44802 Federal Register / Vol. 62, No. 163 / Friday, August 22, 1997 / Rules and Regulations

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Chapter 1

Federal Acquisition Circular 97–01;

Introduction

AGENCIES: Department of Defense (DoD),

General Services Administration (GSA),

and National Aeronautics and Space

Administration (NASA).

ACTION: Summary presentation of final

and interim rules.

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) 97–01. Each rule follows

this document in the order listed below.

A companion document, the Small

Entity Compliance Guide follows this

FAC and may be located on the Internet.

DATES: For effective dates and comment

dates, see separate documents which

follow.

FOR FURTHER INFORMATION CONTACT: The

analyst whose name appears (in the

table below) in relation to each FAR

case or subject area. For general

information, contact Beverly Fayson,

Room 4035, GS Building, Washington,

DC 20405 (202) 501–4755. Please cite

FAC 97–01 and specific FAR case

number(s).

SUPPLEMENTARY INFORMATION: Federal

Acquisition Circular 97–01 amends the

Federal Acquisition Regulation (FAR) as

specified below:

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.

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
Federal Register / Vol. 62, No. 163 / Friday, August 22, 1997 / Rules and Regulations 44803

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

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

amended by Section 305 of Public Law

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 (Pub. L. 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.

Federal Acquisition Circular

Federal Acquisition Circular (FAC)

97–01 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 97–01 are effective October 21,

1997, except for Items IX, XII, and XIII,

which are effective August 22, 1997.
44804 Federal Register / Vol. 62, No. 163 / Friday, August 22, 1997 / Rules and Regulations

Dated: August 7, 1997.

Eleanor R. Spector,

Director, Defense Procurement.

Dated: August 7, 1997.

Tom Luedtke,

Deputy Associate Administrator for

Procurement National Aeronautics and Space

Administration.

Dated: August 7, 1997.

Edward C. Loeb,

Acting Deputy Associate Administrator,

Office of Acquisition Policy, General Services

Administration.

[FR Doc. 97–22074 Filed 8–15–97; 1:12 pm]

BILLING CODE 6820–EP–P

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Part 1

[FAC 97–01; FAR Case 97–006; Item I]

RIN 9000–AH64

Federal Acquisition Regulation;

Business Process Innovation

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

state that contracting officers, in their

role as members of the Government

acquisition team, should take the lead in

encouraging business process

innovations and ensuring that business

decisions are sound. 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 97–006.

SUPPLEMENTARY INFORMATION:

A. Background

This final rule amends FAR 1.102–

4(e) by adding a statement that

contracting officers, in their role as

members of the Government acquisition

team, should take the lead in

encouraging business process

innovations and ensuring that business

decisions are sound.

B. Regulatory Flexibility Act

The final rule does not constitute a

significant FAR revision within the

meaning of FAR 1.501 and Pub. L. 98–

577, and publication for public

comment 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 cite 5 U.S.C.

601, et seq. (FAC 97–01, FAR case 97–

006), 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 1

Government procurement.

Dated: August 7, 1997.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Part 1 is amended

as set forth below:

PART 1—FEDERAL ACQUISITION

REGULATIONS SYSTEM

1. The authority citation for 48 CFR

Part 1 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 1.102–4 is amended by

adding the following sentence at the end

of paragraph (e):

1.102–4 Role of the acquisition team.

* * * * *

(e) * * * Contracting officers should

take the lead in encouraging business

process innovations and ensuring that

business decisions are sound.

[FR Doc. 97–21486 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, 9, 14, 19, 22, 33, and

52

[FAC 97–01; FAR Case 96–601; Item II]

RIN 9000–AH31

Federal Acquisition Regulation; FASA

and the Walsh-Healey Public Contracts

Act

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 90–43 on

December 20, 1996, to a final rule

without change. The rule amends the

Federal Acquisition Regulation (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. 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. Jack

O’Neill, Procurement Analyst, at (202)

501–3856. Please cite FAC 97–01, FAR

case 96–601.

SUPPLEMENTARY INFORMATION:

A. Background

On December 20, 1996 (61 FR 67409),

the DoD, GSA, and NASA published an

interim FAR rule implementing the

Federal Acquisition Streamlining Act of

1994 (Pub. L. 103–355) amendments to

the Walsh-Healey Public Contracts Act.

The interim rule deleted the

‘‘manufacturer’’ or ‘‘regular dealer’’

requirements and all related definitions

from the FAR, consistent with a

Department of Labor final rule issued on