[Federal Register: October 30, 1998 (Volume 63, Number 210)]

[Rules and Regulations]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

Part V

Department of Defense

General Services Administration

National Aeronautics and Space Administration

48 CFR Chapter 1, et al.

Federal Acquisition Regulations; Final Rules

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1

Federal Acquisition Circular 97-09; Introduction

AGENCIES: Department of Defense (DoD), General ServicesAdministration

(GSA), and National Aeronautics and SpaceAdministration (NASA).

ACTION: Summary presentation of final and interim rules, and technical

amendments and corrections.

SUMMARY: This document summarizes the Federal Acquisition Regulation

(FAR) rules issued by the Civilian Agency Acquisition Council and the

Defense Acquisition Regulations Council in this Federal Acquisition

Circular (FAC) 97-09. A companion document, the Small Entity Compliance

Guide (SECG), follows this FAC. The FAC, including the SECG, may be

located on the Internet at http://www.arnet.gov/far.

DATES: For effective dates and comment dates, see separate documents

which follow.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS

Building, Washington, DC 20405, (202) 501-4755, for information

pertaining to status or publication schedules. For clarification of

content, contact the analyst whose name appears in the table below in

relation to each FAR case or subject area. Please cite FAC 97-09 and

specific FAR case number(s). Interested parties may also visit our

website at http://www.arnet.gov/far.

Item

Subject

FAR case

Analyst

I

Taxpayer Identification Numbers(Interim).

97-003

Olson.

II

Electronic Commerce in Federal Procurement (Interim).

97-304

Nelson.

III

Alternate Dispute Resolution--1996.

97-015

O'Neill.

IV

Pay-As-You-Go Pension Costs

89-012

Olson.

V

Rehabilitation Act, Workers With Disabilities.

96-610

O'Neill.

VI

Civil Defense Costs

97-036

Nelson

VII

Costs Related to Legal/Other Proceedings

95-020

Nelson

VIII

Service Contracts

97-302

Olson

IX

Payment Due Dates

97-609

Olson

X

Technical Amendments

   

SUPPLEMENTARY INFORMATION: Summaries for each FAR rule follow. For the

actual revisions and/or amendments to these FAR cases, refer to the

specific item number and subject set forth in the documents following

these item summaries.

Federal Acquisition Circular 97-09 amends the Federal Acquisition

Regulation (FAR) as specified below:

Item I--Taxpayer Identification Numbers (FAR Case 97-003)

This interim rule amends FAR Parts 1, 4, 13, 14, 15, and 52 to

implement Subsection (i) of the Debt Collection Improvement Act of 1996

(Pub. L. 104-134) and Section 1022 of the Taxpayer Relief Act of 1997

(Pub. L. 105-32). The rule clarifies requirements for obtaining

Taxpayer Identification Number (TIN) information from contractors and

forwarding the information to payment offices; specifies that TIN

information may be used by the Government to collect and report on any

delinquent amounts arising out of the contractor's relationship with

the Government; and clarifies and updates requirements for reporting

contract information and payment information to the Internal Revenue

Service.

(Orders under Federal Supply Schedule (FSS) contracts. Ordering

officials are required to provide the FSS contractor's TIN (and other

information) to the payment office for each order under an FSS

contract. The General Services Administration is planning to establish

an Internet based system by early 1999 that can be used by ordering

officials to obtain this information. In the meantime, the information

can be obtained from most FSS contract price lists or by requesting it

directly from the FSS contractor prior to placing an order.)

Item II--Electronic Commerce in Federal Procurement (FAR Case 97-

304)

This interim rule revises FAR Subpart 4.5 and makes associated

changes to FAR Parts 2, 5, 13, and 14, to implement Section 850 of the

National Defense Authorization Act for Fiscal Year 1998 (Pub. L. 105-

85) to eliminate the preference for electronic commerce within Federal

agencies to be conducted on the Federal Acquisition Computer Network

(FACNET) Architecture. In addition, this interim rule promotes the use

of cost-effective procedures and processes that employ electronic

commerce in the conduct and administration of Federal procurement

systems. In order to facilitate access to Federal procurements, Section

850 mandates that a single Governmentwide point of entry be used. Once

the Administrator of the Office of Federal Procurement Policy (OFPP)

designates the single Governmentwide point of entry, the FAR will be

changed accordingly. FACNET qualifies as the single, Governmentwide

point of entry until the Administrator of OFPP designates the single,

Governmentwide point of entry. Federal procurement systems that employ

electronic commerce shall apply nationally and internationally

recognized standards that broaden interoperability and ease the

electronic interchange of information.

Item III--Alternative Dispute Resolution--1996 (FAR Case 97-015)

This final rule amends FAR 6.302-3, 24.202, 33.2, and the clause at

52.233-1 to implement the Administrative Dispute Resolution Act of 1996

(Pub. L. 104-320) and Section 4321(a)(7) of the Clinger-Cohen Act of

1996 (Pub. L. 104-106). The rule makes clear the authority to contract

with a neutral person as an exception to requirements for full and open

competition; revises requirements for certification of a claim under

the Administrative Dispute Resolution Act to conform to the

requirements under the Contract Disputes Act; and specifies that

certain dispute resolution communications are exempt from disclosure

under the Freedom of Information Act.

Item IV--Pay-As-You-Go Pension Costs (FAR Case 89-012)

The interim rule published as Item I of FAC 84-44 is converted to a

final rule with amendments at FAR 15.408, 31.001, 31.205-6, and the

clause at 52.215-15. The rule amends the FAR for consistency with 48 CFR 9904.412, Cost accounting standard for composition and measurement of pension cost (CAS 412), and 48 CFR 9904.413, Adjustment and allocation of pension cost (CAS 413). CAS 412 and CAS 413 relate to accounting for pension costs under negotiated Government contracts.

Item V--Rehabilitation Act, Workers With Disabilities (FAR Case 96-

610)

The interim rule published as Item V of FAC 97-05 is converted to a

final rule without change. The rule implements Department of Labor

regulations at 41 CFR 60-741 regarding affirmative action to employ,

and advance in employment, qualified individuals with disabilities.

Item VI--Civil Defense Costs (FAR Case 97-036)

This final rule deletes the civil defense cost principle at FAR

31.205-5, as this guidance is no longer deemed necessary. The

acceptability of civil defense costs will remain governed by the

allocability, allowability, and reasonableness criteria discussed in

FAR Part 31.

Item VII--Costs Related to Legal/Other Proceedings (FAR Case 95-

020)

This final rule amends FAR 31.205-47, Costs related to legal and

other proceedings, to clarify the allowability of costs incurred for

qui tam suits in which the Government does not intervene. This rule is

consistent with audit guidance issued by the Defense Contract Audit

Agency on August 24, 1995. Certain Government contracting personnel and

contractors may have had common misinterpretations of the language at

FAR 31.205-47 prior to August 24, 1995. For qui tam legal fees incurred

prior to August 24, 1995, if the Government contracting personnel and

the contractor shared a common misinterpretation of the language at FAR

31.205-47, the contracting officer, in consultation with his or her

legal advisors, should determine the appropriate treatment of those

costs on a case-by-case basis.

Item VIII--Service Contracts (FAR Case 97-302)

This final rule revises FAR 32.703-3 and amends 37.106 to implement

Section 801 of the National Defense Authorization Act for Fiscal Year

1998 (Pub. L. 105-85). Section 801 provides that the Secretary of

Defense, the Secretary of a military department, or the Secretary of

Transportation with respect to the Coast Guard, when it is not

operating as a service in the Navy, may enter into a contract for

procurement of severable services for a period that begins in one

fiscal year and ends in the next fiscal year. This authority remains

the same for civilian agencies other than NASA.

Item IX--Payment Due Dates (FAR Case 97-609)

This final rule amends FAR Subpart 32.9 to clarify that agencies

may amend the clauses at FAR 52.232-25, Prompt Payment, and 52.232-26,

Prompt Payment for Fixed-Price Architect-Engineer Contracts, to specify

a period shorter than 30 days (but not less than 7 days) for making

contract invoice payments.

Item X--Technical Amendments

Amendments are being made at sections 1.106, 6.302-3, 14.205-1,

14.407-4, 15.404-1, 19.102, 19.1004, 32.705-1, 33.104, 36.601-4,

41.103, 52.212-5, 52.244-6, and 53.228 in order to update references

and make editorial changes.

Dated: October 22, 1998.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

FAC 97-09

Federal Acquisition Circular (FAC) 97-09 is issued under the

authority of the Secretary of Defense, the Administrator of General

Services, and the Administrator for the National Aeronautics and Space

Administration.

Unless otherwise specified, all Federal Acquisition Regulation

(FAR) and other directive material contained in FAC 97-09 are effective

December 29, 1998, except for Items I, II, V, and X which are effective

October 30, 1998.

Dated: October 23, 1998.

Eleanor R. Spector,

Director, Defense Procurement.

Ida M. Ustad,

Deputy Associate Administrator, Office of Acquisition Policy, General

Services Administration.

Dated: October 16, 1998.

Tom Luedtke,

Acting Associate Administrator for Procurement, National Aeronautics

and Space Administration.

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 4, 13, 14, 15, and 52

[FAC 97-09; FAR Case 97-003; Item I]

Federal Acquisition Regulation; Taxpayer Identification Numbers

AGENCIES: Department of Defense (DoD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comments.

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed on an interim rule amending

the Federal Acquisition Regulation (FAR) to implement Subsection (i) of

the Debt Collection Improvement Act of 1996 and Section 1022 of the

Taxpayer Relief Act of 1997, and to clarify the Government requirements

for reporting of contract information and payment information to the

Internal Revenue Service (IRS). This regulatory action was not subject

to Office of Management and Budget review under Executive Order 12866,

dated September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: October 30, 1998.

Comment Date: Comments should be submitted to the FAR Secretariat

at the address shown below on or before December 29, 1998, to be

considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to:

General Services Administration FAR Secretariat (MVR), 800 F Street,

NW, Room 4035, Attn: Ms. Laurie Duarte, Washington, DC 20405.

E-Mail comments submitted over the Internet should be addressed to:

farcase.97-003@gsa.gov

Please cite FAC 97-09, FAR case 97-003 in all correspondence

related to this case.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS

Building, Washington, DC 20405, (202) 501-4755, for information

pertaining to status or publication schedules. For clarification of

content, contact Mr. Jeremy Olson at (202) 501-0692. Please cite FAC

97-09, FAR case 97-003.

SUPPLEMENTARY INFORMATION:

A. Background

Subsection (i) of the Debt Collection Improvement Act of 1996 (Pub.

L. 104-134) amends 31 U.S.C. 7701 by requiring that the head of each

Federal agency require each contractor doing business with the

Government to furnish its Taxpayer Identification Number (TIN) and by

requiring the Government to disclose its intent to use such number for

purposes of collecting and reporting on any delinquent amounts. Section

1022 of the Taxpayer Relief Act of 1997 (Pub. L. 105-32) amends 26

U.S.C. 6041A(d) to add payments for services provided by corporations

to the types of payments that the Government is required to report to

the IRS using Form 1099.

This interim rule expands the scope of FAR Subpart 4.9 to require

the contractor to provide a TIN for debt collection purposes. Prior to

this revision, FAR Subpart 4.9 required the contractor to provide a TIN

only to facilitate Government reporting of certain contract information

and payment information to the IRS. The rule also deletes the

provisions at FAR 52.214-2, Type of Business Organization-Sealed

Bidding, and 52.215-4, Type of Business Organization, since the

information requested in these provisions is duplicative of the

information requested in the provisions at FAR 52.204-3, Taxpayer

Identification, and 52.212-3, Offeror Representations and

Certifications-Commercial Items, as amended by this rule. In addition,

this rule clarifies and updates the requirement for Government agencies

to obtain contract information and payment information to facilitate

issuance of Form 1099 and other reports to the IRS.

B. Regulatory Flexibility Act

The interim rule is not expected to have a significant economic

impact on a substantial number of small entities within the meaning of

the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule

merely clarifies existing requirements for contractors to submit TINs,

requires the Government to advise contractors of the potential debt

collection usage of the TIN, and clarifies and updates requirements for

Government reporting of contract information and payment information to

the IRS. An Initial Regulatory Flexibility Analysis has, therefore, not

been performed. Comments are invited from small businesses and other

interested parties. Comments from small entities concerning the

affected FAR subparts also will be considered in accordance with 5

U.S.C. 610. Such comments must be submitted separately and should cite

5 U.S.C 601, et seq. (FAR Case 97-003), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act (44 U.S.C. 3501, et seq.) is deemed to

apply because the interim rule contains information collection

requirements. The interim rule decreases the collection requirements

currently approved under Office of Management and Budget (OMB) Control

Number 9000-0046, since the rule deletes the provisions at FAR 52.214-2

and 52.215-4.

OMB Control Numbers 9000-0097 and 9000-0136 approved the

information collection requirements that existed in the FAR at 52.204-3

and 52.212-3, respectively, prior to implementation of this interim

rule. Revisions to these provisions required by the interim rule have

no net impact on the collection requirements currently approved.

D. 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 rule

implements Subsection (i) of the Debt Collection Improvement Act of

1996 (Pub. L. 104-134), which was effective upon enactment on April 25,

1996; and Section 1022 of the Taxpayer Relief Act of 1997 (Pub. L. 105-

32), which applies to payments made after December 31, 1997. An interim

rule is necessary to ensure that changes are made to the FAR to address

the statutory requirements to notify contractors that the TIN may be

used for debt collection purposes, and to add payments for services

provided by corporations to the types of payments subject to IRS Form

1099 reporting requirements. However, pursuant to Public Law 98-577 and

FAR 1.501, public comments received in response to this interim rule

will be considered in the formation of the final rule.

List of Subjects in 48 CFR Parts 1, 4, 13, 14, 15, and 52

Government procurement.

Dated: October 22, 1998.

Edward C. Loeb,

Director, Federal Acquisition, Policy Division.

Therefore, 48 CFR Parts 1, 4, 13, 14, 15, and 52 are amended as set

forth below:

1. The authority citation for 48 CFR Parts 1, 4, 13, 14, 15, and 52

continues to read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM

1.106 [Amended]

2. Section 1.106 is amended in the table following the introductory

paragraph by removing the FAR segments at 52.214-2 and 52.215-4 and

their corresponding OMB Control Numbers.

PART 4--ADMINISTRATIVE MATTERS

3. Section 4.203 is revised to read as follows:

4.203 Taxpayer identification information.

(a) If the contractor has furnished a Taxpayer Identification

Number (TIN) when completing the solicitation provision at 52.204-3,

Taxpayer Identification, or paragraph (b) of the solicitation provision

at 52.212-3, Offeror Representations and Certifications--Commercial

Items, the contracting officer shall, unless otherwise provided in

agency procedures, attach a copy of the completed solicitation

provision as the last page of the copy of the contract sent to the

payment office.

(b) If the TIN or type of organization is derived from a source

other than the provision at 52.204-3 or 52.212-3(b), the contracting

officer shall annotate the last page of the contract or order forwarded

to the payment office to state the contractor's TIN and type of

organization, unless this information is otherwise provided to the

payment office in accordance with agency procedures.

(c) If the contractor provides its TIN or type of organization to

the contracting officer after award, the contracting officer shall

forward the information to the payment office within 7 days of its

receipt.

(d) Federal Supply Schedule contracts. Each contracting officer

that places an order under a Federal Supply Schedule contract (see

Subpart 8.4) shall provide the TIN and type of organization information

to the payment office in accordance with paragraph (b) of this section.

(e) Basic ordering agreements and indefinite-delivery contracts

(other than Federal Supply Schedule contracts).

(1) Each contracting officer that issues a basic ordering agreement

or indefinite-delivery contract (other than a Federal Supply Schedule

contract) shall provide to contracting officers placing orders under

the agreement or contract--

(i) A copy of the agreement or contract with a copy of the

completed solicitation provision at 52.204-3 or 52.212-3(b) as the last

page of the agreement or contract; or

(ii) The contractor's TIN and type of organization information.

(2) Each contracting officer that places an order under a basic

ordering agreement or indefinite-delivery contract (other than a

Federal Supply Schedule contract) shall provide the TIN and type of

organization information to the payment office in accordance with

paragraph (a) or (b) of this section.

4. Subpart 4.9 is revised to read as follows:

Subpart 4.9--Taxpayer Identification Number Information

Sec.

4.900 Scope of subpart.

4.901 Definitions.

4.902 General.

4.903 Reporting contract information to the IRS.

4.904 Reporting payment information to the IRS.

4.905 Solicitation provision.

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

Subpart 4.9--Taxpayer Identification Number Information

4.900 Scope of subpart.

This subpart provides policies and procedures for obtaining--

(a) Taxpayer Identification Number (TIN) information that may be

used for debt collection purposes; and

(b) Contract information and payment information for submittal to

the payment office for Internal Revenue Service (IRS) reporting

purposes.

4.901 Definitions.

Common parent, as used in this subpart, means that corporate entity

that owns or controls an affiliated group of corporations that files

its Federal income tax returns on a consolidated basis, and of which

the offeror is a member.

Taxpayer Identification Number (TIN), as used in this subpart,

means the number required by the IRS to be used by the offeror in

reporting income tax and other returns. The TIN may be either a Social

Security Number or an Employer Identification Number.

4.902 General.

(a) Debt collection. 31 U.S.C. 7701(c) requires each contractor

doing business with a Government agency to furnish its TIN to that

agency. 31 U.S.C. 3325(d) requires the Government to include, with each

certified voucher prepared by the Government payment office and

submitted to a disbursing official, the TIN of the contractor receiving

payment under the voucher. The TIN may be used by the Government to

collect and report on any delinquent amounts arising out of the

contractor's relationship with the Government.

(b) Information reporting to the IRS. The TIN is also required for

Government reporting of certain contract information (see 4.903) and

payment information (see 4.904) to the IRS.

4.903 Reporting contract information to the IRS.

(a) 26 U.S.C. 6050M, as implemented in 26 CFR, requires heads of

Federal executive agencies to report certain information to the IRS.

(b)(1) The required information applies to contract modifications--

(i) Increasing the amount of a contract awarded before January 1,

1989, by $50,000 or more; and

(ii) Entered into on or after April 1, 1990.

(2) The reporting requirement also applies to certain contracts and

modifications thereto in excess of $25,000 entered into on or after

January 1, 1989.

(c) The information to report is--

(1) Name, address, and TIN of the contractor;

(2) Name and TIN of the common parent (if any);

(3) Date of the contract action;

(4) Amount obligated on the contract action; and

(5) Estimated contract completion date.

(d) Transmit the information to the IRS through the Federal

Procurement Data System (see Subpart 4.6 and implementing

instructions).

4.904 Reporting payment information to the IRS.

26 U.S.C. 6041 and 6041A, as implemented in 26 CFR, in part,

require payors, including Government agencies, to report to the IRS, on

Form 1099, payments made to certain contractors. 26 U.S.C. 6109

requires a contractor to provide its TIN if a Form 1099 is required.

The payment office is responsible for submitting reports to the IRS.

4.905 Solicitation provision.

The contracting officer shall insert the provision at 52.204-3,

Taxpayer Identification, in solicitations that are not conducted under

the procedures of Part 12, unless the TIN, type of organization, and

common parent information for each offeror will be obtained from some

other source (e.g., centralized database) in accordance with agency

procedures.

PART 13--SIMPLIFIED ACQUISITION PROCEDURES

5. Section 13.106-3 is amended by adding paragraph (e) to read as

follows:

13.106-3 Award and documentation.

* * * * *

(e) Taxpayer Identification Number. If an oral solicitation is

used, the contracting officer shall ensure that the copy of the award

document sent to the payment office is annotated with the contractor's

Taxpayer Identification Number (TIN) and type of organization (see

4.203), unless this information will be obtained from some other source

(e.g., centralized database). The contracting officer shall disclose to

the contractor that the TIN may be used by the Government to collect

and report on any delinquent amounts arising out of the contractor's

relationship with the Government (31 U.S.C. 7701(c)(3)).

PART 14--SEALED BIDDING

14.201-6 [Amended]

6. Section 14.201-6 is amended by removing and reserving paragraph

(b)(2).

PART 15--CONTRACTING BY NEGOTIATION

15.209 [Amended]

7. Section 15.209 is amended by removing and reserving paragraph

(d).

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

8. Section 52.204-3 is revised to read as follows:

52.204-3 Taxpayer identification.

As prescribed in 4.905, insert the following provision:

Taxpayer Identification (Oct 1998)

(a) Definitions.

Common parent, as used in this provision, means that corporate

entity that owns or controls an affiliated group of corporations

that files its Federal income tax returns on a consolidated basis,

and of which the offeror is a member.

Taxpayer Identification Number (TIN), as used in this provision,

means the number required by the Internal Revenue Service (IRS) to

be used by the offeror in reporting income tax and other returns.

The TIN may be either a Social Security Number or an Employer

Identification Number.

(b) All offerors must submit the information required in

paragraphs (d) through (f) of this provision to comply with debt

collection requirements of 31 U.S.C. 7701(c) and 3325(d), reporting

requirements of 26 U.S.C. 6041, 6041A, and 6050M, and implementing

regulations issued by the IRS. If the resulting contract is subject

to the payment reporting requirements described in Federal

Acquisition Regulation (FAR) 4.904, the failure or refusal by the

offeror to furnish the information may result in a 31 percent

reduction of payments otherwise due under the contract.

(c) The TIN may be used by the Government to collect and report

on any delinquent amounts arising out of the offeror's relationship

with the Government (31 U.S.C. 7701(c)(3)). If the resulting

contract is subject to the payment reporting requirements described

in FAR 4.904, the TIN provided hereunder may be matched with IRS

records to verify the accuracy of the offeror's TIN.

(d) Taxpayer Identification Number (TIN).

[ ] TIN:.--------------------------------------------------------

[ ]TIN has been applied for.

[ ] TIN is not required because:

[ ]Offeror is a nonresident alien, foreign corporation, or

foreign partnership that does not have income effectively connected

with the conduct of a trade or business in the United States and

does not have an office or place of business or a fiscal paying

agent in the United States;

[ ] Offeror is an agency or instrumentality of a foreign

government;

[ ] Offeror is an agency or instrumentality of the Federal

Government.

(e) Type of organization.

[ ] Sole proprietorship;

[ ] Partnership;

[ ] Corporate entity (not tax-exempt);

[ ] Corporate entity (tax-exempt);

[ ] Government entity (Federal, State, or local);

[ ] Foreign government;

[ ] International organization per 26 CFR 1.6049-4;

[ ] Other--------------------------------------------------------

(f) Common parent.

[ ] Offeror is not owned or controlled by a common parent as

defined in paragraph (a) of this provision.

[ ] Name and TIN of common parent:

Name-------------------------------------------------------------------

TIN--------------------------------------------------------------------

(End of provision)

9. Section 52.212-3 is amended by revising the date of the

provision and paragraph (b) to read as follows:

52.212-3 Offeror representations and certifications--Commercial items.

* * * * *

Offeror Representations and Certifications--Commercial Items (Oct 1998)

* * * * *

(b) Taxpayer Identification Number (TIN) (26 U.S.C. 6109, 31

U.S.C. 7701). (Not applicable if the offeror is required to provide

this information to a central contractor registration database to be

eligible for award.)

(1) All offerors must submit the information required in

paragraphs (b)(3) through (b)(5) of this provision to comply with

debt collection requirements of 31 U.S.C. 7701(c) and 3325(d),

reporting requirements of 26 U.S.C. 6041, 6041A, and 6050M, and

implementing regulations issued by the Internal Revenue Service

(IRS).

(2) The TIN may be used by the Government to collect and report

on any delinquent amounts arising out of the offeror's relationship

with the Government (31 U.S.C. 7701(c)(3)). If the resulting

contract is subject to the payment reporting requirements described

in FAR 4.904, the TIN provided hereunder may be matched with IRS

records to verify the accuracy of the offeror's TIN.

(3) Taxpayer Identification Number (TIN).

[ ] TIN:---------------------------------------------------------

[ ] TIN has been applied for.

[ ] TIN is not required because:

[ ] Offeror is a nonresident alien, foreign corporation, or

foreign partnership that does not have income effectively connected

with the conduct of a trade or business in the United States and

does not have an office or place of business or a fiscal paying

agent in the United States;

[ ] Offeror is an agency or instrumentality of a foreign

government;

[ ] Offeror is an agency or instrumentality of the Federal

Government.

(4) Type of organization.

[ ] Sole proprietorship;

[ ] Partnership;

[ ] Corporate entity (not tax-exempt);

[ ] Corporate entity (tax-exempt);

[ ] Government entity (Federal, State, or local);

[ ] Foreign government;

[ ] International organization per 26 CFR 1.6049-4;

[ ] Other--------------------------------------------------------

(5) Common parent.

[ ] Offeror is not owned or controlled by a common parent;

[ ] Name and TIN of common parent:

Name-------------------------------------------------------------------

TIN--------------------------------------------------------------------

* * * * *

52.214-2 [Reserved]

10. Section 52.214-2 is removed and reserved.

52.215-4 [Reserved]

11. Section 52.215-4 is removed and reserved.

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 4, 5, 13, 14, and 32

[FAC 97-09; FAR Case 97-304; Item II]

Federal Acquisition Regulation; Electronic Commerce in Federal

Procurement

AGENCIES: Department of Defense (DoD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comments.

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed on an interim rule amending

the Federal Acquisition Regulation (FAR) to implement Section 850 of

the National Defense Authorization Act for Fiscal Year 1998 by removing

Federal Acquisition Computer Network (FACNET) specific terms and

requirements and replacing them with more flexible electronic commerce

policies. This regulatory action was not subject to Office of

Management and Budget review under Executive Order 12866, dated

September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: October 30, 1998.

Comment Date: Comments should be submitted to the FAR Secretariat

at the address shown below on or before December 29, 1998, to be

considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to:

General Services Administration, FAR Secretariat (MVR), 1800 F Street,

NW, Room 4035, Attn: Ms. Laurie Duarte, Washington, DC 20405.

E-Mail comments submitted over the Internet should be addressed to:

farcase.97-304@gsa.gov

Please cite FAC 97-09, FAR case 97-304, in all correspondence

related to this case.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS

Building, Washington, DC 20405, (202) 501-4755, for information

pertaining to status or publication schedules. For clarification of

content, contact Ms. Linda K. Nelson, Procurement Analyst, at (202)

501-1900. Please cite FAC 97-09, FAR case 97-304.

SUPPLEMENTARY INFORMATION:

A. Background

This interim rule revises FAR Subpart 4.5 and makes associated

changes to FAR Parts 2, 5, 13, 14, and 32 to implement Section 850 of

the National Defense Authorization Act for Fiscal Year 1998 (Pub. L.

105-85). Section 850 amends Titles 10, 15, 40, and 41 of the United

States Code to eliminate the preference for electronic commerce within

Federal agencies to be conducted on the Federal Acquisition Computer

Network (FACNET) Architecture. Additionally, Section 850 provides a

more flexible electronic commerce policy by promoting the use of cost-

effective procedures and processes that employ electronic commerce in

the conduct and administration of Federal procurement systems and the

use of nationally and internationally recognized standards that broaden

interoperability and ease the electronic interchange of information. In

order to facilitate access to Federal procurement opportunities,

Section 850 mandates that a single, Governmentwide point of entry be

used that will provide universal public access to procurement

opportunities Governmentwide. In the report submitted to Congress by

the President's Management Council Electronic Processes Initiatives

Committee entitled ``Electronic Commerce For Buyers and Sellers,'' the

Committee endorsed a World Wide Web-based electronic system that would

provide the private sector direct access to Federal procurement

opportunities at a single location.

In an effort to distribute acquisition-related information to

industry more quickly and economically, an electronic posting system is

now being tested by several Federal agencies. This system will permit

buyers to post solicitations and other pertinent information, in

addition to notices, directly to the Internet, thus giving sellers

access to this information through a single, Governmentwide point of

entry. If testing demonstrates that this electronic posting system is

capable of providing effective access to notices and solicitations

through a single point of entry, consideration will be given by the

Administrator of OFPP to designating it as the ``single, Governmentwide

point of entry,'' and the FAR will be changed accordingly.

In the meantime, FACNET is the Governmentwide system that provides

universal user access, employs nationally and internationally

recognized data formats, and allows the electronic data interchange of

acquisition information between the private sector and the Federal

Government. FACNET qualifies as the single, Governmentwide point of

entry until the Administrator of the Office of Federal Procurement

Policy designates the single, Governmentwide point of entry.

B. Regulatory Flexibility Act

This interim rule is not expected to have a significant negative

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

is more flexible than the current FAR policy regarding the Federal

electronic commerce architecture. It may be easier for some small

entities to conduct business with the Federal Government over the World

Wide Web, for instance, than using a value-added network to conduct

business over FACNET. Since this may result in a positive impact on

small entities, an Initial Regulatory Flexibility Analysis (IRFA) has

been performed and is summarized as follows:

The objectives of the rule are (1) to promote the use of cost-

effective procedures and processes that employ electronic commerce

in the conduct and administration of Federal procurement systems,

and (2) to apply nationally and internationally recognized standards

that broaden interoperability and ease the electronic interchange of

information. These objectives are stated in Section 850 of Public

Law 105-85. The legal authority to use electronic commerce for

Government contracting actions was confirmed in General Accounting

Office (GAO) Advisory Opinion B-238449. The opinion concluded that

electronic transactions can create legally binding contractual

obligations in accordance with 31 U.S.C. 1501. The interim rule

applies to all large and small entities that do business or are

planning to do business with the Government. The ability to use

electronic architectures other than FACNET, such as the World Wide

Web, to conduct electronic commerce will increase competition by

improving access to Federal contracting opportunities for the more

than 72,995 vendors currently doing business with the Government,

particularly small businesses, as well as many other vendors that

find access to bidding opportunities difficult under the current

system.

A copy of the IRFA has been submitted to the Chief Counsel for

Advocacy of the Small Business Administration and may be obtained from

the FAR Secretariat. Comments are invited. Comments from small entities

concerning the affected FAR subparts also will be considered in

accordance with 5 U.S.C. 610. Such comments must be submitted

separately and should cite 5 U.S.C. 601, et seq. (FAC 97-09, FAR Case

97-304), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping requirements or collections of

information from offerors, contractors, or members of the public that

require the approval of the Office of Management and Budget under 44

U.S.C. 3501, et seq.

D. 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 to implement Section 850 of Public Law 105-85, which

eliminates the preference for electronic commerce within Federal

agencies to be conducted on the Federal Acquisition Computer Network

(FACNET) Architecture. Section 850 became effective on May 17, 1998.

However, pursuant to Public Law 98-577 and FAR 1.501, public comments

received in response to this interim rule will be considered in the

formation of the final rule.

List of Subjects in 48 CFR Parts 2, 4, 5, 13, 14, and 32

Government procurement.

Dated: October 22, 1998.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 2, 4, 5, 13, 14, and 32 are amended as set

forth below:

1. The authority citation for 48 CFR Parts 2, 4, 5, 13, 14, and 32

continues to read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

PART 2--DEFINITIONS OF WORDS AND TERMS

2. Section 2.101 is amended by adding, in alphabetical order, the

definition ``Electronic commerce''; revising the definition ``Federal

Acquisition Computer Network (FACNET) Architecture''; and removing the

definitions ``Full FACNET'', ``Governmentwide FACNET'', and ``Interim

FACNET'' to read as follows:

2.101 Definitions.

* * * * *

Electronic commerce means electronic techniques for accomplishing

business transactions including electronic mail or messaging, World Wide Web technology, electronic bulletin boards, purchase cards, electronic funds transfer, and electronic data interchange.

* * * * *

Federal Acquisition Computer Network (FACNET) Architecture is a

Governmentwide system that provides universal user access, employs

nationally and internationally recognized data formats, and allows the

electronic data interchange of acquisition information between the

private sector and the Federal Government. FACNET qualifies as the

single, Governmentwide point of entry pending designation by the

Administrator of the Office of Federal Procurement Policy (OFPP).

* * * * *

PART 4--ADMINISTRATIVE MATTERS

3. Subpart 4.5, consisting of sections 4.500 through 4.502, is

revised to read as follows:

Subpart 4.5--Electronic Commerce in Contracting

Sec.

4.500 Scope of subpart.

4.501 Definitions.

4.502 Policy.

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

4.500 Scope of subpart.

This subpart provides policy and procedures for the establishment

and use of electronic commerce in Federal acquisition as required by

Section 30 of the Office of Federal Procurement Policy (OFPP) Act (41

U.S.C. 426).

4.501 Definitions.

Electronic data interchange (EDI), as used in this subpart, means a

technique for electronically transferring and storing formatted

information between computers utilizing established and published

formats and codes, as authorized by the applicable Federal Information

Processing Standards.

Single, Governmentwide point of entry, as used in this subpart,

means the one point of entry to be designated by the Administrator of

OFPP that will allow the private sector to electronically access

procurement opportunities Governmentwide.

4.502 Policy.

(a) The Federal Government shall use electronic commerce whenever

practicable or cost-effective. The use of terms commonly associated

with paper transactions (e.g., ``copy,'' ``document,'' ``page,''

``printed,'' ``sealed envelope,'' and ``stamped'') shall not be

interpreted to restrict the use of electronic commerce. Contracting

officers may supplement electronic transactions by using other media to

meet the requirements of any contract action governed by the FAR (e.g.,

transmit hard copy of drawings).

(b) Agencies may exercise broad discretion in selecting the

hardware and software that will be used in conducting electronic

commerce. However, as required by Section 30 of the OFPP Act (41 U.S.C.

426), the head of each agency, after consulting with the Administrator

of OFPP, shall ensure that systems, technologies, procedures, and

processes used by the agency to conduct electronic commerce--

(1) Are implemented uniformly throughout the agency, to the maximum

extent practicable;

(2) Are implemented only after considering the full or partial use

of existing infrastructures, (e.g., the Federal Acquisition Computer

Network (FACNET));

(3) Facilitate access to Government acquisition opportunities by

small business concerns, small disadvantaged business concerns, and

women-owned small business concerns;

(4) Include a means of providing widespread public notice of

acquisition opportunities through the single, Governmentwide point of

entry and a means of responding to notices or solicitations

electronically; and

(5) Comply with nationally and internationally recognized standards

that broaden interoperability and ease the electronic interchange of

information, such as standards established by the National Institute of

Standards and Technology.

(c) Before using electronic commerce, the agency head shall ensure

that the agency systems are capable of ensuring authentication and

confidentiality commensurate with the risk and magnitude of the harm

from loss, misuse, or unauthorized access to or modification of the

information.

PART 5--PUBLICIZING CONTRACT ACTIONS

4. Section 5.101 is amended by revising paragraph (a)(2)(ii) and

the last sentence of (a)(2)(iv) to read as follows:

5.101 Methods of disseminating information.

* * * * *

(a) * * *

(2) * * *

(ii) The contracting officer need not comply with the display

requirements of this section when the exemptions at 5.202(a)(1), (a)(4)

through (a)(9), or (a)(11) apply, when oral or FACNET solicitations are

used, or when providing access to a notice of proposed contract action

through the single, Governmentwide point of entry and the notice

permits the public to respond to the solicitation electronically.

* * * * *

(iv) * * * Contracting offices using electronic systems for public

posting that are not accessible outside the installation shall

periodically publicize the methods for accessing such information.

* * * * *

5. Section 5.102 is amended by revising paragraphs (a)(2) and

(a)(7) to read as follows:

5.102 Availability of solicitations.

(a) * * *

(2) Provide copies of a solicitation issued under other than full

and open competition to firms requesting copies that were not initially

solicited, but only after advising the requester of the determination

to limit the solicitation to a specified firm or firms as authorized

under Part 6 of the FAR;

* * * * *

(7) If electronic commerce is employed in the solicitation process,

availability of the solicitation may be limited to the electronic

medium.

* * * * *

6. Section 5.202 is amended by revising paragraph (a)(13), by

removing (a)(14), and by redesignating (a)(15) as (a)(14). The revised

text reads as follows:

5.202 Exceptions.

* * * * *

(a) * * *

(13) The proposed contract action--

(i) Is for an amount not expected to exceed the simplified

acquisition threshold;

(ii) Will be made through FACNET or another means that provides

access to the notice of proposed contract action through the single,

Governmentwide point of entry; and

(iii) Permits the public to respond to the solicitation

electronically; or

* * * * *

7. Section 5.203 is amended by revising paragraph (b) to read as

follows:

5.203 Publicizing and response time.

* * * * *

(b) The contracting officer shall establish a solicitation response

time that will afford potential offerors a reasonable opportunity to

respond to--each proposed contract action (including actions via FACNET

or for which the notice of proposed contract action is accessible

through the single, Governmentwide point of entry), in an amount estimated to be greater than $25,000, but not greater than the simplified acquisition

threshold; or each contract action for the acquisition of commercial

items in an amount estimated to be greater than $25,000. The

contracting officer should consider the circumstances of the individual

acquisition, such as the complexity, commerciality, availability, and

urgency, when establishing the solicitation response time.

* * * * *

5.202, 5.203, 5.205, 5.207 [Amended]

8. In addition to the amendments set forth above, in Subpart 5.2,

remove the term ``contract action'' or ``contract actions'' and add

``proposed contract action'' or ``proposed contract actions'',

respectively, in the following places:

a. Section 5.202(a)(2), (a)(3), (a)(4), (a)(5), (a)(6), (a)(7),

(a)(8) (twice), (a)(9), (a)(10), (a)(11) (twice), (a)(12) (4 times),

and (a)(14);

b. Section 5.203 introductory paragraph, (a) introductory text,

(c), (d), (e) (twice), and (g);

c. Section 5.205(d)(2);

d. Section 5.207(c)(2)(xi), (e)(3) (twice), and (h).

9. Section 5.301 is amended by revising paragraph (b)(7) to read as

follows:

5.301 General.

* * * * *

(b) * * *

(7) The contract action--

(i) Is for an amount not greater than the simplified acquisition

threshold;

(ii) Was conducted by using FACNET, or access to the notice of

proposed contract action was provided through the single,

Governmentwide point of entry; and

(iii) Permitted the public to respond to the solicitation

electronically; or

* * * * *

10. Section 5.503 is amended by revising paragraph (a)(2) to read

as follows:

5.503 Procedures.

(a) * * *

(2) The contracting officer shall use the SF 1449 for paper

solicitations. The SF 1449 shall be used to make awards or place orders

unless the award/order is made by using electronic commerce or by using

the Governmentwide commercial purchase card for micropurchases.

* * * * *

PART 13--SIMPLIFIED ACQUISITION PROCEDURES

11. Section 13.003 is amended by removing paragraph (c);

redesignating paragraphs (d) through (i) as (c) through (h),

respectively; and revising newly redesignated paragraphs (f) and (h)(3)

to read as follows:

13.003 Policy.

* * * * *

(f) Agencies shall maximize the use of electronic commerce when

practicable and cost-effective (see Subpart 4.5). Drawings and lengthy

specifications can be provided off-line in hard copy or through other

appropriate means.

* * * * *

(h) * * *

(3) Consider all quotations or offers that are timely received. For

evaluation of quotations or offers received electronically, see 13.106-

2(b)(3); and

* * * * *

12. Section 13.102 is amended by revising the introductory text of

paragraph (a) to read as follows:

13.102 Source list.

(a) Each contracting office should maintain a source list (or

lists, if more convenient). A list of new supply sources may be

obtained from the Procurement Marketing and Access Network (PRO-Net) of

the Small Business Administration. The list should identify the status

of each source (when the status is made known to the contracting

office) in the following categories:

* * * * *

13. Section 13.104 is amended by revising the first sentence of

paragraph (b) to read as follows:

13.104 Promoting competition.

* * * * *

(b) If using simplified acquisition procedures and not using either

FACNET or providing access to the notice of proposed contract action

through the single, Governmentwide point of entry, maximum practicable

competition ordinarily can be obtained by soliciting quotations or

offers from sources within the local trade area. * * *

14. Section 13.105 is amended by revising paragraph (a)(1) to read

as follows:

13.105 Synopsis and posting requirements.

(a) * * *

(1)(i) FACNET is used for an acquisition at or below the simplified

acquisition threshold; or

(ii) The single, Governmentwide point of entry is used at or below

the simplified acquisition threshold for providing widespread public

notice of acquisition opportunities and offerors are provided a means

of responding to the solicitation electronically; or

* * * * *

15. Section 13.106-1 is amended by revising paragraphs (c)(1)(ii)

and (f) to read as follows:

13.106-1 Soliciting competition.

* * * * *

(c) * * *

(1) * * *

(ii) Oral solicitation is more efficient than soliciting through

available electronic commerce alternatives; and

* * * * *

(f) Inquiries. An agency should respond to inquiries received

through any medium (including FACNET) if doing so would not interfere

with the efficient conduct of the acquisition. For an acquisition

conducted through FACNET, an agency must respond to telephonic or

facsimile inquiries only if it is unable to receive inquiries through

FACNET.

16. Section 13.106-2 is amended by revising the introductory text

of paragraph (b)(3) to read as follows:

13.106-2 Evaluation of quotations or offers.

* * * * *

(b) * * *

(3) For acquisitions conducted using FACNET or a method that

permits electronic response to the solicitation, the contracting

officer may--

* * * * *

17. Section 13.106-3 is amended by revising paragraph (c) to read

as follows:

13.106-3 Award and documentation.

* * * * *

(c) Notification. For acquisitions that do not exceed the

simplified acquisition threshold and for which automatic notification

is not provided through FACNET or an electronic commerce method that

employs widespread electronic public notice, notification to

unsuccessful suppliers shall be given only if requested or required by

5.301.

* * * * *

13.307 [Amended]

18. Section 13.307 is amended in paragraph (b)(1) by removing

``other electronic means,'' and inserting ``electronically,''.

PART 14--SEALED BIDDING

19. Section 14.205-1 is amended by revising the second sentence of

paragraph (a) to read as follows:

14.205-1 Establishment of lists.

(a) * * * This rule need not be followed, however, when the

requirements of the contracting office can be obtained through use of

simplified acquisition procedures (see part 13); the requirements are

nonrecurring; or electronic commerce methods are used that transmit

solicitations or notices of procurement opportunities automatically to

all interested sources. * * *

* * * * *

14.400 [Amended]

20. Section 14.400 is amended by removing ``contract'' and

inserting ``contracts''.

PART 32--CONTRACT FINANCING

32.1103 [Amended]

21. Section 32.1103 is amended in paragraph (a) by removing

``13.003(f)'' and inserting ``13.003(e)''.

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 6, 24, 33, and 52

[FAC 97-09; FAR Case 97-015; Item III]

Federal Acquisition Regulation; Alternative Dispute Resolution--

1996

AGENCIES: Department of Defense (DoD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed on a final rule amending

the Federal Acquisition Regulation (FAR) to implement the

Administrative Dispute Resolution Act of 1996 (Pub. L. 104-320) and

Section 4321(a)(7) of the Clinger-Cohen Act of 1996 (Pub. L. 104-106).

This regulatory action was not subject to Office of Management and

Budget review under Executive Order 12866, dated September 30, 1993,

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

EFFECTIVE DATE: December 29, 1998.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS

Building, Washington, DC 20405, (202) 501-4755, for information

pertaining to status or publication schedules. For clarification of

content, contact Mr. Jack O'Neill, Procurement Analyst, at (202) 501-

3856. Please cite FAC 97-09, FAR case 97-015.

SUPPLEMENTARY INFORMATION:

A. Background

This final rule amends FAR Parts 6, 24, 33, and 52 to implement the

Administrative Dispute Resolution Act of 1996 (Pub. L. 104-320) and

Section 4321(a)(7) of the Clinger-Cohen Act of 1996 (Pub. L. 104-106).

The rule makes clear the authority to contract with a neutral person as

an exception to requirements for full and open competition, revises

requirements for certification of a claim under the Administrative

Dispute Resolution Act to conform to the requirements under the

Contract Disputes Act, and specifies that certain dispute resolution

communications are exempt from disclosure under the Freedom of

Information Act.

A proposed rule was published in the Federal Register at 62 FR

55678, October 27, 1997. Comments were received from eight sources. All

comments were considered in the development of the final rule.

B. 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 the rule adds guidance

pertaining to, but does not significantly alter the procedures for,

alternative dispute resolution. Alternative dispute resolution

procedures allow voluntary resolution of issues in controversy.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq. However, it does

reduce the information collection requirements relating to

Certification of Claims, OMB Control No. 9000-0035. Accordingly, a

request to reduce the total burden hours has been submitted to OMB.

List of Subjects in 48 CFR Parts 6, 24, 33, and 52

Government procurement.

Dated: October 22, 1998.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 6, 24, 33, and 52 are amended as set forth

below:

1. The authority citation for 48 CFR Parts 6, 24, 33, and 52

continues to read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

PART 6--COMPETITION REQUIREMENTS

2. Section 6.302-3 is amended by revising paragraph (a)(2)(iii) to

read as follows:

6.302-3 Industrial mobilization; engineering, developmental, or

research capability; or expert services.

(a) * * *

(2) * * *

(iii) To acquire the services of an expert or neutral person (see

33.201) for any current or anticipated litigation or dispute.

* * * * *

PART 24--PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION

3. Section 24.202 is amended by adding paragraph (c) read as

follows:

24.202 Prohibitions.

* * * * *

(c) A dispute resolution communication that is between a neutral

person and a party to alternative dispute resolution proceedings, and

that may not be disclosed under 5 U.S.C. 574, is exempt from disclosure

under the Freedom of Information Act (5 U.S.C. 552(b)(3)).

PART 33--PROTESTS, DISPUTES, AND APPEALS

4. Section 33.201 is amended by revising the definition

``Alternative dispute resolution (ADR)'' to read as follows:

33.201 Definitions.

* * * * *

Alternative dispute resolution (ADR) means any type of procedure or

combination of procedures voluntarily used to resolve issues in

controversy. These procedures may include, but are not limited to,

conciliation, facilitation, mediation, fact-finding, minitrials,

arbitration, and use of ombudsmen.

* * * * *

33.204 [Amended]

5. Section 33.204 is amended in the fifth sentence by removing

``Public Law 100-522'' and inserting ``(5 U.S.C. 571, et seq.)''.

6. Section 33.207 is amended by revising paragraph (a) to read as

follows:

33.207 Contractor certification.

(a) Contractors shall provide the certification specified in

paragraph (c) of this section when submitting any claim exceeding

$100,000.

* * * * *

7. Section 33.214 is amended at the end of paragraph (a)(3) by

inserting ``and''; at the end of paragraph (a)(4) by removing ``; and''

and inserting a period; by removing paragraph (a)(5); by revising

paragraph (b); and by adding paragraphs (f) and (g) to read as follows:

33.214 Alternative dispute resolution (ADR).

* * * * *

(b) If the contracting officer rejects a contractor's request for

ADR proceedings, the contracting officer shall provide the contractor a

written explanation citing one or more of the conditions in 5 U.S.C.

572(b) or such other specific reasons that ADR procedures are

inappropriate for the resolution of the dispute. In any case where a

contractor rejects a request of an agency for ADR proceedings, the

contractor shall inform the agency in writing of the contractor's

specific reasons for rejecting the request.

* * * * *

(f)(1) A solicitation shall not require arbitration as a condition

of award, unless arbitration is otherwise required by law. Contracting

officers should have flexibility to select the appropriate ADR

procedure to resolve the issues in controversy as they arise.

(2) An agreement to use arbitration shall be in writing and shall

specify a maximum award that may be issued by the arbitrator, as well

as any other conditions limiting the range of possible outcomes.

(g) Binding arbitration, as an ADR procedure, may be agreed to only

as specified in agency guidelines. Such guidelines shall provide advice

on the appropriate use of binding arbitration and when an agency has

authority to settle an issue in controversy through binding

arbitration.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

8. Section 52.233-1 is amended by revising the date of the clause

and paragraphs (d)(2)(i) and (g) to read as follows:

52.233-1 Disputes.

* * * * *

Disputes (Dec 1998)

* * * * *

(d)(2)(i) The Contractor shall provide the certification

specified in paragraph (d)(2)(iii) of this clause when submitting

any claim exceeding $100,000.

* * * * *

(g) If the claim by the Contractor is submitted to the

Contracting Officer or a claim by the Government is presented to the

Contractor, the parties, by mutual consent, may agree to use

alternative dispute resolution (ADR). If the Contractor refuses an

offer for ADR, the Contractor shall inform the Contracting Officer,

in writing, of the Contractor's specific reasons for rejecting the

offer.

* * * * *

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 15, 31 and 52

[FAC 97-09; FAR Case 89-012; Item IV]

Federal Acquisition Regulation; Pay-As-You-Go Pension Costs

AGENCIES: Department of Defense (DoD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed on a final rule amending

the Federal Acquisition Regulation (FAR) for consistency with the cost

accounting standards for composition and measurement of pension cost

and adjustment and allocation of pension cost. This regulatory action

was not subject to Office of Management and Budget review under

Executive Order 12866, dated September 30, 1993. This is not a major

rule under 5 U.S.C. 804.

EFFECTIVE DATE: December 29, 1998.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS

Building, Washington, DC 20405, (202) 501-4755, for information

pertaining to status or publication schedules. For clarification of

content, contact Mr. Jeremy F. Olson at (202) 501-0692. Please cite FAC

97-09, FAR case 89-012.

SUPPLEMENTARY INFORMATION:

A. Background

An interim rule was published in the Federal Register at 54 FR

13022, March 29, 1989. The issuance of an interim rule was necessary

because the United States Court of Appeals had ruled that FAR 31.205-

6(j)(5) was inconsistent with 48 CFR 9904.412, Cost accounting standard

for composition and measurement of pension cost (CAS 412), and that the

controlling regulation was CAS 412.

Since the 1989 interim FAR rule was published, the Office of

Federal Procurement Policy, Cost Accounting Standards Board, made

substantial changes to CAS 412 and 48 CFR 9904.413, Adjustment and

allocation of pension cost (CAS 413), relating to accounting for

pension costs under negotiated Government contracts. These proposed

changes were published and made available for public comment on

November 5, 1993 (58 FR 58999). Public comments were received and

considered in the development of the final CAS rule which was published

in the Federal Register at 60 FR 16534, March 30, 1995. The changes in

the final CAS rule addressed pension cost recognition for qualified

pension plans subject to the tax-deductibility limits of the Federal

Tax Code, problems associated with pension plans that are not qualified

plans under the Federal Tax Code, and problems associated with

overfunded pension plans.

A proposed FAR rule was published in the Federal Register at 62 FR

49900, September 23, 1997, to provide consistency with the revised CAS

412 and CAS 413. The rule proposed to (1) revise the definitions at FAR

31.001 to conform with the CAS Board's definitions; (2) delete

references to ``unfunded pension plans'' since CAS 412 and CAS 413 no

longer refer to unfunded pension plans; (3) add new language to FAR

31.205-6(j) to address transfer of assets to another account within the

same fund, to address the allowability of costs for nonqualified

pension plans using the pay-as-you-go cost method, and to address both

CAS requirements and all other situations not covered by CAS; (4) add

new language at FAR 31.205-6(j)(6), which was previously reserved, to

refer to CAS 412 and CAS 413 for treatment of pension plans using the

pay-as-you-go cost method; (5) provide other editorial changes to make

FAR 31.001 and 31.205-6 consistent with the language of CAS 412 and CAS

413; and (6) revise the clause at FAR 52.215-27, Termination of Defined

Benefit Pension Plans, to conform the clause with the proposed FAR Part 31 changes. Six sources submitted comments in response to the proposed FAR rule. All comments were considered in the development of this final rule.

This final rule amends FAR 15.408, Solicitation provisions and

contract clauses; FAR 31.001, Definitions; FAR 31.205-6, Compensation

for personal services; and FAR 52.215-15, Pension Adjustments and Asset

Reversions. The final rule differs from the proposed rule by--(1)

revising FAR 31.205-6(j)(3)(i)(A) to address the deferral of pension

costs pursuant to a waiver under the Employee's Retirement Income

Security Act of 1974 (ERISA); (2) revising FAR 31.205-6(j)(3)(v) to

clarify that the provisions of FAR 31.205-6(j)(4) apply if the

withdrawal of assets is a pension plan termination under ERISA; (3)

revising FAR 31.205-6(j)(4)(i) and 52.215-15(b) to clarify the

calculation of the adjustment amounts for both CAS and non-CAS-covered

contracts; and (4) making a number of editorial revisions, including

changes (e.g., renumbering FAR 52.215-27 as FAR 52.215-15) resulting

from publication of Federal Acquisition Circular 97-02 on September 30,

1997 (62 FR 51224).

B. 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 most contracts awarded

to small entities use simplified acquisition procedures or are awarded

on a competitive, fixed-price basis, and do not require application of

the cost principle contained in this rule.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 15, 31, and 52

Government procurement.

Dated: October 22, 1998.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 15, 31, and 52 are amended as set forth

below:

1. The authority citation for 48 CFR Parts 15, 31, and 52 continues

to read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

PART 15--CONTRACTING BY NEGOTIATION

2. Section 15.408 is amended by revising paragraph (g) to read as

follows:

15.408 Solicitation provisions and contract clauses.

* * * * *

(g) Pension Adjustments and Asset Reversions. The contracting

officer shall insert the clause at 52.215-15, Pension Adjustments and

Asset Reversions, in solicitations and contracts for which it is

anticipated that cost or pricing data will be required or for which any

preaward or postaward cost determinations will be subject to Part 31 of

the FAR.

* * * * *

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

3. Section 31.001 is amended by removing the definitions

``Actuarial liability'' ``Termination of gain or loss'' and ``Unfunded

pension plan'' ; by adding, in alphabetical order, the definitions

``Actuarial accrued liability'', ``Nonqualified pension plan'',

``Qualified pension plan'' and ``Termination of employment gain or

loss'' ; and by revising the definitions of ``Accrued benefit cost

method'', ``Actuarial assumption'', ``Actuarial cost method'',

``Actuarial valuation'', ``Funded pension cost'', ``Normal cost'',

``Pension plan'', and ``Projected benefit cost method'', to read as

follows:

31.001 Definitions.

Accrued benefit cost method means an actuarial cost method under

which units of benefits are assigned to each cost accounting period and

are valued as they accrue; i.e., based on the services performed by

each employee in the period involved. The measure of normal cost under

this method for each cost accounting period is the present value of the

units of benefit deemed to be credited to employees for service in that

period. The measure of the actuarial accrued liability at a plan's

inception date is the present value of the units of benefit credited to

employees for service prior to that date. (This method is also known as

the unit credit cost method without salary projection.)

* * * * *

Actuarial accrued liability means pension cost attributable, under

the actuarial cost method in use, to years prior to the current period

considered by a particular actuarial valuation. As of such date, the

actuarial accrued liability represents the excess of the present value

of future benefits and administrative expenses over the present value

of future normal costs for all plan participants and beneficiaries. The

excess of the actuarial accrued liability over the actuarial value of

the assets of a pension plan is the unfunded actuarial liability. The

excess of the actuarial value of the assets of a pension plan over the

actuarial accrued liability is an actuarial surplus and is treated as a

negative unfunded actuarial liability.

Actuarial assumption means an estimate of future conditions

affecting pension cost; e.g., mortality rate, employee turnover,

compensation levels, earnings on pension plan assets, and changes in

values of pension plan assets.

Actuarial cost method means a technique that uses actuarial

assumptions to measure the present value of future pension benefits and

pension plan administrative expenses, and that assigns the cost of such

benefits and expenses to cost accounting periods. The actuarial cost

method includes the asset valuation method used to determine the

actuarial value of the assets of a pension plan.

* * * * *

Actuarial valuation means the determination, as of a specified

date, of the normal cost, actuarial accrued liability, actuarial value

of the assets of a pension plan, and other relevant values for the

pension plan.

* * * * *

Funded pension cost means the portion of pension cost for a current

or prior cost accounting period that has been paid to a funding agency.

* * * * *

Nonqualified pension plan means any pension plan other than a

qualified pension plan as defined in this part.

Normal cost means the annual cost attributable, under the actuarial

cost method in use, to current and future years as of a particular

valuation date excluding any payment in respect of an unfunded

actuarial liability.

* * * * *

Pension plan means a deferred compensation plan established and

maintained by one or more employers to provide systematically for the

payment of benefits to plan participants after their retirements,

provided that the benefits are paid for life or are payable for life at

the option of the employees. Additional benefits such as permanent and

total disability and death payments, and survivorship payments to beneficiaries of deceased employees, may be an integral part of a pension plan.

* * * * *

Projected benefit cost method means either--

(1) Any of the several actuarial cost methods that distribute the

estimated total cost of all of the employees' prospective benefits over

a period of years, usually their working careers; or

(2) A modification of the accrued benefit cost method that

considers projected compensation levels.

* * * * *

Qualified pension plan means a pension plan comprising a definite

written program communicated to and for the exclusive benefit of

employees that meets the criteria deemed essential by the Internal

Revenue Service as set forth in the Internal Revenue Code for

preferential tax treatment regarding contributions, investments, and

distributions. Any other plan is a nonqualified pension plan.

* * * * *

Termination of employment gain or loss means an actuarial gain or

loss resulting from the difference between the assumed and actual rates

at which pension plan participants separate from employment for reasons

other than retirement, disability, or death.

* * * * *

4. Section 31.201-5 is amended by revising the last sentence to

read as follows:

31.201-5 Credits.

* * * See 31.205-6(j)(4) for rules governing refund or credit to

the Government associated with pension adjustments and asset

reversions.

5. Section 31.205-6 is amended by revising paragraphs (j)(1)

through (j)(6) to read as follows:

31.205-6 Compensation for personal services.

* * * * *

(j) Pension costs. (1) A pension plan, as defined in 31.001, is a

deferred compensation plan. Additional benefits such as permanent and

total disability and death payments and survivorship payments to

beneficiaries of deceased employees may be treated as pension costs,

provided the benefits are an integral part of the pension plan and meet

all the criteria pertaining to pension costs.

(2) Pension plans are normally segregated into two types of plans:

defined-benefit or defined-contribution pension plans. The cost of all

defined-benefit pension plans shall be measured, allocated, and

accounted for in compliance with the provisions of 48 CFR 9904.412,

Cost accounting standard for composition and measurement of pension

cost, and 48 CFR 9904.413, Adjustment and allocation of pension cost.

The costs of all defined-contribution pension plans shall be measured,

allocated, and accounted for in accordance with the provisions of 48

CFR 9904.412 and 48 CFR 9904.413. Pension costs are allowable subject

to the referenced standards and the cost limitations and exclusions set

forth in paragraphs (j)(2)(i) and (j)(3) through (8) of this

subsection.

(i) Except for nonqualified pension plans using the pay-as-you-go

cost method, to be allowable in the current year, pension costs must be

funded by the time set for filing of the Federal income tax return or

any extension thereof. Pension costs assigned to the current year, but

not funded by the tax return time, shall not be allowable in any

subsequent year. For nonqualified pension plans using the pay-as-you-go

cost method, to be allowable in the current year, pension costs must be

allocable in accordance with 48 CFR 9904.412-50(d)(3).

(ii) Pension payments must be reasonable in amount and must be paid

pursuant to--an agreement entered into in good faith between the

contractor and employees before the work or services are performed; and

the terms and conditions of the established plan. The cost of changes

in pension plans that are discriminatory to the Government or are not

intended to be applied consistently for all employees under similar

circumstances in the future are not allowable.

(iii) Except as provided for early retirement benefits in paragraph

(j)(7) of this subsection, one-time-only pension supplements not

available to all participants of the basic plan are not allowable as

pension costs unless the supplemental benefits represent a separate

pension plan and the benefits are payable for life at the option of the

employee.

(iv) Increases in payments to previously retired plan participants

covering cost-of-living adjustments are allowable if paid in accordance

with a policy or practice consistently followed.

(3) Defined-benefit pension plans. This paragraph covers pension

plans in which the benefits to be paid or the basis for determining

such benefits are established in advance and the contributions are

intended to provide the stated benefits. The cost limitations and

exclusions pertaining to defined-benefit plans are as follows:

(i)(A) Except for nonqualified pension plans, pension costs (see 48

CFR 9904.412-40(a)(1)) assigned to the current accounting period, but

not funded during it, shall not be allowable in subsequent years

(except that a payment made to a fund by the time set for filing the

Federal income tax return or any extension thereof is considered to

have been made during such taxable year). However, any portion of

pension cost computed for a cost accounting period, that exceeds the

amount required to be funded pursuant to a waiver granted under the

provisions of the Employee's Retirement Income Security Act of 1974

(ERISA), will be allowable in those future accounting periods in which

the funding of such excess amounts occurs (see 48 CFR 9904.412-

50(c)(5)).

(B) For nonqualified pension plans, except those using the pay-as-

you-go cost method, allowable costs are limited to the amount allocable

in accordance with 48 CFR 9904.412-50(d)(2).

(C) For nonqualified pension plans using the pay-as-you-go cost

method, allowable costs are limited to the amounts allocable in

accordance with 48 CFR 9904.412-50(d)(3).

(ii) Any amount funded in excess of the pension cost assigned to a

cost accounting period is not allowable and shall be accounted for as

set forth at 48 CFR 9904.412-50(a)(4), and shall be allowable in the

future period to which it is assigned, to the extent it is allocable,

reasonable, and not otherwise unallowable.

(iii) Increased pension costs caused by delay in funding beyond 30

days after each quarter of the year to which they are assignable are

unallowable. If a composite rate is used for allocating pension costs

between the segments of a company and if, because of differences in the

timing of the funding by the segments, an inequity exists, allowable

pension costs for each segment will be limited to that particular

segment's calculation of pension costs as provided for in 48 CFR

9904.413-50(c). Determinations of unallowable costs shall be made in

accordance with the actuarial cost method used in calculating pension

costs.

(iv) Allowability of the cost of indemnifying the Pension Benefit

Guaranty Corporation (PBGC) under ERISA Section 4062 or 4064 arising

from terminating an employee deferred compensation plan will be

considered on a case-by-case basis, provided that if insurance was

required by the PBGC under ERISA Section 4023, it was so obtained and

the indemnification payment is not recoverable under the insurance.

Consideration under the foregoing circumstances will be primarily for

the purpose of appraising the extent to which the indemnification payment is allocable to Government work. If a beneficial or other equitable relationship

exists, the Government will participate, despite the requirements of

31.205-19(a)(3) and (b), in the indemnification payment to the extent

of its fair share.

(v) Increased pension costs resulting from the withdrawal of assets

from a pension fund and transfer to another employee benefit plan fund,

or transfer of assets to another account within the same fund, are

unallowable except to the extent authorized by an advance agreement. If

the withdrawal of assets from a pension fund is a plan termination

under ERISA, the provisions of paragraph (j)(4) of this subsection

apply. The advance agreement shall--

(A) State the amount of the Government's equitable share in the

gross amount withdrawn or transferred; and

(B) Provide that the Government receive a credit equal to the

amount of the Government's equitable share of the gross withdrawal or

transfer.

(4) Pension adjustments and asset reversions. (i) For segment

closings, pension plan terminations, or curtailment of benefits, the

adjustment amount shall be the amount measured, assigned, and allocated

in accordance with 48 CFR 9904.413-50(c)(12) for contracts and

subcontracts that are subject to Cost Accounting Standards (CAS) Board

rules and regulations (48 CFR Chapter 99). For contracts and

subcontracts that are not subject to CAS, the adjustment amount shall

be the amount measured, assigned, and allocated in accordance with 48

CFR 9904.413-50(c)(12), except the numerator of the fraction at 48 CFR

9904.413-50(c)(12)(vi) shall be the sum of the pension plan costs

allocated to all non-CAS-covered contracts and subcontracts that are

subject to Subpart 31.2 or for which cost or pricing data were

submitted.

(ii) For all other situations where assets revert to the

contractor, or such assets are constructively received by it for any

reason, the contractor shall, at the Government's option, make a refund

or give a credit to the Government for its equitable share of the gross

amount withdrawn. The Government's equitable share shall reflect the

Government's participation in pension costs through those contracts for

which cost or pricing data were submitted or that are subject to

Subpart 31.2. Excise taxes on pension plan asset reversions or

withdrawals under this paragraph (j)(4)(ii) are unallowable in

accordance with 31.205-41(b)(6).

(5) Defined-contribution pension plans. This paragraph covers those

pension plans in which the contributions are established in advance and

the level of benefits is determined by the contributions made. It also

covers profit sharing, savings plans, and other such plans, provided

the plans fall within the definition of a pension plan in paragraph

(j)(1) of this subsection.

(i) Allowable pension cost is limited to the net contribution

required to be made for a cost accounting period after taking into

account dividends and other credits, where applicable. However, any

portion of pension cost computed for a cost accounting period that

exceeds the amount required to be funded pursuant to a waiver granted

under the provisions of ERISA will be allowable in those future

accounting periods in which the funding of such excess amounts occurs

(see 48 CFR 9904.412-50(c)(5)).

(ii) The provisions of paragraphs (j)(3) (ii) and (iv) of this

subsection apply to defined-contribution plans.

(6) Pension plans using the pay-as-you-go cost method. The cost of

pension plans using the pay-as-you-go cost method shall be measured,

allocated, and accounted for in accordance with 48 CFR 9904.412 and

9904.413. Pension costs for a pension plan using the pay-as-you-go cost

method shall be allowable to the extent they are allocable, reasonable,

and not otherwise unallowable.

* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

6. Section 52.215-15 is revised to read as follows:

52.215-15 Pension adjustments and asset reversions.

As prescribed in 15.408(g), insert the following clause:

Pension Adjustments and Asset Reversions (Dec 1998)

(a) The Contractor shall promptly notify the Contracting Officer

in writing when it determines that it will terminate a defined-

benefit pension plan or otherwise recapture such pension fund

assets.

(b) For segment closings, pension plan terminations, or

curtailment of benefits, the adjustment amount shall be the amount

measured, assigned, and allocated in accordance with 48 CFR

9904.413-50(c)(12) for contracts and subcontracts that are subject

to Cost Accounting Standards (CAS) Board rules and regulations (48

CFR Chapter 99). For contracts and subcontracts that are not subject

to CAS, the adjustment amount shall be the amount measured,

assigned, and allocated in accordance with 48 CFR 9904.413-

50(c)(12), except the numerator of the fraction at 48 CFR 9904.413-

50(c)(12)(vi) shall be the sum of the pension plan costs allocated

to all non-CAS-covered contracts and subcontracts that are subject

to Federal Acquisition Regulation (FAR) Subpart 31.2 or for which

cost or pricing data were submitted.

(c) For all other situations where assets revert to the

Contractor, or such assets are constructively received by it for any

reason, the Contractor shall, at the Government's option, make a

refund or give a credit to the Government for its equitable share of

the gross amount withdrawn. The Government's equitable share shall

reflect the Government's participation in pension costs through

those contracts for which cost or pricing data were submitted or

that are subject to FAR Subpart 31.2.

(d) The Contractor shall include the substance of this clause in

all subcontracts under this contract that meet the applicability

requirement of FAR 15.408(g).

(End of clause)

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 22 and 52

[FAC 97-09; FAR Case 96-610; Item V]

Federal Acquisition Regulation; Rehabilitation Act, Workers With

Disabilities

AGENCIES: Department of Defense (DoD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule adopted as final without change.

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed to adopt the interim rule

published in the Federal Register at 63 FR 34073, June 22, 1998, as a

final rule without change. The rule amends the Federal Acquisition

Regulation (FAR) to implement revised Department of Labor regulations

regarding affirmative action to employ and advance in employment

qualified individuals with disabilities. This regulatory action was not

subject to Office of Management and Budget review under Executive Order

12866, dated September 30, 1993, and is not a major rule under 5 U.S.C.

804.

EFFECTIVE DATE: October 30, 1998.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS

Building, Washington, DC 20405, (202) 501-4755, for information pertaining to status or publication schedules. For clarification of content, contact Mr. Jack O'Neill, Procurement Analyst, at (202) 501-3856. Please cite FAC 97-09, FAR case

96-610.

SUPPLEMENTARY INFORMATION:

A. Background

On June 22, 1998, FAR Case 96-610, Rehabilitation Act, Workers with

Disabilities, was published in the Federal Register as an interim rule.

The FAR rule implemented Department of Labor (DoL) regulations at 41

CFR 60-741 that implement Section 503 of the Rehabilitation Act of 1973

(29 U.S.C. 793). The rule amended FAR Subpart 22.14 and the clauses at

52.212-5, 52.213-4, and 52.222-36 to conform to the DoL regulations. No

public comments were received in response to the interim rule. The

interim rule is being adopted as a final rule without change.

B. 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 the rule merely

implements existing Department of Labor regulations and imposes no new

requirements.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 22 and 52

Government procurement.

Dated: October 22, 1998.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Interim Rule Adopted as Final Without Change

Accordingly, the interim rule amending 48 CFR Parts 22 and 52,

which was published at 63 FR 34073, June 22, 1998, is adopted as a

final rule without change. [NOTE: this was in FAC 97-05]

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 31

[FAC 97-09; FAR Case 97-036; Item VI]

Federal Acquisition Regulation; Civil Defense Costs

AGENCIES: Department of Defense (DoD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed on a final rule amending

the Federal Acquisition Regulation (FAR) to delete the civil defense

cost principle. This regulatory action was not subject to Office of

Management and Budget review under Executive Order 12866, dated

September 30, 1993, and is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: December 29, 1998.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS

Building, Washington, DC 20405, (202) 501-4755, for information

pertaining to status or publication schedules. For clarification of

content, contact Ms. Linda Nelson, Procurement Analyst, at (202) 501-

1900. Please cite FAC 97-09, FAR case 97-036.

SUPPLEMENTARY INFORMATION:

A. Background

A proposed rule was published in the Federal Register on March 20,

1998 (63 FR 13771). The proposed rule deleted the cost principle at FAR

31.205-5, Civil defense costs. With the end of the Cold War, the

special guidance provided in this cost principle is no longer deemed

necessary. The acceptability of this type of costs will remain governed

by the allocability, allowability, and reasonableness criteria

discussed in FAR Part 31. The proposed rule is converted to a final

rule without change.

One comment was received in response to the proposed rule. This

comment was considered in the development of the final rule.

B. 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 most contracts awarded

to small entities use simplified acquisition procedures or are awarded

on a competitive, fixed-price basis, and do not require application of

the FAR cost principles.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the change to

the FAR does not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 31

Government procurement.

Dated: October 22, 1998.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Part 31 is amended 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. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

31.205-5 [Removed and Reserved]

2. Section 31.205-5 is removed and reserved.

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 31

[FAC 97-09; FAR Case 95-020; Item VII]

Federal Acquisition Regulation; Costs Related to Legal/Other

Proceedings

AGENCIES: Department of Defense (DoD), General Services Administration

(GSA),

and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed on a final rule amending

the Federal Acquisition Regulation (FAR) to clarify the allowability of

costs incurred for qui tam suits in which the Government does not

intervene. This regulatory action was not subject to Office of

Management and Budget review under Executive Order 12866, dated

September 30, 1993. This is not a major rule under 5 U.S.C. 804.

EFFECTIVE DATE: December 29, 1998.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS

Building, Washington, DC 20405, (202) 501-4755, for information

pertaining to status or publication schedules. For clarification of

content, contact Ms. Linda Nelson, Procurement Analyst, at (202) 501-

1900. Please cite FAC 97-09, FAR case 95-020.

SUPPLEMENTARY INFORMATION:

A. Background

A proposed rule was published in the Federal Register on June 20,

1996 (61 FR 31790). Seven sources submitted public comments. All

comments were considered in developing the final rule.

This final rule clarifies the cost principle at FAR 31.205-47 as it

relates to qui tam suits not joined in by the Government. The final

rule also clarifies, at FAR 31.205-47(e)(3), that the maximum

reimbursement contractors may receive for legal costs in connection

with agreements reached under FAR 31.205-47(c) is 80 percent of

otherwise allowable and allocable incurred costs.

Industry has commented that this coverage should be effective

prospectively. After consideration of these comments, it is concluded

that this coverage is properly characterized as a clarification.

Nevertheless, it is recognized that certain Government contracting

personnel and contractors may have had common misinterpretations of the

regulatory coverage. Indeed, those inconsistencies are the catalyst

behind this clarification. On August 24, 1995, the Defense Contract

Audit Agency issued audit guidance that clarified audit treatment for

qui tam legal fees. For qui tam legal fees incurred before August 24,

1995, if the Government contracting personnel and the contractor shared

a common misinterpretation of the regulatory coverage, the contracting

officer, in consultation with his or her legal advisors, should

determine the appropriate treatment of those costs on a case-by-case

basis.

B. 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 most contracts awarded

to small entities use simplified acquisition procedures or are awarded

on a competitive fixed-price basis, and do not require application of

the cost principle contained in this rule.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 31

Government procurement.

Dated: October 22, 1998.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Part 31 is amended 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. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

2. Section 31.205-47 is amended by revising the introductory text

of paragraph (b); by redesignating (c) as (c)(1) and adding (c)(2); and

by revising paragraph (e)(3) to read as follows:

31.205-47 Costs related to legal and other proceedings.

* * * * *

(b) Costs incurred in connection with any proceeding brought by a

Federal, State, local, or foreign government for violation of, or a

failure to comply with, law or regulation by the contractor (including

its agents or employees), or costs incurred in connection with any

proceeding brought by a third party in the name of the United States

under the False Claims Act, 31 U.S.C. 3730, are unallowable if the

result is--

* * * * *

(c) * * *

(2) In the event of a settlement of any proceeding brought by a

third party under the False Claims Act in which the United States did

not intervene, reasonable costs incurred by the contractor in

connection with such a proceeding, that are not otherwise unallowable

by regulation or by separate agreement with the United States, may be

allowed if the contracting officer, in consultation with his or her

legal advisor, determines that there was very little likelihood that

the third party would have been successful on the merits.

* * * * *

(e) * * *

(3) The percentage of costs allowed does not exceed the percentage

determined to be appropriate considering the complexity of procurement

litigation, generally accepted principles governing the award of legal

fees in civil actions involving the United States as a party, and such

other factors as may be appropriate. Such percentage shall not exceed

80 percent. Agreements reached under paragraph (c) of this subsection

shall be subject to this limitation. If, however, an agreement

described in paragraph (c)(1) of this subsection explicitly states the

amount of otherwise allowable incurred legal fees and limits the

allowable recovery to 80 percent or less of the stated legal fees, no

additional limitation need be applied. The amount of reimbursement

allowed for legal costs in connection with any proceeding described in

paragraph (c)(2) of this subsection shall be determined by the

cognizant contracting officer, but shall not exceed 80 percent of

otherwise allowable legal costs incurred.

* * * * *

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 32 and 37

[FAC 97-09; FAR Case 97-302; Item VIII]

Federal Acquisition Regulation; Service Contracts

AGENCIES: Department of Defense (DoD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed on a final rule amending

the Federal Acquisition Regulation (FAR) to expand the authority of the

Department of Defense and the Coast Guard to enter into contracts that

cross fiscal years.

This regulatory action was not subject to Office of Management and

Budget review under Executive Order 12866, dated September 30, 1993,

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

EFFECTIVE DATE: December 29, 1998.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS

Building, Washington, DC 20405, (202) 501-4755, for information

pertaining to status or publication schedules. For clarification of

content, contact Mr. Jeremy F. Olson at (202) 501-0692. Please cite FAC

97-09, FAR case 97-302.

SUPPLEMENTARY INFORMATION:

A. Background

Section 801 of the National Defense Authorization Act for Fiscal

Year 1998 (Pub. L. 105-85) amends 10 U.S.C. 2410a to authorize the

Secretary of Defense, the Secretary of a military department, or the

Secretary of Transportation with regard to the Coast Guard when not

operating as a service in the Navy, to enter into a contract for

procurement of severable services for a period that begins in one

fiscal year and ends in the next fiscal year.

B. Regulatory Flexibility Act

The final rule does not constitute a significant FAR revision

within the meaning of FAR 1.501 and Public Law 98-577, and publication

for public comments is not required. However, comments from small

entities concerning the affected FAR subparts will be considered in

accordance with 5 U.S.C. 610. Such comments must be submitted

separately and should cite 5 U.S.C. 601, et seq. (FAC 97-09, FAR case

97-302), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 32 and 37

Government procurement.

Dated: October 22, 1998.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 32 and 37 are amended as set forth below:

1. The authority citation for 48 CFR Parts 32 and 37 continues to

read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

PART 32--CONTRACT FINANCING

2. Section 32.703-3 is revised to read as follows:

32.703-3 Contracts crossing fiscal years.

(a) A contract that is funded by annual appropriations may not

cross fiscal years, except in accordance with statutory authorization

(e.g., 41 U.S.C. 11a, 31 U.S.C. 1308, 42 U.S.C. 2459a, 42 U.S.C. 3515,

and paragraph (b) of this subsection), or when the contract calls for

an end product that cannot feasibly be subdivided for separate

performance in each fiscal year (e.g., contracts for expert or

consultant services).

(b) The head of an executive agency, except NASA, may enter into a

contract, exercise an option, or place an order under a contract for

severable services for a period that begins in one fiscal year and ends

in the next fiscal year if the period of the contract awarded, option

exercised, or order placed does not exceed one year (10 U.S.C. 2410a

and 41 U.S.C. 253l). Funds made available for a fiscal year may be

obligated for the total amount of an action entered into under this

authority.

PART 37--SERVICE CONTRACTING

3. Section 37.106 is amended by revising paragraph (b) to read as

follows:

37.106 Funding and term of service contracts.

* * * * *

(b) The head of an executive agency, except NASA, may enter into a

contract, exercise an option, or place an order under a contract for

severable services for a period that begins in one fiscal year and ends

in the next fiscal year if the period of the contract awarded, option

exercised, or order placed does not exceed one year (10 U.S.C. 2410a

and 41 U.S.C. 253l). Funds made available for a fiscal year may be

obligated for the total amount of an action entered into under this

authority.

* * * * *

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 32

[FAC 97-09; FAR Case 97-609; Item IX]

Federal Acquisition Regulation; Payment Due Dates

AGENCIES: Department of Defense (DoD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed on a final rule amending

the Federal Acquisition Regulation (FAR) to clarify that agencies may

authorize amendment of the FAR payment clauses to specify a period

shorter than 30 days for making contract invoice payments, provided

such period is not less than 7 days. This regulatory action was not

subject to Office of Management and Budget review under Executive Order

12866, dated September 30, 1993, and is not a major rule under 5 U.S.C.

804.

EFFECTIVE DATE: December 29, 1998.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, 1800 F

Street, NW, Washington, DC 20405, (202) 501-4755, for information

pertaining to status or publication schedules. For clarification of

content, contact Mr. Jeremy Olson at (202) 501-0692. Please cite FAC

97-09, FAR case 97-609.

SUPPLEMENTARY INFORMATION:

A. Background

This final rule amends FAR Subpart 32.9 to clarify that agencies

may amend the clauses at FAR 52.232-25, Prompt Payment, and 52.232-26,

Prompt Payment for Fixed-Price Architect-Engineer Contracts, to specify

a period shorter than 30 days (but not less than 7 days) for making

contract invoice payments.

B. Regulatory Flexibility Act

The final rule does not constitute a significant FAR revision

within the meaning of FAR 1.501 and Public Law 98-577, and publication

for public comments is not required. However, comments from small

entities concerning the affected FAR subpart will be considered in

accordance with 5 U.S.C. 610. Such comments must be submitted separately and should cite 5 U.S.C. 601, et seq. (FAC 97-09, FAR case 97-609), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 32:

Government procurement.

Dated: October 22, 1998.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Part 32 is amended as set forth below:

1. The authority citation for 48 CFR Part 32 continues to read as

follows:

PART 32--CONTRACT FINANCING

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

2. Section 32.905 is amended in paragraph (a) by revising the

introductory text to read as follows:

32.905 Invoice payments.

(a) General. Except as prescribed in paragraphs (b), (c), and (d)

of this section, or as authorized in 32.908(a)(3) or (c)(3), the due

date for making an invoice payment by the designated payment office

shall be as follows:

* * * * *

3. Section 32.908 is amended by adding paragraphs (a)(3) and (c)(3)

to read as follows:

32.908 Contract clauses.

(a) * * *

(3) As provided in 32.904, agency policies and procedures may

authorize amendment of paragraphs (a)(1)(i) and (iii) of the clause to

insert a period shorter than 30 days (but not less than 7 days) for

making contract invoice payments.

* * * * *

(c) * * *

(3) As provided in 32.904, agency policies and procedures may

authorize amendment of paragraph (a)(1)(i) of the clause to insert a

period shorter than 30 days (but not less than 7 days) for making

contract invoice payments.

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 6, 14, 15, 19, 32, 33, 36, 41, 52, and 53

[FAC 97-09; Item X]

Federal Acquisition Regulation; Technical Amendments

AGENCIES: Department of Defense (DoD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Technical amendments.

SUMMARY: This document makes amendments to the Federal Acquisition

Regulation in order to update references and make editorial changes.

EFFECTIVE DATE: October 30, 1998.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GSA

Building, Washington, DC 20405, (202) 501-4755.

List of Subjects in 48 CFR Parts 1, 6, 14, 15, 19, 32, 33, 36, 41,

52, and 53

Government procurement.

Dated: October 22, 1998.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 1, 6, 14, 15, 19, 32, 33, 36, 41, 52, and

53 are amended as set forth below:

1. The authority citation for 48 CFR Parts 1, 6, 14, 15, 19, 32,

33, 36, 41, 52, and 53 continues to read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM

2. The table in section 1.106 is amended by revising entries

``41.004.2(c)'' to read ``41.202(c)''; ``52.241-2'' to read ``52.241-

3''; ``52.241-6'' to read ``52.241-7''; and ``52.241-11'' to read

``52.241-1''; removing the FAR segment and the corresponding OMB

Control Number entries for 52.211-5, 52.253-1, and 53.105; and adding

entries, in numerical order, to read as follows:

1.106 OMB approval under the Paperwork Reduction Act.

* * * * *

FAR segment

OMB Control No.

52.227-14

9000-0090

52.227-15

9000-0090

52.227-16

9000-0090

52.227-17

9000-0090

52.227-18

9000-0090

52.227-19

9000-0090

52.227-20

9000-0090

52.227-21

9000-0090

52.227-22

9000-0090

52.227-23

9000-0090

* * * * *

PART 6--COMPETITION REQUIREMENTS

6.302-3 [Amended]

3. Section 6.302-3 is amended at the end of paragraph (a)(2)

introductory text by removing the colon and inserting a dash; and at

the beginning of paragraphs (a)(2)(i) and (a)(2)(ii), by removing

``to'' and inserting ``To''.

PART 14--SEALED BIDDING

14.407-4 [Amended]

5. Section 14.407-4 is amended in paragraph (a) by revising the

word ``amendment'' to read ``modification''.

PART 15--CONTRACTING BY NEGOTIATION

15.404-1 [Amended]

6. Section 15.404-1 is amended in the first sentence of paragraph

(a)(7) by removing the word ``Resource'' and adding ``Reference''.

PART 19--SMALL BUSINESS PROGRAMS

7. Section 19.102(f)(4) is amended by revising the third sentence

to read as follows:

19.102 Size standards.

* * * * *

(f)(4) * * * A listing is also available on SBA's Internet Homepage

at http://www.sba.gov/gc. * * *

* * * * *

19.1004 [Amended]

8. Section 19.1004 is amended by revising the term ``Defense

Mapping Agency'' to read ``National Imagery and Mapping Agency''.

PART 32--CONTRACT FINANCING

9. Section 32.705-1 is amended by revising paragraph (b) to read as

follows:

32.705-1 Clauses for contracting in advance of funds.

* * * * *

(b) The contracting officer shall insert the clause at 52.232-19,

Availability of Funds for the Next Fiscal Year, in solicitations and

contracts if a one-year indefinite-quantity or requirements contract

for services is contemplated and the contract--

(1) Is funded by annual appropriations; and

(2) Is to extend beyond the initial fiscal year (see 32.703-2(b)).

PART 33--PROTESTS, DISPUTES, AND APPEALS

33.104 [Amended]

10. Section 33.104 is amended in the last sentence of paragraph (e)

by revising ``7 days'' to read ``5 days''.

PART 36--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

36.601-4 [Amended]

8. Section 36.601-4 is amended in the fourth sentence of paragraph

(a)(4) by revising the term ``Defense Mapping Agency'' to read

``National Imagery and Mapping Agency''.

PART 41--ACQUISITION OF UTILITY SERVICES

41.103 [Amended]

11. Section 41.103 is amended in paragraph (a)(2) by revising ``40

U.S.C. 474(3)'' to read ``40 U.S.C. 474(d)(3)''; and in the first

sentence of paragraph (a)(3) by revising ``(42 U.S.C. 2751, et seq.)''

to read ``(42 U.S.C. 7251, et seq.)''.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

12. Section 52.212-5 is amended by revising the clause heading and

paragraph (b)(3) to read 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 (Oct. 1998)

* * * * *

(b) * * *

____(3) 52.219-8, Utilization of Small, Small Disadvantaged and

Women-Owned Small Business Concerns (15 U.S.C. 637(d)(2) and (3)).

* * * * *

52.244-6 [Amended]

13. Section 52.244-6 is amended by revising the date of the clause

to read ``(Oct 1998)''; and in paragraph (c)(3) of the clause by

removing the words ``Handicapped Workers'' and adding ``Workers with

Disabilities''.

PART 53--FORMS

14. Section 53.228 is amended by revising paragraphs (h) and (i) to

read as follows:

53.228 Bonds and insurance.

* * * * *

(h) SF 273 (Rev. 10/98) Reinsurance Agreement for a Miller Act

Performance Bond. (See 28.106-1(h) and 28.202-1(a)(4).) SF 273 is

authorized for local reproduction and a copy is furnished for this

purpose in Part 53 of the looseleaf edition of the FAR.

(i) SF 274 (Rev. 10/98) Reinsurance Agreement for a Miller Act

Payment Bond. (See 28.106-1(i) and 28.202-1(a)(4).) SF 274 is

authorized for local reproduction and a copy is furnished for this

purpose in Part 53 of the looseleaf edition of the FAR.

* * * * *

15. Section 53.301-273 is revised to read as follows:

53.301-273 Reinsurance Agreement for a Miller Act Performance Bond.

16. Section 53.301-274 is revised to read as follows:

53.301-274 Reinsurance Agreement for a Miller Act Payment Bond.