorized end user shall be deemed to have agreed to such clause by virtue of it appearing in the EULA, TOS, or similar legal instrument or agreement. If the EULA, TOS, or similar legal instrument or agreement is invoked through an ``I agree'' click box or other comparable mechanism (e.g., ``click-wrap'' or ``browse-wrap'' agreements), execution does not bind the Government or any Government authorized end user to such clause.

(3) Any such clause is deemed to be stricken from the EULA, TOS, or similar legal instrument or agreement.

(b) Paragraph (a) of this clause does not apply to indemnification by the Government that is expressly authorized by statute and specifically authorized under applicable agency regulations and procedures.

(End of clause)

[FR Doc. 2013-14614 Filed 6-20-13; 8:45 am]

BILLING CODE 6820-EP-P

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[Federal Register Volume 78, Number 120 (Friday, June 21, 2013)]

[Rules and Regulations]

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

[FR Doc No: 2013-14615]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 15

[FAC 2005-67; FAR Case 2012-018; Item VI; Docket 2012-0018, Sequence 1]

RIN 9000-AM27

Federal Acquisition Regulation; Price Analysis Techniques

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 clarify and give a precise reference in the use of a price analysis technique in order to establish a fair and reasonable price.

DATES: Effective Date: July 22, 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 2005-67, FAR Case 2012-018.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published a proposed rule in the Federal Register at 77 FR 40552 on July 10, 2012, to clarify and pinpoint a reference used in FAR 15.404-1(b)(2)(i). FAR 15.404-1(b)(2) addresses various price analysis techniques and procedures that the Government may use to ensure a fair and reasonable price. One of those techniques at FAR 15.404-1(b)(2)(i) describes the comparison of proposed prices received in response to a solicitation as an example of such techniques and procedures. In its discussion, FAR 15.404-1(b)(2)(i) references 15.403-1(c)(1), which sets forth the various standards of adequate price competition (for exceptions from certified cost or pricing data requirements). However, only FAR 15.403-1(c)(1)(i) (rather than all of 15.403-1(c)(1)) actually addresses the situation when two or more responsible offerors, competing independently, submit priced offers that satisfy the Government's expressed requirement. Since FAR 15.404-1(b)(2)(i) deals only with the price analysis technique of comparing proposed prices received in response to a solicitation, the reference in this section is more appropriately identified as 15.403-1(c)(1)(i), which is more precise (and addresses adequate price competition when proposed prices are received from multiple offerors), in lieu of the existing reference, 15.403-1(c)(1), which is more generalized (and addresses various standards for adequate price competition, including the receipt of proposed prices from multiple offerors).

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

FAR 15.404-1(b)(2)(i) is amended to change the reference in this FAR section from 15.403-1(c)(1) to 15.403-1(c)(1)(i). This change ensures that the revised reference is more precise and directly related to the topic covered in 15.404-1(b)(2)(i).

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. Determination That a Price Is Fair and Reasonable

Comment: One respondent believed that removing the reference to FAR 15.403-1(c)(1) and replacing it with 15.403-1(c)(1)(i) would mean that only one of the three prongs of the definition of adequate price competition could be used to establish that a price is fair and reasonable.

Response: FAR 15.404-1(b)(2) delineates the various price analysis techniques to ensure a fair and reasonable price; 15.404-1(b)(2)(i) describes one of those price analysis techniques, the comparison of proposed prices received in response to a solicitation, and refers to 15.403-1(c)(1) therein. The current reference (to FAR 15.403-1(c)(1)) in this section (15.404-1(b)(1)(2)(i)) was too broad; therefore, this rule changes this reference to 15.403-1(c)(1)(i), which precisely aligns the price analysis technique of comparing multiple proposed prices received in response to a solicitation described in 15.404-1(b)(2)(i) with the adequate price competition standard (for exceptions from certified cost or pricing data requirements) of comparing proposed prices submitted by multiple independent offerors. The other two alternative standards for establishing adequate price competition within the generalized reference FAR 15.403-1(c)(1) (for exceptions from certified cost or pricing data requirements) at 15.403-1(c)(1)(ii) and (iii) do not involve any comparison of proposed prices submitted by multiple offerors. Furthermore, it was illogical to rely on the other two alternative standards of adequate price competition (for exceptions from certified cost or pricing data requirements at FAR 15.403-1(c)(1)(ii) and (iii)) to determine a fair and reasonable price using price analysis techniques and procedures (per the prescription at 15.404-1(b)(2(i)). This is because the determination that the price is fair and reasonable itself is required for these two alternative standards at FAR 15.403-1(c)(1)(ii) and (iii) in order to determine that adequate price competition exists. These two alternative standards of adequate price competition can be used to meet the exceptions from certified cost or pricing data requirements, but only after some form of cost or price analysis has been applied to determine that the price is fair and reasonable; i.e., these two alternative standards of adequate price competition are insufficient by themselves to be used to establish fair and reasonable prices in accordance with price analysis techniques and procedures (per FAR 15.404-1(b)(2)).

2. Justification for Changing FAR Price Analysis Techniques

Comment: One respondent stated that no justification has been provided to support this proposed change to the FAR price analysis techniques. The respondent stated they did not know what supposed problem the proposed rule is intended to address.

Response: The Councils note that this rule does not change the availability of the various price analysis techniques available to the contracting officer. The current FAR reference (to 15.403-1(c)(1)) is a FAR section that discusses various standards for adequate price competition (for exceptions from certified cost or pricing data requirements), including the price analysis technique of comparing two or more proposed prices. The rule simply pinpoints the reference associated with the price analysis technique of comparing proposed prices (described at 15.404-1(b)(2)(i) for determining a fair and reasonable price) with the FAR section (15.403-1(c)(1)(i)) that discusses the comparison of proposed prices submitted by two or more responsible offerors (for determining adequate price competition, one of the standards for exception from certified cost or pricing data requirements). Additionally, it eliminates a possible inconsistency. The current reference (to FAR 15.403-1(c)(1)) in the discussion on price analysis techniques to ensure a fair and reasonable price (at 15.404-1(b)(2)(i)) could be interpreted to mean that the other two alternative standards for adequate price competition (for exceptions from certified cost or pricing data requirements described at 15.403-1(c)(1)(ii) and (iii)) could be used to determine a fair and reasonable price, when, in fact, they cannot. See response to Comment 1, Determination that a price is fair and reasonable.

3. The Promotion of Competition

Comment: One respondent believed that the proposed rule would discourage contracting officers from promoting competition.

Response: This rule does not discourage contracting officers from promoting competition. 10 U.S.C. 2304 and 41 U.S.C. 3301 require, with certain limited exceptions, that contracting officers shall promote and provide for full and open competition in soliciting offers and awarding Government contracts (see FAR 6.101). This rule has no effect on those statutory requirements. Furthermore, there is great emphasis within the Government on obtaining competition, because competition generally results in cost savings to the Government.

4. Expansion of Cost or Pricing Data Requests

Comment: Although one respondent acknowledged that this rule does not alter the current FAR requirements regarding the requesting of certified cost or pricing data, the respondent believed that this FAR change will inevitably lead to contracting officers requesting data other than certified cost or pricing data for a greater number of procurements. According to the respondent, this will impose substantial costs on prospective offerors who will be forced to compile comprehensive cost or pricing data to meet the Government's expansive definition of that term. Compiling these data will also be time consuming which will delay procurements. The respondent also stated that there is no reasonable basis to revert to the broad requirements for submission of cost or pricing data that existed prior to the statutory reforms of the 1990s, including the Federal Acquisition Streamlining Act of 1994.

Response: This rule should not impact the requesting of data other than certified cost or pricing data. FAR 15.403-1(c)(1)(ii) and (iii) already requires determination that the price is reasonable in order for adequate price competition to exist. According to the pricing policy at 15.402, which remains unchanged, contracting officers are directed to obtain only the minimum amount of data necessary to establish a fair and reasonable price, and are directed at FAR 15.403-3(b) to obtain any necessary additional data from sources other than the offeror to the maximum extent practicable.

5. Significant Regulatory Action

Comment: One respondent stated that this proposed rule is a significant regulatory action and should have been subject to review by the Office of Information and Regulatory Affairs (OIRA). The respondent stated that the proposed rule will have an annual effect on the economy of $100 million or will adversely affect a sector of the economy in a material way. The respondent believed that by indicating that the proposed rule merely ``clarifies'' FAR 15.404-1(b)(2)(i), the Councils are subverting the OFPP Act requirements to solicit and provide an opportunity for public comment. The Councils should issue another Federal Register notice that explains the nature and effect of the proposed changes that reasonably solicits public comments on those changes.

Response: The Councils met the requirements of the OFPP Act by publishing the proposed rule and its supporting rationale in the Federal Register for public comment. Furthermore, DoD, GSA, and NASA submit all FAR rules to OIRA for clearance to publish. OIRA determined that the rule was not a significant rule and cleared it for publication without subjecting it to the formal coordination and review under section 6(b) of E.O. 12866. OIRA also concurred that this is not a major rule under 5 U.S.C. 804.

6. Distinction Between Adequate Competition and Adequate Price Competition

Comment: One respondent commented that a reasonableness determination and comparison of prices based upon two or more offers are two different things that require a distinction. The respondent further stated that a price found reasonable is not suitable in all cases to be used for comparison and that this was an opportunity for the FAR to make explicit such a distinction. The respondent recommended that adequate competition be distinguished from adequate price competition.

Response: The Councils take no position on this comment because it is outside the scope of this case, which was limited to clarifying a FAR reference relative to a particular price analysis technique.

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. 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. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

DoD, GSA, and NASA do not expect this final 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 this rule merely clarifies and pinpoints the reference at FAR 15.404-1(b)(2)(i), a discussion on the price analysis technique of comparing two or more proposed prices received in response to the solicitation in order to establish a fair and reasonable price. The original, more generalized reference (to FAR 15.403-1(c)(1)), which describes various standards for adequate price competition (for exceptions from certified cost or pricing data requirements, including comparing proposals from multiple offerors), is changed to the more precise reference, 15.403-1(c)(1)(i), which describes the receipt of multiple offers in response to the solicitation as a standard for adequate price competition. Nevertheless 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:

FAR 15.404-1(b)(2) addresses various price analysis techniques and procedures the Government may use to ensure a fair and reasonable price. FAR 15.404-1(b)(2)(i) discusses the comparison of proposed prices received in response to a solicitation as an example of such techniques and procedures. In this discussion of price analysis techniques, FAR 15.404-1(b)(2)(i) references 15.403-1(c)(1), which sets forth the various standards of adequate price competition (for exceptions from certified cost or pricing data requirements). However, only FAR 15.403-1(c)(1)(i) addresses the situation when two or more responsible offerors, competing independently, submit priced offers that satisfy the Government's expressed requirement, a situation which is consistent with the price analysis technique of comparing proposed prices from multiple offerors. Therefore, the reference in FAR 15.404-1(b)(2)(i) is more appropriately identified as 15.403-1(c)(1)(i), which describes the standard comparing proposed prices received from multiple offerors, rather than the generalized 15.403-1(c)(1), which is broader in scope with various additional standards of adequate price competition.

One comment from an interested party was submitted in response to the Regulatory Flexibility Act request under the proposed rule. The respondent believed that this rule was a significant regulatory action under E.O. 12866 based upon the respondent's interpretation that the rule would constitute a significant change to the pricing regulations in FAR subpart 15.4. However, FAR 15.404-1(b)(2) delineates the various price analysis techniques; 15.404-1(b)(2)(i) describes the comparison of proposed prices received in response to a solicitation. The current reference in this section (to FAR 15.403-1(c)(1)) was too broad; therefore, this rule changes this generalized reference to 15.403-1(c)(1)(i), which precisely aligns the price analysis technique of comparing proposed prices from multiple offerors in 15.404-1(b)(2)(i) (for determining a fair and reasonable price) with the adequate price competition standard of comparing two or more offerors' proposed prices (for exceptions from certified cost or pricing data requirements). The designation of a rule as significant regulatory action under E.O. 12866 is made by the Office of Information and Regulatory Affairs within the Office of Management and Budget, which declined to designate this rule as requiring official review. No comments were filed by the Chief Counsel for Advocacy of the Small Business Administration in response to the rule and no changes were made to the rule.

It is not expected that this rule will 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.; this rule merely clarifies that in order to establish a fair and reasonable price, the reference at FAR 15.404-1(b)(2)(i) (which describes the pricing technique of comparing proposed prices from multiple offerors) shall be the more precise FAR 15.403-1(c)(1)(i) (which describes the standard for adequate price competition when proposed prices are submitted by multiple offerors), rather than the more generalized 15.403-1(c)(1) (which describes various standards for adequate price competition, including comparing proposed prices from multiple offerors).

There are no projected reporting, recordkeeping, or other compliance requirements projected for this rule.

The approach described in the final 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 Subject in 48 CFR Part 15

Government procurement.

Dated: June 13, 2013.

William Clark,

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

Therefore, DoD, GSA, and NASA amend 48 CFR part 15 as set forth below:

PART 15--CONTRACTING BY NEGOTIATION

1. The authority citation for 48 CFR part 15 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.

15.404-1 [Amended]

2. Amend section 15.404-1 by removing from paragraph (b)(2)(i) ``15.403-1(c)(1)'' and adding ``15.403-1(c)(1)(i)'' in its place.

[FR Doc. 2013-14615 Filed 6-20-13; 8:45 am]

BILLING CODE 6820-EP-P

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[Federal Register Volume 78, Number 120 (Friday, June 21, 2013)]

[Rules and Regulations]

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

[FR Doc No: 2013-14616]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 19

[FAC 2005-67; FAR Case 2013-010; Item VII; Docket 2013-0010, Sequence 1]

RIN 9000-AM59

Federal Acquisition Regulation; Contracting With Women-Owned Small Business Concerns

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

ACTION: Interim rule.

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SUMMARY: DoD, GSA, and NASA are issuing an interim rule amending the Federal Acquisition Regulation (FAR) to remove the dollar limitation for set-asides to economically disadvantaged women-owned small business concerns and to women-owned small business concerns eligible under the Women-owned Small Business Program.

DATES: Effective Date: June 21, 2013.

Comment Date: Interested parties should submit written comments to the Regulatory Secretariat on or before August 20, 2013 to be considered in the formulation of a final rule.

ADDRESSES: Submit comments identified by FAC 2005-67, FAR Case 2013-010, by any of the following methods:

Regulations.gov: http://www.regulations.gov. Submit

comments via the Federal eRulemaking portal by searching for ``FAR Case 2013-010''. Select the link ``Submit a Comment'' that corresponds with ``FAR Case 2013-010.'' Follow the instructions provided at the ``Submit a Comment'' screen. Please include your name, company name (if any), and ``FAR Case 2013-010'' on your attached document. Fax: 202-501-4067.

Mail: U.S. General Services Administration, Regulatory Secretariat Division (MVCB), ATTN: Hada Flowers, 1800 F Street NW., 2nd Floor, Washington, DC 20405.

Instructions: Please submit comments only and cite FAC 2005-67, FAR Case 2013-010, in all correspondence related to this case. All comments received will be posted without change to http://www.regulations.gov, including any personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT: Mr. Karlos Morgan, Procurement Analyst, at 202-501-2364, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-67, FAR Case 2013-010.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA are issuing an interim rule amending the FAR, to implement section 1697 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2013, Public Law 112-239, which amended section 8(m) of the Small Business Act, (15 U.S.C. 637(m)). Section 8(m) of the Small Business Act sets forth the Procurement Program for Women-owned Small Business Concerns, which is the statutory authority for SBA's Women-owned Small Business Federal Contract Program. Section 1697 of the NDAA for FY 2013 amended section 8(m) by removing the dollar limitation for set-asides. The dollar limit (as increased for inflation--see FAR 1.109) for acquisitions in the manufacturing industries, was $6.5 million or less (including options), and in the case of all other acquisitions, $4 million or less (including options).

Pursuant to this statutory change and in conformance with the Small Business Administration's (SBA's) revised regulations at 13 CFR 127.503(a)(2) and 127.503(b)(2), (see SBA's interim final rule published in the Federal Register at 78 FR 26504, on May 7, 2013), this rule amends FAR 19.1505(b) and (c) by removing the dollar limitations on the anticipated award price of contracts to economically disadvantaged women-owned small business (EDWOSB) concerns or women-owned small business (WOSB) concerns eligible under the WOSB Program. As a result, contracting officers may set aside acquisitions for competition restricted to EDWOSB concerns or WOSB concerns eligible under the WOSB Program at any dollar level above the micro-purchase threshold, provided the other requirements for a set-aside under the WOSB Program are met.

II. 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. 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. This rule is not a major rule under 5 U.S.C. 804.

III. Regulatory Flexibility Act

The change 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 Initial Regulatory Flexibility Analysis (IRFA) is summarized as follows:

The objective of this interim rule is to remove language in the FAR that restricts set-asides to economically disadvantaged women-owned small business (EDWOSB) concerns and to women-owned small business concerns eligible under the women-owned small business (WOSB) Program, in industries that are underrepresented or substantially underrepresented by women-owned small business concerns. The dollar limits (as increased for inflation--see FAR 1.109) are currently $6.5 million (including options) for acquisitions in manufacturing industries and $4 million (including options) for all other acquisitions. The legal basis for this interim rule is section 1697 of the National Defense Authorization Act for Fiscal Year 2013, Public Law 112-239, which amended the statutory limitations at section 8(m) of the Small Business Act, (15 U.S.C. 637(m)), by permanently removing these limitations.

Analysis of the Federal Procurement Data System from April 1, 2011 (the implementation date of the WOSB Program) through January 1, 2013, reveals there are approximately 26,712 WOSB concerns, including 131 EDWOSB concerns and 388 women-owned small business concerns eligible under the WOSB Program, that received obligated funds from Federal contract awards, task or delivery orders, and modifications to existing contracts. This interim rule may have a significant positive economic impact on EDWOSB concerns competing for contracting opportunities in industries determined by SBA to be underrepresented by women-owned small business concerns and may positively affect WOSB concerns eligible under the WOSB Program competing in industries determined by SBA to be substantially underrepresented by women-owned small business concerns, since removing the dollar threshold for set-asides under the WOSB Program will provide greater access to Federal contracting opportunities. However, this rule may have a negative effect on firms that are women-owned but are not WOSB Program participants and small businesses that are not owned by women (i.e., small business concerns that are not 51 percent owned and controlled by women), because those firms may now be excluded from competition on some acquisitions that could not be set aside for EDWOSB concerns or WOSB concerns eligible under the WOSB Program due to the dollar thresholds and now will be set aside.

This interim rule does not impose new recordkeeping or reporting requirements. The rule does not duplicate, overlap, or conflict with any other Federal rules. There are no alternatives to the rule which would accomplish the stated objectives of the statute.

The Regulatory Secretariat has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat. DoD, GSA, and NASA invite comments from small business concerns and other interested parties on the expected impact of this rule on small entities.

DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (FAC 2005-67, FAR Case 2013-010), in correspondence.

IV. Paperwork Reduction Act

The interim 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).

V. Determination To Issue an Interim Rule

A determination has been made under the authority of the Secretary of Defense (DoD), the Administrator of General Services (GSA), and the Administrator of the National Aeronautics and Space Administration (NASA) that urgent and compelling reasons exist to promulgate this interim rule without prior opportunity for public comment. This action is necessary in order to avoid conflicting guidance between the two primary regulations used by the Federal acquisition community to implement the WOSB Program, the Small Business Regulations and the FAR.

Section 1697 of the NDAA for Fiscal Year 2013 (Publ. Law 112-239) was enacted by Congress and became effective on January 2, 2013. In response to this statutory change, the Small Business Administration issued an interim final rule published in the Federal Register at 78 FR 26504, on May 7, 2013, amending 13 CFR 127.503(a)(2) and 127.503(b)(2) to remove the anticipated contract dollar thresholds for determining when the contracting officer may set aside a requirement for economically disadvantaged women-owned small business (EDWOSB) concerns and/or WOSB concerns eligible under the WOSB Program. As a result, the FAR must also be amended at 19.1505(b)(2) and 19.1505(c)(2) to remove the anticipated award thresholds for EDWOSB concerns and WOSB concerns eligible under the WOSB Program, in order to minimize the risk of disseminating conflicting guidance to the Federal acquisition community.

In addition, by issuing an interim rule that is effective upon publication, prior to the receipt of public comment, agencies can immediately begin taking advantage of having no dollar limitations for set-asides to EDWOSB or WOSB concerns eligible under the WOSB Program, as envisioned by section 1697.

However, pursuant to 41 U.S.C. 1707 and FAR 1.501-3(b), DoD, GSA, and NASA will consider public comments received in response to this interim rule in the formation of the final rule.

List of Subject in 48 CFR Part 19

Government procurement.

Dated: June 13, 2013.

William Clark,

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

Therefore, DoD, GSA, and NASA amend 48 CFR part 19 as set forth below:

PART 19--SMALL BUSINESS PROGRAMS

1. The authority citation for 48 CFR part 19 continues to read as follows:

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

19.1505 [Amended]

2. Amend section 19.1505 by--

a. Adding to the end of paragraph (b)(1) ``and'';

b. Removing paragraph (b)(2);

c. Redesignating paragraph (b)(3) as (b)(2);

d. Adding to the end of paragraph (c)(1) ``and'';

e. Removing paragraph (c)(2);

f. Redesignating paragraph (c)(3) as (c)(2); and

g. Removing from paragraph (g)(3) ``appeal, that there are urgent'' and adding ``appeal, unless the head of the agency makes a written determination that urgent'' in its place.

[FR Doc. 2013-14616 Filed 6-20-13; 8:45 am]

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[Federal Register Volume 78, Number 120 (Friday, June 21, 2013)]

[Rules and Regulations]

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

[FR Doc No: 2013-14617]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 25

[FAC 2005-67; FAR Case 2013-008; Item VIII; Docket 2013-0008, Sequence 1]

RIN 9000-AM54

Federal Acquisition Regulation; Deletion of Report to Congress on Foreign-Manufactured Products

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 eliminate an obsolete Congressional reporting requirement on acquisitions of end products manufactured outside the United States.

DATES: Effective Date: July 22, 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 2005-67, FAR Case 2013-008.

SUPPLEMENTARY INFORMATION:

I. Background

This final rule amends FAR 25.001 and 25.004 to eliminate an obsolete Congressional reporting requirement imposed by the United States Troops Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 (41 U.S.C. 8302(b)(1)).

This Act required the heads of each Federal agency to submit a report to Congress on acquisitions of articles, materials, or supplies that are manufactured outside the United States for Fiscal Year 2007 through Fiscal Year 2011. The report to Congress is no longer required but the collection of the data in the Federal Procurement Data System is still required (see FAR 52.225-18, Place of Manufacture).

II. Discussion and Analysis

``Publication of proposed regulations'', 41 U.S.C. 1707, is the statute which applies to the publication of the Federal Acquisition Regulation. Paragraph (a)(1) of the statute requires that a procurement policy, regulation, procedure or form (including an amendment or modification thereof) must be published for public comment if it has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment, because this rule serves to eliminate a reporting requirement that only affected the internal operating procedures of the Government.

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. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

The Regulatory Flexibility Act does not apply to this rule because this final rule does not constitute a significant FAR revision within the meaning of FAR 1.501-1 and 41 U.S.C. 1707 and does not require publication for public comment.

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 Subject in 48 CFR Part 25

Government procurement.

Dated: June 13, 2013.

William Clark,

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

Therefore, DoD, GSA, and NASA amend 48 CFR part 25 as set forth below:

PART 25--FOREIGN ACQUISITION

1. The authority citation for 48 CFR part 25 continues to read as follows:

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

25.001 [Amended]

2. Amend section 25.001 by--

a. Removing from the introductory text of paragraph (c) ``report on end products manufactured outside the United States (see 25.004)'' and adding ``representation on end products manufactured outside the United States (see 52.225-18)'' in its place; and

b. Removing from paragraph (c)(3) ``For the reporting requirement at 25.004'' and adding ``For the representation at 52.225-18'' in its place.

25.004 [Removed]

3. Remove section 25.004.

[FR Doc. 2013-14617 Filed 6-20-13; 8:45 am]

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[Federal Register Volume 78, Number 120 (Friday, June 21, 2013)]

[Rules and Regulations]

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

[FR Doc No: 2013-14618]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 25 and 52

[FAC 2005-67; FAR Case 2012-027; Item IX; Docket 2012-0027, Sequence 1]

RIN 9000-AM43

Federal Acquisition Regulation; Free Trade Agreement (FTA)-Panama

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, without change, an interim rule amending the Federal Acquisition Regulation (FAR) to implement the United States-Panama Trade Promotion Agreement. This Trade Promotion Agreement is a free trade agreement that provides for mutually non-discriminatory treatment of eligible products and services from Panama.

DATES: Effective Date: June 21, 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 2005-67, FAR Case 2012-027.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published an interim rule in the Federal Register at 77 FR 69723, on November 20, 2012, to implement the United States-Panama Trade Promotion Agreement. The comment period closed on January 22, 2013. Two respondents submitted comments on the interim rule.

The interim rule added Panama to the definition of ``Free Trade Agreement country'' in multiple locations in the FAR. The Panama FTA covers acquisitions of supplies and services equal to or exceeding $202,000. The threshold for the Panama FTA is $7,777,000 for construction contracts. The Panama FTA threshold for supplies and services is higher than the threshold for supplies and services for most of the FTAs ($77,494), and equals the Bahrain, Morocco, Oman, and Peru FTA thresholds for supplies and services ($202,000). The excluded services for the Panama FTA are the same as for the Bahrain FTA, Dominican Republic--Central American FTA, Chile FTA, Colombia FTA, NAFTA, Oman FTA, and Peru FTA.

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

The Councils have adopted the interim rule as final without change.

B. Analysis of Public Comments

1. Need for Separate Defense Federal Acquisition Regulation Supplement (DFARS) Rule

Comment: One respondent commented that they were concerned about the necessity of the interim rule, under Executive Orders 12866 and 13563, for a separate, redundant DFARS rule for the Free Trade Agreement.

Response: Implementation of trade agreements in the FAR is necessary for broad government-wide application of the trade agreements. DoD needs its unique provisions and clauses to cover Buy American and trade agreements because of unique requirements. One of the most significant reasons is the need to address the products of qualifying countries (those countries with which DoD has a Reciprocal Defense Procurement Memorandum of Understanding or other International Agreement). In addition, the Oman FTA and the Israeli Trade Agreement do not apply to DoD acquisitions. There are also statutory and policy determinations that impact DoD acquisitions of the products of Iraq and Afghanistan and other countries in the region (South Caucasus and Central and South Asia). DoD also continues to implement the Balance of Payments Program, applying the principles of the Buy American statute to acquisitions of goods for use outside the United States. Therefore, DoD has never been able to rely on promulgation of Free Trade Agreements solely within the FAR.

2. Information Collection Requirement

Comment: One respondent was further concerned that the information collection requirement is not negligible as characterized by the DFARS interim rule. According to the respondent, the DFARS requirement will require costly duplicate reporting in order to maintain compliance and is therefore not negligible.

Response: The Federal Register preamble for the FAR and DFARS rules did not state that the information collection requirement relating to Free Trade Agreements was negligible. The statement was that the change caused by adding Panama as a Free Trade Agreement country is negligible. There are approved burdens for the FAR Buy American and trade provisions under OMB clearance numbers 9000-0025, 9000-0130, 9000-0136, and 9000-0141. There are also burden hours approved for DoD acquisitions subject to Buy American or trade agreements under OMB clearance number 0704-0229. The DFARS requirement does not cause duplicate reporting, because no solicitation should include both the FAR and the DFARS Buy American and/or trade agreements provision. The DFARS provisions are used in lieu of the FAR provisions.

3. Access Through Canal and Security for Cargo

Comment: One respondent commented that we should work with other companies for joint economic development projects and, as to Panama, make certain that the agreements provide that we will have continued access through the canal and the necessary security for our cargo.

Response: The Council takes no position on this comment because it is outside the scope of this case, which was limited to implementing the United States-Panama Trade Promotion Agreement. The Office of the United States Trade Representative negotiates the treaties, which are then implemented in law by Congress.

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. 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. 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 although the rule now opens up Government procurement to the goods and services of Panama, 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 DFARS 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.

V. 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 OMB 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 Panama would be listed under.

List of Subjects in 48 CFR Parts 25 and 52

Government procurement.

Dated: June 13, 2013.

William Clark,

Acting 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 25 and 52, which was published in the Federal Register at 77 FR 69723, on November 20, 2012, is adopted as a final rule without change.

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

[FR Doc. 2013-14618 Filed 6-20-13; 8:45 am]

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[Federal Register Volume 78, Number 120 (Friday, June 21, 2013)]

[Rules and Regulations]

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

[FR Doc No: 2013-14619]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 31

[FAC 2005-67; FAR Case 2011-019; Item X; Docket 2011-0019, Sequence 1]

RIN 9000-AM23

Federal Acquisition Regulation; Updated Postretirement Benefit

(PRB) References

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 remove references to specific paragraphs of an accounting standard that were deleted in the Financial Accounting Standards Board's (FASB's) Accounting Standards Codification (ASC) of Generally Accepted Accounting Principles (GAAP). The references no longer exist in the authoritative GAAP (the ASC). This final rule replaces the current GAAP references in the FAR with explicit criteria that generally replicate the substance of the formerly referenced GAAP methodology so that the substance of the FAR does not change as a result of this final rule.

DATES: Effective Date: July 22, 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 2005-67, FAR Case 2011-019.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published a proposed rule in the Federal Register at 77 FR 29305 on May 17, 2012, to replace the obsolete references to paragraphs 110, 112, and 113 of Financial Accounting Standard (FAS) 106 (provisions of GAAP that no longer exist) in FAR 31.205-6(o)(2)(iii)(A)(1) with explicit criteria that generally replicate the GAAP methodology detailed in the deleted paragraphs. This revision is intended to allow a general continuation for FAR purposes (for PRB costs for Government contract cost accounting) of the now-obsolete GAAP delayed recognition method for contractors that move from a pay-as-you-go method of accounting to an accrual basis of accounting.

In June of 2009, the FASB announced, in its Statement Number 168, that effective for financial statements issued for interim and annual periods ending after September 15, 2009, the ASC would become the source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. The FASB stated that this codification supersedes existing references in U.S. GAAP.

The now-superseded GAAP provisions in FAR 31.205-6(o)(2)(iii)(A)(1) referenced the description of ``transition obligation'' in paragraph 110 of FAS 106 and the ``delayed recognition methodology'' in paragraphs 112 and 113, also of FAS 106.

These references to FAS 106 in the cost principle were added in FAR Case 91-42, published in the Federal Register at 56 FR 41738 on August 22, 1991. At the time, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) decided not to allow contractors to claim the entire ``transition obligation'' associated with their initial application of FAS 106 as an allowable cost in accordance with the ``immediate recognition'' procedure in (the now-superseded) paragraph 111 of FAS 106. (The transition obligation associated with initial application of FAS 106 is referred to hereafter as the ``initial application transition obligation.'') Therefore, the Councils disallowed costs for the amortization of the initial application transition obligation in excess of the amount amortized using the delayed recognition method procedure in (the now-superseded) paragraphs 112 and 113 of FAS 106.

As a result of the FASB announcement that the ASC is now the source of the authoritative U.S. GAAP, the Councils note that the references to paragraphs 111, 112, and 113, respectively, of FAS 106 (for the immediate and delayed recognition procedures for the initial application transition obligation), are no longer valid because FAS 106 no longer exists in the authoritative GAAP (the ASC). When the FASB recodified FAS 106 into the ASC, paragraphs 111 through 114 were not included because public companies recognized the transition obligation in the first fiscal period beginning after December 15, 1994, or shortly thereafter if exempted from the initial effective date. While the existing provision at FAR 31.205-6(o)(2)(iii)(A)(1) remains in force because the referenced GAAP paragraphs can be found in the historical accounting literature, the passage of time raises concerns that the text of these paragraphs may become less readily available. The Councils conclude, therefore, that explicit criteria that generally replicates the substance of the formerly referenced GAAP methodology are needed for determining the allowability of the transition obligation, when converting from pay-as-you-go accounting for PRBs to an accrual method of accounting for the purposes of Government contract cost accounting, as they do not intend to change the substance of the FAR.

The Councils acknowledge that contractors may continue to propose (as they have in the past) a change to their Government contract cost accounting practice whereby the ``pay-as-you-go'' method is replaced by the ``accrual'' method, and this may give rise to a transition obligation that is similar in its nature, but not its amount, to the initial application transition obligation that arose when (now-superseded) FAS 106 first became applicable in the early 1990's for financial reporting purposes.

II. Discussion and Analysis

DoD, GSA, and NASA received no comments on the proposed rule and are therefore issuing the rule as final with minor changes from the proposed rule.

III. Executive Orders 12866 and 13563

Executive Orders 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). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

DoD, GSA, and NASA 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 the rule only removes references to specific paragraphs in an accounting standard that were deleted in the Financial Accounting Standards Board's (FASB's) Accounting Standards Codification (ASC) of Generally Accepted Accounting Principles (GAAP) and replaces them with explicit criteria that generally replicate the substance of the formerly referenced GAAP methodology (i.e., the substance of the FAR did not change as a result of this final rule). No comments from small entities were received in response to the Regulatory Flexibility Act request under the proposed rule.

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 Subject in 48 CFR Part 31

Government procurement.

Dated: June 13, 2013.

William Clark,

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

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

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

1. The authority citation for 48 CFR part 31 continues to read as follows:

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

2. Amend section 31.205-6 by revising paragraph (o)(2)(iii)(A) to read as follows:

31.205-6 Compensation for personal services.

* * * * *

(o) * * *

(2) * * *

(iii) * * *

(A) Be measured and assigned in accordance with one of the following two methods described under paragraphs (o)(2)(iii)(A)(1) or (o)(2)(iii)(A)(2) of this subsection:

(1) Generally accepted accounting principles. However, transitions from the pay-as-you-go method to the accrual accounting method must be handled according to paragraphs (o)(2)(iii)(A)(1)(i) through (iii) of this subsection.

(i) In the year of transition from the pay-as-you-go method to accrual accounting for purposes of Government contract cost accounting, the transition obligation shall be the excess of the accumulated PRB obligation over the fair value of plan assets determined in accordance with paragraph (o)(2)(iii)(E) of this subsection; the fair value must be reduced by the prepayment credit as determined in accordance with paragraph (o)(2)(iii)(F) of this subsection.

(ii) PRB cost attributable to the transition obligation assigned to the current year that is in excess of the amount assignable to accounting periods on the basis of a straight line amortization of the transition obligation over the average remaining working lives of active employees covered by the PRB plan or a 20-year period, whichever period is longer, is unallowable. However, if the plan is comprised of inactive participants only, the PRB cost attributable to the transition obligation assigned to the current year that is in excess of the amount assignable to accounting periods on a straight line amortization of the transition obligation over the average future life expectancy of the participants is unallowable.

(iii) For a plan that transitioned from pay-as-you-go to accrual accounting for Government contract cost accounting prior to July 22, 2013, the unallowable amount of PRB cost attributable to the transition obligation amortization shall continue to be based on the cost principle in effect at the time of the transition until the original transition obligation schedule is fully amortized.

* * * * *

[FR Doc. 2013-14619 Filed 6-20-13; 8:45 am]

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[Federal Register Volume 78, Number 120 (Friday, June 21, 2013)]

[Rules and Regulations]

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

[FR Doc No: 2013-14620]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 8 and 52

[FAC 2005-67; Item XI; Docket 2013-0080; Sequence 3]

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: June 21, 2013.

FOR FURTHER INFORMATION CONTACT: The Regulatory Secretariat Division (MVCB), 1800 F Street NW., 2nd Floor, Washington, DC 20405, 202-501-4755, for information pertaining to status or publication schedules.

Please cite FAC 2005-67, Technical Amendments.

SUPPLEMENTARY INFORMATION: In order to update certain elements in 48 CFR parts 8 and 52, this document makes editorial changes to the FAR.

List of Subject in 48 CFR Parts 8 and 52

Government procurement.

Dated: June 13, 2013.

William Clark,

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

Therefore, DoD, GSA, and NASA amend 48 CFR parts 8 and 52 as set forth below:

1. The authority citation for 48 CFR parts 8 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 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES

2. Amend section 8.703 by revising the third sentence to read as follows:

8.703 Procurement list.

* * * Questions concerning whether a supply item or service is on the Procurement List may be submitted at Internet email address info@abilityone.gov or referred to the Committee offices at the following address and telephone number: Committee for Purchase From People Who Are Blind or Severely Disabled, 1401 S. Clark Street, Suite 10800, Arlington, VA 22202-3259, 703-603-7740. * * *

3. Amend section 8.714 by revising paragraph (b) to read as follows:

8.714 Communications with the central nonprofit agencies and the Committee.

* * * * *

(b) Any matter requiring referral to the Committee shall be addressed to the Executive Director of the Committee, 1401 S. Clark Street, Suite 10800, Arlington, VA 22202-3259.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

4. Amend section 52.204-8 by:

a. Revising the date of the provision; and

b. Removing from paragraphs (b)(1), the introductory text of (b)(2), and (c)(1)(iii) ``clause at 52.204-7'' and adding ``provision at 52.204-7'' in its place.

The revised text reads as follows:

52.204-8 Annual Representations and Certifications.

* * * * *

Annual Representations and Certifications [Jun 2013]

* * * * *

5. Amend section 52.204-10 by:

a. Revising the date of the clause; and

b. Removing from the introductory text of paragraph (d)(1) ``FAR clause'' and adding ``FAR provision'' in its place.

The revised text reads as follows:

52.204-10 Reporting Executive Compensation and First-Tier Subcontract Awards.

* * * * *

Reporting Executive Compensation and First-Tier Subcontract Awards [Jun 2013]

* * * * *

[FR Doc. 2013-14620 Filed 6-20-13; 8:45 am]

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[Federal Register Volume 78, Number 120 (Friday, June 21, 2013)]

[Rules and Regulations]

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

[FR Doc No: 2013-14621]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1

[Docket FAR 2013-0078; Sequence 3]

Federal Acquisition Regulation; Federal Acquisition Circular 2005-67; 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) 2005-67, 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 2005-67, which precedes this document. These documents are also available via the Internet at http://www.regulations.gov.

DATES: June 21, 2013.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact the analyst whose name appears in the table below. Please cite FAC 2005-67 and the FAR case number. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755.

Item

Subject

FAR Case

Analyst

I

Contractors Performing Private Security Functions Outside the United States.

2011-029

Jackson.

II

Contracting Officer's Representative.

2013-004

Jackson.

III

System for Award Management Name Change, Phase 1 Implementation.

2012-033

Glover

IV

Interagency Acquisitions: Compliance by Nondefense Agencies with Defense Procurement Requirements.

2012-010

Corrigan.

V

Terms of Service and Open-Ended Indemnification, and Unenforceability of Unauthorized Obligations (Interim).

2013-005

Petrusek.

VI

Price Analysis Techniques.

2012-018

Chambers.

VII

Contracting with Women-owned Small Business Concerns (Interim).

2013-010

Morgan.

VIII

Deletion of Report to Congress on Foreign-Manufactured Products.

2013-008

Davis.

IX

Free Trade Agreement (FTA)--Panama.

2012-027

Davis.

X

Updated Postretirement Benefit (PRB) References.

2011-019

Chambers.

XI

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 2005-67 amends the FAR as specified below:

Item I--Contractors Performing Private Security Functions Outside the United States (FAR Case 2011-029)

DoD, GSA, and NASA are issuing a final rule amending the FAR to implement Governmentwide requirements contained in section 862 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2008 (Pub. L. 110-181), as amended by section 853 of the NDAA for FY 2009 (Pub. L. 110-417) and sections 831 and 832 of the NDAA for FY 2011 (Pub. L. 111-383). See 10 U.S.C. 2302 Note. These statutes establish minimum processes and requirements for the selection, accountability, training, equipping, and conduct of personnel performing private security functions outside the United States.

Item II--Contracting Officer's Representative (FAR Case 2013-004)

This final rule amends the FAR to improve contract surveillance by clarifying the contracting officer's representative (COR) responsibilities in FAR 1.602-2(d). In addition, a corresponding change is also made at FAR 7.104(e). This case originated from a Department of Defense (DoD) Panel on Contracting Integrity recommendation. The DoD Panel on Contracting Integrity, an internal DoD panel, consists of senior-level DoD officials from across DoD working to review progress made by DoD to eliminate areas of vulnerability of the defense contracting system that allow fraud, waste, and abuse to occur, and recommend changes in law, regulations, and policy to eliminate the areas of vulnerability. In order to improve the contracting environment, this rule provides additional explanation in the FAR to ensure that CORs understand their duties and responsibilities to survey contractor performance. This final rule is not required to be published for public comment because it only involves internal Government procedures regarding the appointment of CORs and the clarification of COR responsibilities, and has neither a significant effect beyond the internal operation procedures of the agency issuing the policy, regulation, procedure or form, nor has a significant cost or

administrative impact on contractors or offerors.

Item III--System for Award Management Name Change, Phase 1 Implementation (FAR Case 2012-033)

This final rule amends the FAR by updating references and names to conform to the System for Award Management (SAM) designation. The SAM is a Federal Government owned and operated free Web site that consolidates the capabilities in certain legacy systems that are used by Federal officials in the procurement and awards process. This rule incorporates language that will transition the Central Contractor Registration (CCR) database, the Excluded Parties List System (EPLS), and the Online Representations and Certifications Application (ORCA) to the SAM designation. This final rule also makes a number of minor additional conforming changes, such as updates to definitions.

Item IV--Interagency Acquisitions: Compliance by Nondefense Agencies With Defense Procurement Requirements (FAR Case 2012-010)

This final rule adopts with minor changes an interim rule published in the Federal Register at 77 FR 69720 on November 20, 2012. The interim rule amended the FAR to implement section 801 of Pub. L. 110-181, as amended (10 U.S.C. 2304 Note). Section 801 requires compliance certifications by nondefense agencies that purchase on behalf of the Department of Defense (DoD), and clarifies which DoD laws and regulations apply. The agencies must comply with new FAR subpart 17.7, in addition to complying with FAR subpart 17.5. To provide clarification for small business and contracting officers, existing policy for small business goal credit for assisted acquisitions was added by the interim rule to section FAR 4.603(c).

Item V--Terms of Service and Open-Ended Indemnification, and Unenforceability of Unauthorized Obligations (FAR Case 2013-005) (Interim)

This interim rule amends the FAR to address concerns raised in an opinion from the U.S. Department of Justice Office of Legal Counsel that determined the Anti-Deficiency Act is violated when a Government contracting officer or other employee with the authority to bind the Government agrees, without statutory authorization or other exception, to an open-ended, unrestricted indemnification clause. This rule clarifies for the public that an End User License Agreement (EULA), Terms of Service (TOS), or similar agreement, containing an indemnification provision, is unenforceable and nonbinding against the Government and Government--authorized end-users. The rule contains a new clause that applies to all solicitations and contracts and automatically applies to micro-purchases, including those made with the Governmentwide purchase card.

Item VI--Price Analysis Techniques (FAR Case 2012-018)

This final rule amends the FAR to clarify a reference used in FAR 15.404-1(b)(2)(i). FAR 15.404-1(b)(2) delineates the various price analysis techniques (to ensure a fair and reasonable price) with 15.404-1(b)(2)(i) being the comparison of proposed prices received from multiple offerors in response to a solicitation. The current reference in this section (FAR 15.403-1(c)(1)) was too broad; thus, this final rule changes this reference to 15.403-1(c)(1)(i), which precisely aligns the price analysis technique of comparing proposed prices in 15.404-1(b)(2)(i) with the adequate price competition standard (for exceptions from certified cost or pricing data requirements) of comparing proposed prices from multiple offerors. Small businesses are not impacted by this final rule because this rule merely clarifies the reference, changing it to cite FAR 15.403-1(c)(1)(i) (rather than the more generalized 15.403-1(c)(1)) at 15.404-1(b)(2)(i), which describes the use of the price analysis technique of comparing proposed prices from multiple offerors in order to establish a fair and reasonable price.

Item VII--Contracting With Women-Owned Small Business Concerns (FAR Case 2013-010) (Interim)

This interim rule amends FAR 19.1505 to remove the dollar limitation for set-asides for economically disadvantaged women-owned small business (EDWOSB) concerns or women-owned small business (WOSB) concerns eligible under the Women-owned Small Business (WOSB) Program. This change implements section 1697 of the NDAA for FY 2013, Public Law 112-239, which amended section 8(m) of the Small Business Act, (15 U.S.C. 637(m)).

As a result, contracting officers may set aside acquisitions for competition restricted to EDWOSB concerns or WOSB concerns eligible under the WOSB Program at any dollar level above the micro-purchase threshold, provided the other requirements for a set-aside under the WOSB Program are met.

Item VIII--Deletion of Report to Congress on Foreign-Manufactured Products (FAR Case 2013-008)

This final rule amends the FAR to eliminate an obsolete Congressional reporting requirement imposed by the United States Troops Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 (41 U.S.C. 8302(b)(1)).

This Act required these reports to Congress for Fiscal Year 2007 through Fiscal Year 2011 on acquisitions of end products manufactured outside the United States. This report to Congress is no longer required but the collection of the data in Federal Procurement Data System is still required (see FAR 52.225-18, Place of Manufacture). This final rule only affects the internal operating procedures of the Government.

Item IX--Free Trade Agreement (FTA)--Panama (FAR Case 2012-027)

This final rule adopts without change an interim rule published November 20, 2012, which implemented a new Free Trade Agreement with Panama (see the United States-Panama Trade Promotion Agreement Implementation Act (Pub. L. 112-43) (19 U.S.C. 3805 note).

This Trade Promotion Agreement is a free trade agreement that provides for mutually non-discriminatory treatment of eligible products and services from Panama. This final rule is not expected to have a significant economic impact on a substantial number of small entities.

Item X--Updated Postretirement Benefit (PRB) References (FAR Case 2011-019)

This final rule amends FAR 31.205-6(o)(2)(iii)(A)(1) to remove references to paragraphs 110, 112, and 113 of the now superseded Financial Accounting Standard (FAS) 106, which were deleted in the Financial Accounting Standards Board's (FASB's) Accounting Standards Codification (ASC) of generally accepted accounting principles (GAAP) and replaces them with explicit criteria that are their functional equivalent. The FAR referenced GAAP to provide criteria for determining the allowability of the transition obligation, when converting from pay-as-you-go accounting for postretirement benefits (PRBs) to an accrual method of accounting for the purposes of Government contract cost accounting.

This final rule will have a minimal economic impact on small businesses because it does not change the FAR substantively.

Item XI--Technical Amendments

Editorial changes are made at FAR 8.703, 8.714, 52.204-8, and 52.204-10.

Dated: June 13, 2013.

William Clark,

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

[FR Doc. 2013-14621 Filed 6-20-13; 8:45 am]

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