76340 Federal Register / Vol. 69, No. 243 / Monday, December 20, 2004 / Rules and Regulations 

DEPARTMENT OF DEFENSE

GENERAL SERVICES 

ADMINISTRATION

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION

48 CFR Chapter 1

Federal Acquisition Circular 2001–26; 

Introduction

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA).

ACTION: Summary presentation of final 

rules and a technical amendment.

SUMMARY: This document summarizes 

the Federal Acquisition Regulation 

(FAR) rules agreed to by the Civilian 

Agency Acquisition Council and the 

Defense Acquisition Regulations 

Council in this Federal Acquisition 

Circular (FAC) 2001–26. A companion 

document, the Small Entity Compliance 

Guide (SECG), follows this FAC. The 

FAC, including the SECG, is available 

via the Internet at http://

www.acqnet.gov/far.

DATES: For effective dates and comment 

dates, see separate documents which 

follow.

FOR FURTHER INFORMATION CONTACT: The 

FAR Secretariat, at (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 2001–26 and 

specific FAR case number(s). Interested 

parties may also visit our website at 

http://www.acqnet.gov/far.

Item Subject FAR case Analyst 

I ............ Electronic Representations and Certifications .................................................................................... 2002–024 Zaffos.

II ........... Excluded Parties List System Enhancement ...................................................................................... 2002–023 Goral.

III .......... Special Emergency Procurement Authority ........................................................................................ 2003–022 Zaffos.

IV .......... Notification of Employee Rights Concerning Payment of Union Dues or Fees (Interim) ................... 2004–010 Goral.

V ........... Mentor Prote ́ge ́ Program—Delegation of Approval Authority for Mentor Prote ́ge ́ Agreements ......... 2003–010 Cundiff.

VI .......... Applicability of the Cost Principles and Penalties for Unallowable Costs .......................................... 2001–018 Loeb.

VII ......... 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.

FAC 2001–26 amends the FAR as 

specified below:

Item I—Electronic Representations and 

Certifications (FAR Case 2002–024) 

This final rule requires offerors to 

provide representations and 

certifications electronically via the BPN 

website; to update the representations 

and certifications as necessary, but at 

least annually, to keep them current, 

accurate and complete; and to make 

changes that affect only one solicitation 

by completing the appropriate sections 

of either paragraph (j) of FAR provision 

52.212–3 or FAR provision 52.204–8, 

whichever is included in the 

solicitation. This change represents a 

conversion of a paper-based process to 

a more efficient electronic process to 

obtain offerors’ representations and 

certifications. It will also significantly 

reduce the paperwork burden for both 

offerors and contracting officers.

Item II—Excluded Parties List System 

Enhancement (FAR Case 2002–023)

This final rule amends the FAR to 

incorporate the Excluded Parties List 

System (EPLS), GSA’s new searchable 

on-line electronic list of parties 

excluded from doing business with the 

Federal Government. The EPLS enables 

agencies to directly input data into this 

system and obviates the need for the 

hard copy List of Parties Excluded from 

Federal Procurement and 

Nonprocurement Programs. The EPLS 

will provide more up-to-date and 

readily accessible information to the 

contracting officer on parties excluded 

from doing business with the Federal 

Government.

Item III—Special Emergency 

Procurement Authority (FAR Case 

2003–022)

This rule finalizes the interim rule 

2003–022 by including under FAR 

subpart 13.5 the acquisition of supplies 

and services that meet the definition of 

a commercial item in FAR 2.101, and 

which, as determined by the head of the 

agency, are to be used to support a 

contingency operation. This final rule 

implements Section 1443 of the Services 

Acquisition Reform Act of 2003 (41 

U.S.C. 428a) and also incorporates the 

higher thresholds authorized by Section 

822 of the Ronald W. Reagan National 

Defense Authorization Act for Fiscal 

Year 2005. This rule allows the 

contracting officer expanded use of 

Simplified Acquisition and Commercial 

Items procedures when acquiring 

supplies or services that, as determined 

by the head of the agency, are to be used 

in support of a contingency operation or 

to facilitate the defense against or the 

recovery from nuclear, biological, 

chemical or radiological attack.

Item IV—Notification of Employee 

Rights Concerning Payment of Union 

Dues or Fees (FAR Case 2004–010) 

(Interim)

This interim rule amends FAR Parts 2, 

22, and 52 to implement Executive 

Order (E.O.) 13201, Notification of 

Employee Rights Concerning Payment 

of Union Dues or Fees, and Department 

of Labor regulations at 29 CFR part 470. 

The rule requires Government 

contractors and subcontractors to post 

notices informing their employees that 

under Federal law they cannot be 

required to join a union or maintain 

membership in a union to retain their 

jobs. The required notice also advises 

employees who are not union members 

that they can object to the use of their 

union dues for certain purposes. This 

rule applies to Federal contractors and 

subcontractors with contracts or 

subcontracts that exceed the simplified 

acquisition threshold, unless covered by 

an exemption granted by the Secretary 

of Labor.

Item V—Mentor Prote ́ge ́ Program—

Delegation of Approval Authority for 

Mentor Prote ́ge ́ Agreements (FAR Case 

2003–010) 

This final rule amends FAR 19.702, 

Statutory Requirements, to change the 

approval authority of the Mentor 

Prote ́ge ́ Agreements to the DoD Military 

Departments or Defense Agencies and to 

make some minor changes for 

clarification. This change is being made 

in order for DoD to streamline and 

Federal Register / Vol. 69, No. 243 / Monday, December 20, 2004 / Rules and Regulations 76341

transform itself to more effectively 

achieve its mission.

Item VI—Applicability of the Cost 

Principles and Penalties for 

Unallowable Costs (FAR Case 2001–

018)

This final rule increases the threshold 

at FAR 42.709(b) and FAR 42.709–6 

from $500,000 to $550,000 for contracts 

subject to penalties if a contractor 

includes expressly unallowable costs in 

a claim for reimbursement. The 

threshold was increased to reflect 

inflation and is authorized by 10 U.S.C. 

2324(l) and 41 U.S.C. 256(l).

The rule is of importance to 

contracting officers and contractors who 

negotiate contracts and modifications, 

and determine costs in accordance with 

FAR Part 31 contract cost principles.

Item VII—Technical Amendments

Editorial changes are made at FAR 

11.201(d)(2)(i), 41.301(a), 44.203(b)(1), 

51.102(c)(1), and in the introductory 

text of FAR provision 52.219–1 in order 

to update references.

Dated: December 9, 2004. 

Laura Auletta, 

Director, Contract Policy Division.

Federal Acquisition Circular

Federal Acquisition Circular (FAC) 

2001-26 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 2001-26 is effective December 

20, 2004, except for Item I, which is 

effective January 1, 2005, and Items II, 

III, V, and VI, which are effective 

January 19, 2005.

Dated: December 6, 2004. 

Deidre A. Lee, 

Director, Defense Procurement and 

Acquisition Policy.

Dated: December 8, 2004. 

David A. Drabkin, 

Senior Procurement Executive, Office of the 

Chief Acquisition Officer, General Services 

Administration.

Dated: December 2, 2004. 

Tom Luedtke, 

Deputy Chief Acquisition Officer, National 

Aeronautics and Space Administration.

[FR Doc. 04–27632 Filed 12–17–04; 8:45 am]

BILLING CODE 6820–EP–S

DEPARTMENT OF DEFENSE

GENERAL SERVICES 

ADMINISTRATION

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION

48 CFR Parts 2, 4, 14, 15, and 52

[FAC 2001–26; FAR Case 2002–024; Item 

I]

RIN 9000–AJ80

Federal Acquisition Regulation; 

Electronic Representations and 

Certifications

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 

(Councils) have agreed on a final rule 

amending the Federal Acquisition 

Regulation (FAR) to require offerors to 

submit representations and 

certifications electronically via the 

Business Partner Network (BPN), unless 

certain exceptions apply.

DATES: Effective Date: January 1, 2005.

FOR FURTHER INFORMATION CONTACT: The 

FAR Secretariat at (202) 501–4755 for 

information pertaining to status or 

publication schedules. For clarification 

of content, contact Mr. Gerald Zaffos, 

Procurement Analyst, at (202) 501–

6091. Please cite FAC 2001–26, FAR 

case 2002–024.

SUPPLEMENTARY INFORMATION:

A. Background

DoD, GSA, and NASA published a 

proposed rule in the Federal Register at 

69 FR 4012, January 27, 2004. The 60–

day comment period for the proposed 

rule ended March 29, 2004. Forty-five 

comments were received. Some of the 

comments merely agreed with the 

concept of ORCA; others pointed out 

typographical errors. The substantive 

comments are discussed below.

1. Comment: Should a contracting 

officer check for paper reps and certs 

and, failing to find them, check for 

electronic ones? Or, should a 

contracting officer only check for 

electronic ones if the offeror falls within 

a particular class of small business?

Council’s response: The inclusion of 

the FAR provisions at 52.204–8 or 

52.212–3(j) (as described in the final 

rule) in a solicitation would alert both 

the vendor and the contracting officer 

that the electronic completion of 

representations and certifications on the 

Online Representations and 

Certifications Application (ORCA) 

module is required for the specific 

contracting action.

2. Comment: Without reps and certs, 

how would a Contracting Officer know 

what class of small business an offeror 

is?

Council’s response: ORCA includes 

the socio-economic representations and 

certifications (such as FAR 52.219–1, 

Small Business Program 

Representations.) A vendor would 

revise its responses in either FAR 

52.204–8 or 52.212–3(j) (as described in 

the final rule) if its responses in ORCA 

is incorrect for the present solicitation.

3. Comment: The possibility of 

parallel paper and electronic systems 

offers myriad chances for error. What if 

paper and electronic versions differ? 

What if an offeror from the class of 

small businesses not required to build 

an electronic record chooses to build an 

electronic record? What if someone 

required to build an electronic record 

submits paper reps and certs instead?

Council’s response: The provisions at 

FAR 52.204–8 and 52.212–3(j) make it 

clear that vendors are required to 

complete the representations and 

certifications in ORCA. Those 

certifications and representations would 

take precedence over any other 

representations and certifications 

received (for the same provisions 

included in ORCA) for the specific 

contract action unless the offeror 

indicates he is amending those answers 

in accordance with the referenced 

provisions.

4. Comment: Since contractors are 

currently using the CCR database, the 

EEO database, PRO-Net, and EPLS 

(consolidated under ‘‘BPN.com’’), will 

there be a future consideration for a 

contractor to have access and use the 

contractor’s reps and certs rather than 

have the contractor continuing to 

request a new reps and certs package for 

the same sources that are on the ‘‘BPN’’

reps and certs database?

Council’s response: Vendors will have 

access to ORCA. Please also note that 

the PRO-Net system has been retired, 

with its key capabilities being 

incorporated into CCR.

5. Comment: An additional 

clarification at FAR 12.301 is needed for 

oral solicitations. FAR 13.106–1(c) 

states the contracting officer shall solicit 

quotations orally to the maximum 

extent practicable. FAR 5.101(a)(2)(ii) 

exempts contracting officers from 

posting $10K-$25K requirements if oral 

solicitations are used. Otherwise, the 

requirement has to be posted for 10 

days - a millennium in the customer’s