44808 Federal Register / Vol. 62, No. 163 / Friday, August 22, 1997 / Rules and Regulations

(a) The clause date and paragraphs (a),

(b), (c) introductory text, (c)(2)

introductory text, (c)(2)(ii)(B), and (d);

(b) Following paragraph (e) in the

‘‘Irrevocable Letter of Credit’’,

paragraphs 1, 2, 4, and 6; and

(c) Following paragraph (f) in the ILC

confirmation, paragraphs 3, 4(a), and 6.

The revised sections read as follows:

52.228–14 Irrevocable Letter of Credit.

* * * * *

Irrevocable Letter of Credit (Oct 1997)

(a) ‘‘Irrevocable letter of credit’’ (ILC), as

used in this clause, means a written

commitment by a federally insured financial

institution to pay all or part of a stated

amount of money, until the expiration date

of the letter, upon presentation by the

Government (the beneficiary) of a written

demand therefor. Neither the financial

institution nor the offeror/Contractor can

revoke or condition the letter of credit.

(b) If the offeror intends to use an ILC in

lieu of a bid bond, or to secure other types

of bonds such as performance and payment

bonds, the letter of credit and letter of

confirmation formats in paragraphs (e) and (f)

of this clause shall be used.

(c) The letter of credit shall be irrevocable,

shall require presentation of no document

other than a written demand and the ILC

(including confirming letter, if any), shall be

issued/confirmed by an acceptable federally

insured financial institution as provided in

paragraph (d) of this clause, and—

* * * * *

(2) If used as an alternative to corporate or

individual sureties as security for a

performance or payment bond, the offeror/

Contractor may submit an ILC with an initial

expiration date estimated to cover the entire

period for which financial security is

required or may submit an ILC with an initial

expiration date that is a minimum period of

one year from the date of issuance. The ILC

shall provide that, unless the issuer provides

the beneficiary written notice of non-renewal

at least 60 days in advance of the current

expiration date, the ILC is automatically

extended without amendment for one year

from the expiration date, or any future

expiration date, until the period of required

coverage is completed and the Contracting

Officer provides the financial institution with

a written statement waiving the right to

payment. The period of required coverage

shall be:

* * * * *

(ii) * * *

(B) For performance bonds only, until

completion of any warranty period.

(d) Only federally insured financial

institutions rated investment grade or higher

shall issue or confirm the ILC. The offeror/

Contractor shall provide the Contracting

Officer a credit rating that indicates the

financial institution has the required rating(s)

as of the date of issuance of the ILC. Unless

the financial institution issuing the ILC had

letter of credit business of at least $25 million

in the past year, ILCs over $5 million must

be confirmed by another acceptable financial

institution that had letter of credit business

of at least $25 million in the past year.

(e) * * *

1. We hereby establish this irrevocable and

transferable Letter of Credit in your favor for

one or more drawings up to United States

$llll. This Letter of Credit is payable at

[issuing financial institution’s and, if any,

confirming financial institution’s] office at

[issuing financial institution’s address and, if

any, confirming financial institution’s

address] and expires with our close of

business on llll, or any automatically

extended expiration date.

2. We hereby undertake to honor your or

the transferee’s sight draft(s) drawn on the

issuing or, if any, the confirming financial

institution, for all or any part of this credit

if presented with this Letter of Credit and

confirmation, if any, at the office specified in

paragraph 1 of this Letter of Credit on or

before the expiration date or any

automatically extended expiration date.

* * * * *

4. This Letter of Credit is transferable.

Transfers and assignments of proceeds are to

be effected without charge to either the

beneficiary or the transferee/assignee of

proceeds. Such transfer or assignment shall

be only at the written direction of the

Government (the beneficiary) in a form

satisfactory to the issuing financial

institution and the confirming financial

institution, if any.

* * * * *

6. If this credit expires during an

interruption of business of this financial

institution as described in Article 17 of the

UCP, the financial institution specifically

agrees to effect payment if this credit is

drawn against within 30 days after the

resumption of our business.

(f) * * *

3. We hereby undertake to honor sight

draft(s) drawn under and presented with the

Letter of Credit and this Confirmation at our

offices as specified herein.

4. * * *

(a) At least 60 days prior to any such

expiration date, we shall notify the

Contracting Officer, or the transferee and the

issuing financial institution, by registered

mail or other receipted means of delivery,

that we elect not to consider this

confirmation extended for any such

additional period; or

* * * * *

6. If this confirmation expires during an

interruption of business of this financial

institution as described in Article 17 of the

UCP, we specifically agree to effect payment

if this credit is drawn against within 30 days

after the resumption of our business.

* * * * *

(End of clause)

[FR Doc. 97–21488 Filed 8–21–97; 8:45 am]

BILLING CODE 6820–EP–P

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 1 and 31

[FAC 97–01; FAR Case 96–010; Item IV]

RIN 9000–AH41

Federal Acquisition Regulation;

Automatic Data Processing Equipment

Leasing Costs

AGENCIES: Department of Defense (DoD),

General Services Administration (GSA),

and National Aeronautics and Space

Administration (NASA).

ACTION: Interim rule adopted as final.

SUMMARY: The Civilian Agency

Acquisition Council and the Defense

Acquisition Regulations Council have

agreed to convert the interim rule

published as Item I of Federal

Acquisition Circular 90–44 on

December 31, 1996, to a final rule

without change. The rule amends the

Federal Acquisition Regulation (FAR) to

remove the cost principle on automatic

data processing equipment (ADPE)

leasing costs. 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.

DATES: Effective October 21, 1997.

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, Procurement Analyst, at

(202) 501–3221. Please cite FAC 97–01,

FAR case 96–010.

SUPPLEMENTARY INFORMATION:

A. Background

An interim rule was published on

December 31, 1996 (61 FR 69287). The

interim rule deleted the ADPE

definition at FAR 31.001, the cost

principle at FAR 31.205–2, Automatic

data processing equipment leasing costs,

and references to the term ADPE found

elsewhere in FAR Part 31. The interim

rule is converted to a final rule without

change.

Public comments were received from

one source. The comments were

considered in developing the final rule.

B. Regulatory Flexibility Act

The Department of Defense, the

General Services Administration, and
Federal Register / Vol. 62, No. 163 / Friday, August 22, 1997 / Rules and Regulations 44809

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. The interim rule

deleted a reporting and recordkeeping

requirement at FAR 31.205–2 under

OMB Control Number 9000–0072.

List of Subjects in 48 CFR Parts 1 and

31

Government procurement.

Interim Rule Adopted as Final Without

Change

Accordingly, the interim rule

amending 48 CFR Parts 1 and 31 which

was published at 61 FR 69287,

December 31, 1996, is adopted as a final

rule without change.

Authority: 40 U.S.C. 486(c); 10 U.S.C.

chapter 137; and 42 U.S.C. 2473(c).

Dated: August 7, 1997

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

[FR Doc. 97–21489 Filed 8–21–97; 8:45 am]

BILLING CODE 6820–EP–P

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 1, 10, 11, 13, 15, 23, 36,

42, and 52

[FAC 97–01; FAR Case 92–054A; Item V]

RIN 9000–AG40

Federal Acquisition Regulation;

Environmentally Sound Products

AGENCIES: Department of Defense (DoD),

General Services Administration (GSA),

and National Aeronautics and Space

Administration (NASA).

ACTION: Interim rule adopted as final

with changes.

SUMMARY: The Civilian Agency

Acquisition Council and the Defense

Acquisition Regulations Council have

agreed to adopt as final, with changes,

the interim rule published as Item II of

Federal Acquisition Circular 90–27 on

May 31, 1995. The rule amends the

Federal Acquisition Regulation (FAR) to

incorporate policies for the acquisition

of environmentally preferable and

energy-efficient products and services.

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.

DATE: Effective October 21, 1997.

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.

Ralph De Stefano, Procurement Analyst,

at (202) 501–1758. Please cite FAC 97–

01, FAR case 92–054A.

SUPPLEMENTARY INFORMATION:

A. Background

An interim rule was published in the

Federal Register at 60 FR 28494, May

31, 1995. Ninety comments were

received from 18 respondents.

The Councils’ analysis of those

comments resulted in revisions to the

rule to: revise the definitions of ‘‘new’’

and ‘‘reconditioned’’ at 11.001 and in

the clause at 52.211–5; delete the

definitions of ‘‘material’’ and ‘‘other

than new’’ at 11.001 and in the clause

at 52.211–5; add Executive Order No.

12909 of March 8, 1994, to the list of

statutory authorities at 11.002; clarify

the policy on acceptability of used,

reconditioned, or remanufactured

supplies, and former Government

surplus property proposed for use under

a contract; delete the definition of

‘‘source reduction’’ at 15.601; delete all

requirements related to ‘‘agency

designated items’’ in Subpart 23.4; add

a definition of ‘‘pollution prevention’’ at

23.703; streamline the clauses at

52.211–5 through 52.211–7 by

combining their requirements into the

clause at 52.211–5; eliminate the

solicitation provision at 52.223–8; and

streamline the clause at 52.223–9.

B. Regulatory Flexibility Act

A Final Regulatory Flexibility

Analysis (FRFA) has been performed. A

copy of the FRFA may be obtained from

the FAR Secretariat. The FRFA is

summarized as follows:

This action is being taken to implement the

Resource Conservation and Recovery Act

(RCRA) (42 U.S.C. 6901, et seq.), as amended;

Executive Order 12873, Federal Acquisition,

Recycling, and Waste Prevention; Executive

Order 12902, Energy Efficiency and Water

Conservation at Federal Facilities; and Office

of Federal Procurement Policy (OFPP) Policy

Letter 92–4, Procurement of

Environmentally-Sound and Energy-Efficient

Products and Services.

The objective of this rule is to amend the

FAR to clearly reflect the Government’s

preference for the acquisition of

environmentally-sound and energy-efficient

products and services and to establish an

affirmative procurement program favoring

items containing the maximum practicable

content of recovered materials. The rule also

implements policies for procurement of items

for which the Environmental Protection

Agency (EPA) has designated minimum

recovered material content.

We received no public comments which

specifically addressed the Initial Regulatory

Flexibility Analysis.

The final rule’s policies regarding

acceptable new and used materials apply to

all small and large entities that perform or

propose to perform Government contracts.

No statistics are maintained on the number

of offerors that propose used, reconditioned,

or remanufactured materials for use under

Government contracts.

The requirements for minimum recovered

material content for EPA-designated items

apply to all entities that supply such items,

with a value exceeding $10,000 per year, to

the Government. However, the final rule

exempts procurements under the simplified

acquisition threshold of $100,000 from

recovered material content reporting

requirements. Based on Fiscal Year 1995

Governmentwide procurement statistics for

Federal Supply/Service Codes which

comprise EPA-designated items, we estimate

that the Federal Government receives

approximately 20,875 covered proposals per

year from small entities, and awards

approximately 2,280 covered contracts per

year to small entities.

Several reporting requirements were

streamlined or eliminated in this final rule.

Certifications of recovered material content

are now required only in response to

solicitations which are for, or which specify

the use of, EPA-designated items. Such

certifications are no longer required on an

annual basis and are required only under

contracts which exceed the simplified

acquisition threshold.

Reporting requirements related to agencydesignated items have been eliminated.

We considered elimination of the

requirement that an offeror notify the

contracting officer when the offeror proposes

the use of used, remanufactured, or

reconditioned supplies. However, we

determined that use of such supplies under

many contracts might be unacceptable. The

notification requirement will allow

contracting officers to continue to decide on

a case-by-case basis whether to permit use of

such supplies.