[Federal Register Volume 76, Number 51 (Wednesday, March 16, 2011)]
[Rules and Regulations]
[Pages 14572-14574]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-5562]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1

[Docket FAR 2011-0077, Sequence 2]


Federal Acquisition Regulation; Federal Acquisition Circular 
2005-50; Small Entity Compliance Guide

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

ACTION: Small Entity Compliance Guide.

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SUMMARY: This document is issued under the joint authority of DoD, GSA, 
and NASA. This Small Entity Compliance Guide has been prepared in 
accordance with section 212 of the Small Business Regulatory 
Enforcement Fairness Act of 1996. It consists of a summary of rules 
appearing in Federal Acquisition Circular (FAC) 2005-50, which amend 
the Federal Acquisition Regulation (FAR). An asterisk (*) next to a 
rule indicates that a regulatory flexibility analysis has been 
prepared. Interested parties may obtain further information regarding 
these rules by referring to FAC 2005-50, which precedes this document. 
These documents are also available via the Internet at http://www.regulations.gov.

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

FOR FURTHER INFORMATION CONTACT: The analyst whose name appears in the 
table below. Please cite FAC 2005-50 and the specific FAR case number. 
For

[[Page 14573]]

information pertaining to status or publication schedules, contact the 
Regulatory Secretariat at (202) 501-4755.

                      List of Rules in FAC 2005-50
------------------------------------------------------------------------
      Item               Subject           FAR case         Analyst
------------------------------------------------------------------------
I..............  Proper Use and             2008-030  Sakalos.
                  Management of Cost-
                  Reimbursement
                  Contracts (Interim).
II.............  Requirements for           2007-012  Clark.
                  Acquisitions Pursuant
                  to Multiple-Award
                  Contracts (Interim).
III............  Justification and          2009-038  Robinson.
                  Approval of Sole-
                  Source 8(a) Contracts
                  (Interim).
IV.............  Additional                 2008-007  Sakalos.
                  Requirements for
                  Market Research.
* V............  Socioeconomic Program      2011-004  Morgan.
                  Parity (Interim).
VI.............  Use of Commercial          2008-034  Chambers.
                  Services Item
                  Authority.
VII............  Trade Agreements           2009-040  Davis.
                  Thresholds.
VIII...........  Disclosure and             2009-025  Chambers.
                  Consistency of Cost
                  Accounting Practices
                  for Contracts Awarded
                  to Foreign Concerns.
IX.............  Compensation for           2009-026  Chambers
                  Personal Services.
X..............  Technical Amendments..
------------------------------------------------------------------------


SUPPLEMENTARY INFORMATION: Summaries for each FAR rule follow. For the 
actual revisions and/or amendments made by these FAR cases, refer to 
the specific item numbers and subject set forth in the documents 
following these item summaries. FAC 2005-50 amends the FAR as specified 
below:

Item I--Proper Use and Management of Cost-Reimbursement Contracts (FAR 
Case 2008-030) (Interim)

    This interim rule amends the FAR to implement section 864 of the 
Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 
(Pub. L. 110-417). This law aligns with the goal of the Presidential 
Memorandum on Government Contracting, issued on March 4, 2009, which is 
to reduce waste, fraud, and abuse in Government contracting. This rule 
provides internal regulatory guidance on the proper use and management 
of all contracts, specifically cost-reimbursement contracts. The rule 
identifies (1) circumstances when cost-reimbursement contracts are 
appropriate; (2) acquisition plan findings required to support the 
contract type selection; and (3) the acquisition resources necessary to 
award and manage a cost-reimbursement contract.

Item II--Requirements for Acquisitions Pursuant to Multiple-Award 
Contracts (FAR Case 2007-012) (Interim)

    This interim rule amends the FAR to implement section 863 of the 
Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 
(Pub. L. 110-417). Section 863 mandates enhanced competition for orders 
placed under multiple-award contracts, including GSA's Federal Supply 
Schedules. If an order over the simplified acquisition threshold does 
not follow the section 863 competitive procedures, section 863 requires 
that a notice and the determination of an exception be published in 
FedBizOpps within 14 days after award.
    The interim rule relocates all procedures for establishing a 
Blanket Purchase Agreement (BPA) or placing an order under a BPA in one 
subsection, FAR 8.405-3. New BPAs must be established in accordance 
with the new competition standard. Orders over the simplified 
acquisition threshold against a new multiple-award BPA must meet the 
new competition standards; use is discretionary for existing multiple-
award BPAs.
    For orders under FAR part 16 task- and delivery-order contracts, 
orders over the simplified acquisition threshold must meet the new 
competition procedures; each contract holder must receive notice of the 
intent to make a purchase.

Item III--Justification and Approval of Sole-Source 8(a) Contracts 
(2009-038) (Interim)

    This interim rule amends the FAR to implement section 811 of the 
National Defense Authorization Act for Fiscal Year 2010 (Pub. L. 111-
84). Section 811 prohibits the award of a sole-source contract in an 
amount over $20 million under the 8(a) program authority (15 U.S.C. 
637(a)) without first obtaining a written Justification and Approval 
(J&A) approved by an appropriate official and making public the J&A and 
related information. This is a new internal Government requirement for 
the development and approval of a sole-source J&A for 8(a) sole-source 
awards over $20 million. It neither prohibits such awards nor increases 
the qualifications required of 8(a) firms. No automated systems are 
impacted.

Item IV--Additional Requirements for Market Research (FAR Case 2008-
007)

    This final rule adopts, with changes, the interim rule that amended 
the FAR to implement section 826 of the National Defense Authorization 
Act for Fiscal Year 2008 (Pub. L. 110-181). Section 826, entitled 
``Market Research,'' established new requirements for agencies subject 
to Title 10, United States Code. As a matter of policy, this provision 
of law was applied to contracts awarded by all executive agencies. The 
rule requires that market research must be conducted before an agency 
places a task or delivery order in excess of the simplified acquisition 
threshold under an indefinite-delivery indefinite-quantity contract. In 
addition, a prime contractor with a contract in excess of $5 million 
for the procurement of items other than commercial items is required to 
conduct market research before making purchases that exceed the 
simplified acquisition threshold. Among other changes, the final rule 
also deletes the language added to FAR 52.244-6 (Alternate I) and 
relocates it to a new FAR clause 52.210-1, Market Research.

Item V--Socioeconomic Program Parity (FAR Case 2011-004) (Interim)

    This interim rule amends the FAR to implement section 1347 of the 
``Small Business Jobs Act of 2010'' (Pub. L. 111-240) and the Small 
Business Administration regulations governing specific contracting and 
business assistance programs. Section 1347 changed the word ``shall'' 
to ``may'' at section 31(b)(2)(B) of the Small Business Act (15 U.S.C. 
657a(b)(2)(B)), thereby permitting a contracting officer to use 
discretion when determining whether an acquisition will be restricted 
to a small business participating in the 8(a) Business Development 
Program, the Historically Underutilized Business Zone Program, or the 
Service-Disabled Veteran-Owned Small Business Program.

[[Page 14574]]

Item VI--Use of Commercial Services Item Authority (FAR Case 2008-034)

    This final rule adopts, without change, an interim rule that 
implemented section 868 of the Duncan Hunter National Defense 
Authorization Act for Fiscal Year 2009 (Pub. L. 110-417). Section 868 
provides that the FAR shall be amended with respect to the procurement 
of commercial services that are not offered and sold competitively in 
substantial quantities in the commercial marketplace, but are of a type 
offered and sold competitively in substantial quantities in the 
commercial marketplace. Such services may be considered commercial 
items only if the contracting officer has determined in writing that 
the offeror has submitted sufficient information to evaluate, through 
price analysis, the reasonableness of the price for these services.
    The rule details the information the contracting officer may 
consider in order to make this determination. The rule further details, 
when this determination cannot be made, the information which may be 
requested to determine price reasonableness.

Item VII--Trade Agreements Thresholds (FAR Case 2009-040)

    This final rule adopts, without change, an interim rule that 
amended the FAR to adjust the thresholds for application of the World 
Trade Organization Government Procurement Agreement and the Free Trade 
Agreements as determined by the United States Trade Representative, 
according to a pre-determined formula under the agreements.

Item VIII--Disclosure and Consistency of Cost Accounting Practices for 
Contracts Awarded to Foreign Concerns (FAR Case 2009-025)

    This final rule adopts, without change, the interim rule that 
amended the FAR to revise FAR 30.201-4(c), 30.201-4(d)(1), 52.230-4, 
and 52.230-6 to maintain consistency between FAR and Cost Accounting 
Standards (CAS) regarding the administration of the Cost Accounting 
Standard Board's (CASB) rules, regulations and standards. This revision 
was necessitated by the CASB publishing a final rule in the Federal 
Register on March 26, 2008 (73 FR 15939) which implemented the revised 
clause, Disclosure and Consistency of Cost Accounting Practices--
Foreign Concerns, in CAS-covered contracts and subcontracts awarded to 
foreign concerns.

Item IX--Compensation for Personal Services (FAR Case 2009-026)

    This final rule adopts, without change, the interim rule that 
amended the FAR to align the existing FAR 31.205-6(q)(2)(i) through 
(vi) with the changes made in Cost Accounting Standards (CAS) Board 
standards 412 ``Cost Accounting Standard for composition and 
measurement of pension cost,'' and 415 ``Accounting for the cost of 
deferred compensation.'' Formerly, the applicable CAS standard for 
measuring, assigning, and allocating the costs of Employee Stock 
Ownership Plans (ESOPs) depended on whether the ESOP met the definition 
of a pension plan at FAR 31.001. Costs for ESOPs meeting the definition 
of a pension plan at FAR 31.001 were covered by CAS 412, while the 
costs for ESOPs not meeting the definition of a pension plan at FAR 
31.001 were covered by CAS 415. Now, regardless of whether an ESOP 
meets the definitions of a pension plan at FAR 31.001, all costs of 
ESOPs are covered by CAS 415.

Item X--Technical Amendments

    Editorial changes are made at FAR 19.201, 52.212-3, and 52.212-5.

    Dated: March 4, 2011.
Millisa Gary,
Acting Director, Office of Governmentwide Acquisition Policy.
[FR Doc. 2011-5562 Filed 3-15-11; 8:45 am]
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