Federal Register / Vol. 62, No. 163 / Friday, August 22, 1997 / Rules and Regulations 44831

contracts without requiring

consideration to incorporate changes

authorized by the Acts. 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.

Ralph De Stefano, Procurement Analyst,

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

01, FAR case 96–606.

SUPPLEMENTARY INFORMATION:

A. Background

Subsection 10002(e) of the Federal

Acquisition Streamlining Act of 1994

(Public Law 103–355) (FASA) and

subsection 4402(d) of the Clinger-Cohen

Act of 1996 (Public Law 104–106)

(Clinger-Cohen) allow regulations

implementing the Acts to provide for

modification of an existing contract

without consideration upon the request

of the contractor. Subsection 10002(e) of

FASA and subsection 4402(e) of

Clinger-Cohen provide that, except as

specifically provided in these Acts,

nothing in the Acts shall be construed

to require the renegotiation or

modification of contracts in existence

on the date of the enactment of the Acts.

The rule adopts the policy of

encouraging, but not requiring,

appropriate modifications without

consideration, upon the request of the

contractor. If the contracting officer

determines that modification of an

existing contract is appropriate to

incorporate changes authorized by these

Acts, the modification should insert the

current version of the applicable FAR

clauses into the contract.

No comments were received in

response to the FASA interim rule

published in the Federal Register at 61

FR 18915, April 29, 1996, and the

Clinger-Cohen interim rule published in

the Federal Register at 61 FR 69297,

December 31, 1996.

B. Regulatory Flexibility Act

The final rule may have a significant

economic impact on a substantial

number of small entities within the

meaning of the Regulatory Flexibility

Act, 5 U.S.C. 601 et seq., because it

enables industry and the Government to

gain significant benefits, including the

potential reduction of contract costs, by

authorizing the incorporation into

existing contracts any of the Federal

Acquisition Streamlining Act and/or

Clinger-Cohen Act changes that will

benefit the contracting parties. A Final

Regulatory Flexibility Analysis (FRFA)

has been prepared and will be provided

to the Chief Counsel for Advocacy of the

Small Business Administration. A copy

of the FRFA may be obtained from the

FAR Secretariat. The FRFA is

summarized as follows:

There were no public comments received

in response to the Initial Regulatory

Flexibility Analysis. The rule will apply to

all large and small entities that currently

have a Government contract. Most likely,

contractors will not request modification of

contracts under $25,000, because the usually

short period of performance under these

contracts will discourage modification. The

number of active contracts over $25,000 held

by small entities at any point in time or the

total in any one fiscal year is not readily

available from the Federal Procurement

Report, Fiscal Year 1996 through Fourth

Quarter. However, in fiscal year 1996, small

entities were awarded approximately 37,192

contracts over $25,000. The number of

contract modifications requested by small

entities to incorporate Federal Acquisition

Streamlining Act and/or the Clinger-Cohen

Act changes depends on whether they

determine that modifications to their specific

contracts will be advantageous. The rule

imposes no new reporting, recordkeeping, or

other compliance requirements. This rule is

the only practical alternative to implement

subsection 10002(e) of the Federal

Acquisition Streamlining Act and

subsections 4402 (d) and (e) of the ClingerCohen Act.

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 43

Government procurement.

Interim Rule Adopted as Final Without

Change

Accordingly, the interim rule

amending 48 CFR Part 43, which was

published at 61 FR 69297, December 31,

1996, is hereby adopted as final without

change.

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

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

Dated: August 14, 1997.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

[FR Doc. 97–22075 Filed 8–21–97; 8:45 am]

BILLING CODE 6820–EP–U

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Chapter I

Federal Acquisition Regulation; 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.

SUMMARY: This document is issued

under the joint authority of the

Secretary of Defense, the Administrator

of General Services and the

Administrator for the National

Aeronautics and Space Administration

as the Federal Acquisition Regulation

(FAR) Council. This Small Entity

Compliance Guide has been prepared in

accordance with Section 212 of the

Small Business Regulatory Enforcement

Fairness Act of 1996 (Pub. L. 104–121).

It consists of a summary of rules

appearing in Federal Acquisition

Circular (FAC) 97–01 which amend the

FAR. The rules marked with an asterisk

(*) are those for which a final regulatory

flexibility analysis has been prepared in

accordance with 5 U.S.C. 604. Further

information regarding these rules may

be obtained by referring to FAC 97–01

which precedes this notice. This

document may be obtained from the

Internet.

FOR FURTHER INFORMATION CONTACT:

Beverly Fayson, FAR Secretariat, (202)

501–4755.

LIST OF RULES IN FAC 97–01

Item Subject FAR case Analyst

I ........................ Business Process Innovation .............................................................................................. 97–006 De Stefano.

II ....................... FASA and the Walsh-Healey Public Contracts Act ............................................................ 96–601 O’Neill.
44832 Federal Register / Vol. 62, No. 163 / Friday, August 22, 1997 / Rules and Regulations

LIST OF RULES IN FAC 97–01—Continued

Item Subject FAR case Analyst

III ...................... *Irrevocable Letters of Credit and Alternatives to Miller Act Bonds .................................. 95–301 O’Neill.

IV ...................... Automatic Data Processing Equipment Leasing Costs ...................................................... 96–010 Olson.

V ....................... *Environmentally Sound Products ...................................................................................... 92–054A De Stefano.

VI ...................... New FAR Certifications ....................................................................................................... 96–329 De Stefano.

VII ..................... *Service Contracting ........................................................................................................... 95–311 O’Neill.

VIII .................... ADP/Telecommunications Federal Supply Schedules ....................................................... 96–602 Nelson.

IX ...................... Certificate of Competency (Interim) .................................................................................... 96–002 Moss.

X ....................... Economically Disadvantaged Individuals ............................................................................ 97–008 Moss.

XI ...................... Minority Small Business and Capital Ownership ................................................................ 95–028 Moss.

XII ..................... Executive Order 12933, Nondisplacement of Qualified Workers Under Certain Contracts

(Interim).

94–610 O’Neill.

XIII .................... Designation of Hong Kong .................................................................................................. 97–019 Linfield.

XIV .................... Foreign Differential Pay ...................................................................................................... 96–012 Olson.

XV ..................... Local Government Lobbying Costs ..................................................................................... 96–003 Nelson.

XVI .................... Independent Government Estimates—Construction ........................................................... 97–005 O’Neill.

XVII ................... Year 2000 Compliance ....................................................................................................... 96–607 Nelson.

XVIII .................. * Modification of Existing Contracts under FASA and FARA .............................................. 96–606 De Stefano.

Item I—Business Process Innovation

(FAR Case 97–006)

This final rule amends FAR 1.102–

4(e) to encourage contracting officers, in

their role as members of the

Government acquisition team, to take

the lead in encouraging business

process innovations and ensuring that

business decisions are sound.

Item II—FASA and the Walsh-Healey

Public Contracts Act (FAR Case 96–601)

The interim rule published as Item I

of Federal Acquisition Circular 90–43 is

converted to a final rule without change.

The rule amends the FAR to eliminate

the requirement that covered contractors

under the Walsh-Healey Public

Contracts Act must be either the

manufacturer of or a regular dealer in

the materials, supplies, articles, or

equipment to be manufactured or used

in the performance of the contract.

Item III—Irrevocable Letters of Credit

and Alternatives to Miller Act Bonds

(FAR Case 95–301)

The interim rule published as Item

XVII of FAC 90–39 is revised and

finalized. The rule amends FAR Parts 28

and 52 to provide for use of Irrevocable

Letters of Credit as substitutes for

corporate or individual surety on Miller

Act bonds, and to provide alternatives

to Miller Act payment bonds for

construction contracts valued at $25,000

to $100,000, which are no longer subject

to the Miller Act, in accordance with

Section 4104(b)(1) of the Federal

Acquisition Streamlining Act of 1994

(Public Law 103–355).

Item IV—Automatic Data Processing

Equipment Leasing Costs (FAR Case 96–

010)

The interim rule published as Item I

of FAC 90–44 is converted to a final rule

without change. The rule amends FAR

Part 31 to remove the automatic data

processing equipment leasing cost

principle.

Item V—Environmentally Sound

Products (FAR Case 92–054A)

The interim rule published as Item II

of FAC 90–27 is revised and finalized.

The rule amends FAR Parts 1, 7, 10, 11,

13, 15, 23, 36, 42, and 52 to incorporate

policies for the acquisition of

environmentally preferable and energyefficient products and services. The

final rule differs from the interim rule

in that it clarifies the acceptability of

used, reconditioned, or remanufactured

supplies, or former Government surplus

property, proposed for use under a

contract; revises the clause at 52.211–5

regarding acceptability of such material

and limits its use in solicitations and

contracts for commercial items;

eliminates the provisions at 52.211–6

and 52.223–8 and the clause at 52.211–

7; revises the clause at 52.223–9 to

streamline reporting requirements

regarding the recovered material content

of EPA-designated items; and eliminates

references to agency designation of

items requiring minimum recovered

material content.

Item VI—New FAR Certifications (FAR

Case 96–329)

This final rule adds a new section at

FAR 1.107 to reflect the provisions of

Section 4301(b)(2) of the Clinger-Cohen

Act of 1996 (Pub. L. 104–106). Section

4301(b)(2) prohibits the inclusion of a

new certification requirement in the

FAR for contractors or offerors unless

the certification requirement is

specifically imposed by statute, or

unless a written justification for such

certification requirement is provided to

the Administrator for Federal

Procurement Policy by the FAR Council

and the Administrator approves in

writing the inclusion of the certification.

Item VII—Service Contracting (FAR

Case 95–311)

This final rule amends FAR Parts 7,

16, 37, 42, 46, and 52 to implement

Office of Federal Procurement Policy

(OFPP) Policy Letter 91–2, Service

Contracting. The OFPP policy letter

prescribes policies and procedures for

use of performance-based contracting

methods.

Item VIII—ADP/Telecommunications

Federal Supply Schedules (FAR Case

96–602)

This final rule amends FAR Subpart

8.4 to clarify procedures for placing

orders and obtaining price reductions

under GSA Federal supply schedule

contracts, and to add information

regarding the ‘‘GSA Advantage!’’ on-line

shopping service. Related amendments

are made at FAR 13.202(a)(4) and

51.103.

Item IX—Certificate of Competency

(FAR Case 96–002)

This interim rule amends FAR Parts 9

and 19 to implement revisions made to

the Small Business Administration’s

(SBA) procurement assistance programs

contained in 13 CFR Part 125. The rule

notably (1) increases the threshold over

which contracting officers may appeal

the award of a Certificate of Competency

(COC) from $25,000 to $100,000; (2)

updates the names of SBA offices

involved in processing COC’s; and (3)

implements the requirement that

compliance with the limitations on

subcontracting be considered an

element of responsibility. In addition,

this interim rule removes language

implementing Section 15(c) of the Small
Federal Register / Vol. 62, No. 163 / Friday, August 22, 1997 / Rules and Regulations 44833

Business Act (15 U.S.C. 644(c)) as

amended by Section 305 of Pub. L. 103–

403, Small Business Administration

Reauthorization and Amendments Act

of 1994. Section 305, which authorized

public and private organizations for the

handicapped to participate in

acquisitions set aside for small

businesses, has expired.

Item X—Economically Disadvantaged

Individuals (FAR Case 97–008)

This final rule amends the definition

of ‘‘small disadvantaged business

concern’’ at FAR 19.001 to update the

categories of individuals considered to

be socially and economically

disadvantaged. In accordance with the

Small Business Administration’s

regulations at 13 CFR 124.105, the

Maldives Islands has been added to the

category of ‘‘Subcontinent Asian

Americans’’; and Macao, Hong Kong,

Fiji, Tonga, Kiribati, Tuvalu, and Nauru

have been added to the category of

‘‘Asian Pacific Americans.’’

Item XI—Minority Small Business and

Capital Ownership (FAR Case 95–028)

The interim rule published as Item VII

of FAC 90–43 is revised and finalized.

The rule amends the FAR to reflect

changes to the Small Business

Administration’s (SBA) regulations at 13

CFR Parts 121 and 124, which address

the Minority Small Business and Capital

Ownership Development Program. The

rule clarifies eligibility and procedural

requirements for procurements under

the 8(a) program. The final rule differs

from the interim rule in that it amends

FAR 19.804–2 to reflect changes that the

SBA is making in its processing of 8(a)

requirements.

Item XII—Executive Order 12933,

Nondisplacement of Qualified Workers

Under Certain Contracts (FAR Case 94–

610)

This interim rule adds a new FAR

Subpart 22.12 implementing Executive

Order 12933, Nondisplacement of

Qualified Workers Under Certain

Contracts, of October 20, 1994. The

Executive Order and the interim rule

require that workers on certain building

service contracts be given the right of

first refusal for employment with the

successor contractor, if they would

otherwise lose their jobs as a result of

the award of the successor contract.

Item XIII—Designation of Hong Kong

(FAR Case 97–019)

This final rule amends FAR 25.401 to

add Hong Kong as a designated country

under the Trade Agreements Act of

1979, as directed by the United States

Trade Representative.

Item XIV—Foreign Differential Pay

(FAR Case 96–012)

The interim rule published as Item VI

of FAC 90–44 is converted to a final rule

without change. The rule amends FAR

31.205–6 to remove the prohibition on

the calculation of foreign differential

pay based directly on an employee’s

specific increase in income taxes

resulting from assignment overseas.

Item XV—Local Government Lobbying

Costs (FAR Case 96–003)

The interim rule published as Item XI

of FAC 90–43 is converted to a final rule

without change. The rule amends FAR

31.205–22 to make allowable the costs

of any lobbying activities to influence

local legislation in order to directly

reduce contract costs, or to avoid

material impairment of the contractor’s

authority to perform the contract.

Item XVI—Independent Government

Estimates—Construction (FAR Case 97–

005)

This final rule amends FAR 36.203(a)

and 36.605(a) to raise the threshold for

a mandatory independent Government

estimate of construction costs and

architect-engineer costs from $25,000 to

$100,000.

Item XVII—Year 2000 Compliance

(FAR Case 96–607)

The interim rule published as Item

XIV of FAC 90–45 is revised and

finalized. The rule provides guidance

regarding the acquisition of information

technology that is Year 2000 compliant.

The final rule differs from the interim

rule in that it makes clarifying revisions

to the definition of ‘‘Year 2000

compliant’’ at FAR 39.002.

Item XVIII—Modification of Existing

Contracts Under FASA and FARA (FAR

Case 96–606)

The interim rule published as Item

VIII of FAC 90–44 is converted to a final

rule without change. The rule amends

FAR 43.102 to implement subsection

10002(e) of the Federal Acquisition

Streamlining Act of 1994 (Public Law

103–355) and subsections 4402 (d) and

(e) of the Clinger-Cohen Act of 1996

(Pub. L. 104–106). The rule authorizes,

but does not require, contracting

officers, if requested by the contractor,

to modify existing contracts without

requiring consideration, to incorporate

changes authorized by the Act.

Dated: August 14, 1997.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

[FR Doc. 97–22076 Filed 8–21–97; 8:45 am]

BILLING CODE 6820–EP–P