Federal Register / Vol. 60, No. 107 / Monday, June 5, 1995 / Rules and Regulations 29491

directly related to the originating

telephone subscriber’s call or

transaction;

(2) Prohibit such person from reusing

or selling the telephone number or

billing information without first

(i) Notifying the originating telephone

subscriber and,

(ii) Obtaining the affirmative consent

of such subscriber for such reuse or sale;

and,

(3) Prohibit such person from

disclosing, except as permitted by

paragraphs (a) (1) and (2) of this section,

any information derived from the

automatic number identification or

charge number service for any purpose

other than

(i) Performing the services or

transactions that are the subject of the

originating telephone subscriber’s call,

(ii) Ensuring network performance

security, and the effectiveness of call

delivery,

(iii) Compiling, using, and disclosing

aggregate information, and

(iv) Complying with applicable law or

legal process.

(b) The requirements imposed under

paragraph (a) of the section shall not

prevent a person to whom automatic

number identification or charge number

services are provided from using

(1) The telephone number and billing

information provided pursuant to such

service, and

(2) Any information derived from the

automatic number identification or

charge number service, or from the

analysis of the characteristics of a

telecommunications transmission, to

offer a product or service that is directly

related to the products or services

previously acquired by that customer

from such person. Use of such

information is subject to the

requirements of 47 CFR 64.1200 and

64.1504(c).

5. Section 64.1603 is revised to read

as follows:

§ 64.1603 Customer notification.

Any common carrier participating in

the offering of services providing calling

party number, ANI, or charge number

on interstate calls must notify its

subscribers, individually or in

conjunction with other carriers, that

their telephone numbers may be

identified to a called party. Such

notification must be made not later than

December 1, 1995, and at such times

thereafter as to ensure notice to

subscribers. The notification must be

effective in informing subscribers how

to maintain privacy by dialing *67 (or

1167 for rotary or pulse-dialing phones)

on interstate calls. The notice shall

inform subscribers whether dialing *82

(or 1182 for rotary or pulse-dialing

phones) on interstate calls is necessary

to present calling party number to called

parties. For ANI or charge number

services for which such privacy is not

provided, the notification shall inform

subscribers of the restrictions on the

reuse or sale of subscriber information.

6. Section 64.1604 is revised to read

as follows:

§ 64.1604 Effective date

The provisions of §§ 64.1600 and

64.1602 are effective April 12, 1995. The

provisions of §§ 64.1601 and 64.1603

are effective December 1, 1995, except

§§ 64.1601 and 64.1603 do not apply to

public payphones and partylines until

January 1, 1997.

[FR Doc. 95–13760 Filed 6–2–95; 8:45 am]

BILLING CODE 6712–01–M

47 CFR Part 73

[MM Docket No. 94–146; RM–8557]

Radio Broadcasting Services;

Houston, AK

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: This document allots Channel

242A to Houston, Alaska, as that

community’s third local FM service, in

response to a petition for rule making

filed on behalf of Evangelistic Alaska

Missionary Fellowship, Inc. See 59 FR

66287, December 23, 1994. Coordinates

used for Channel 242A at Houston are

61–38–01 and 149–50–28. With this

action, the proceeding is terminated.

DATES: Effective July 17, 1995. The

window period for filing applications

on Channel 242A at Houston, Alaska,

will open on July 17, 1995, and close on

August 17, 1995.

FOR FURTHER INFORMATION CONTACT:

Nancy Joyner, Mass Media Bureau, (202)

418–2180. Questions related to the

window application filing process for

Channel 242A at Houston, Alaska,

should be addressed to the Audio

Services Division, FM Branch, (202)

418–2700.

SUPPLEMENTARY INFORMATION: This is a

synopsis of the Commission’s Report

and Order, MM Docket No. 94–146,

adopted May 23, 1995, and released

May 31, 1995. The full text of this

Commission decision is available for

inspection and copying during normal

business hours in the FCC’s Reference

Center (Room 239), 1919 M Street, NW.,

Washington, DC. The complete text of

this decision may also be purchased

from the Commission’s copy

contractors, International Transcription

Service, Inc., (202) 857–3800, located at

1919 M Street, NW., Room 246, or 2100

M Street, NW., Suite 140, Washington,

DC 20037.

List of Subjects in 47 CFR Part 73

Radio broadcasting.

Part 73 of title 47 of the Code of

Federal Regulations is amended as

follows:

PART 73—[AMENDED]

1. The authority citation for part 73

continues to read as follows:

Authority: Secs. 303, 48 Stat., as amended,

1082; 47 U.S.C. 154, as amended.

§ 73.202 [Amended]

2. Section 73.202(b), the Table of FM

Allotments underAlaska, is amended by

adding Channel 242A at Houston.

Federal Communications Commission.

John A. Karousos,

Chief, Allocations Branch, Policy and Rules

Division, Mass Media Bureau.

[FR Doc. 95–13640 Filed 6–2–95; 8:45 am]

BILLING CODE 6712–01–F

DEPARTMENT OF DEFENSE

48 CFR Parts 202, 203, 206, 207, 209,

215, 217, 219, 225, 226, 228, 231, 232,

235, 237, 242, 244, 245, 247, 249, 251,

252, 253, and Appendix C to Chapter 2

[Defense Acquisition Circular (DAC) 91–7]

Defense Federal Acquisition

Regulation Supplement; Miscellaneous

Amendments

AGENCY: Department of Defense (DoD).

ACTION: Final rules.

SUMMARY: Defense Acquisition Circular

(DAC) 91–7 amends the Defense FAR

Supplement (DFARS) to revise, finalize,

or add language on competitive

prototyping, contractor accounting

controls, award to foreign controlled

contractors, terrorist countries,

debarment and suspension, small

purchases in support of contingency

operations, greatest value sources,

predetermined indirect cost rates,

undefinitized contract actions, small

disadvantaged business, historically

black colleges and universities and

minority institutions, Indian tribal or

Alaska native corporations, North

American Free Trade Agreement, valves

and machine tools, restriction on

procurement of goods, aircraft fuel cells,

lifeboat survival systems, performance

outside the United States, offset
29492 Federal Register / Vol. 60, No. 107 / Monday, June 5, 1995 / Rules and Regulations

administrative costs, preference for local

and small businesses, preference for

local residents, surety bonds, limitation

on allowable individual compensation,

restructuring costs under defense

contracts, indirect costs of institutions

of higher learning, research and

development definitions, manufacturing

science and technology program,

research and development contracting,

Federally Funded Research and

Development Centers, streamlined

research and development contracting

procedures test, personal services

contracts, services at installations being

closed, production surveillance,

contractor insurance/pension reviews,

best value—stevedoring, returnable

cylinders, reflagging or repair work,

screening threshold for contractor

inventory, notification of proposed

program termination of reduction, and

Government supply sources.

DATES: Effective date May 17, 1995.

FOR FURTHER INFORMATION CONTACT:

Ms. Lucile Martin, Defense Acquisition

Regulations Directorate,

PDUSD(A&T)DP(DAR), 3062 Defense

Pentagon, Washington, DC 20302–3062,

telephone (703) 602–0131.

SUPPLEMENTARY INFORMATION:

A. Background

This Defense Acquisition Circular

(DAC) 91–7 includes 39 rules and

miscellaneous editorial amendments.

Twelve of the rules in the DAC (Item

XXIII, III, VI, VII, XIV, XVIII, XX, XXII,

XXVI, XXVIII, XXIX, and XXX) were

published previously in the Federal

Register and thus are not included as

part of this rulemaking notice. These 12

rules are being published in the DAC to

revise the looseleaf edition of DFARS to

conform to the previously published

revisions.

C. Regulatory Flexibility Act

DAC 91–7, Items, I, XXI, XXV, XXXV

The Regulatory Flexibility Act does

not apply because these rules are not

significant revisions within the meaning

of Public Law 98–577. However,

comments from small entities will be

considered in accordance with section

610 of the Act. Such comments must be

submitted separately. Please cite DFARS

Case 95–610 in correspondence.

DAC 91–7, Items II, IV, V, VII, IX, X,

XIII, XV, XVI, XVII, XXIV, XXXII,

XXXIV, XXXVI, XXXVII, XXXIX

DoD certifies that these rules will not

have a significant economic impact on

a substantial number of small entities

within the meaning of the Regulatory

Flexibility Act because:

Item II—The rule emphasizes existing

requirements for contractors to ensure

that cost data is reliable and contract

costs are properly allocated.

Item IV—The rule only applies to

solicitations and contracts with an

estimated or actual value exceeding

$5,000,000.

Item V—The rule only applies to

contractors and subcontractors that are

debarred, suspended, or proposed for

debarment.

Item VII—The rule clarified DoD’s

existing policy regarding contractor

selection of subcontractors based on

greatest value.

Item IX—The rule clarifies the

existing regulatory language regarding

statutory restrictions on the use of

undefinitized contract actions.

Item X—The rule updates the

definitions of SDB and HBCU, and

eliminates the requirement for an offeror

that represents itself as an SDB, HBCU,

or MI, to maintain its status as such as

the time of contract award.

Item XIII—The rule implements

statutory restrictions on the acquisition

of machine tool accessories of foreign

manufacture.

Item XV—The rule implements

statutory restrictions on the acquisition

of fuel cells of foreign manufacture.

Item XVI—The rule implements

statutory restrictions on the acquisition

of lifeboat survival systems of foreign

manufactures or assembly.

Item XVII—The rule only applies to

contracts that exceed $500,000 and

involve performance outside the United

States.

Item XXIV—The rule prohibits DoD

from placing certain limitations on the

reimbursement of indirect costs to

institutions of higher learning.

Item XXXII—The rule merely

simplifies the method used by the

Government to determine when on-site

production surveillance will be

performed on a contract.

Item XXXIV—The rule is consistent

with the policy at FAR 15.605 regarding

selection of a source whose proposal

offers the greatest value to the

Government.

Item XXXVI—The rule implements

statutory restrictions on foreign

performance of certain reflagging or

repair work.

Item XXXVII—The rule merely raises

the dollar threshold for Government

screening of excess contractor inventory

prior to disposal.

Item XXXIX—The rule uses standard

commercial terms for payment within

30 days, for contractor purchases from

Government supply sources.

DAC 91–7, Items XI, XII, XIX, XXVII,

XXXI, XXXIII, XXXVIII

The Regulatory Flexibility Act

applies. A final regulatory analysis has

been performed and is available by

writing the Defense Acquisition

Regulations Directorate, ATTN: Ms.

Michele Peterson,

PDUSD(A&T)DP(DAR), 3062 Defense

Pentagon, Washington, DC 20301–3062.

D. Paperwork Reduction Act

DAC 91–7, Items I, II, V, VII, IX, X, XI,

XV, XVI, XIX, XXI, XXIV, XXV, XXXI,

XXXII, XXXIV, XXXV, XXXVI, XXXVII,

XXXVIII, XXXIX

The Paperwork Reduction Act does

not apply because the revisions in this

rulemaking notice do not contain and/

or affect information collection

requirements which require the

approval of OMB under 44 U.S.C. 3501

et seq.

DAC 91–7, Items IV, XII, XIII, XVII,

XXVII, XXXIII

The Paperwork Reduction Act

applies. OMB has improved the

information collection requirements.

The following OMB control numbers

apply:

Item IV—No. 0704–0372

Item XII—No. 0704–0361

Item XIII—No. 0704–0350

Item XVII—No. 0704–0355

Item XXVII—No. 0704–0188 and 0704–

0264

Item XXXIII—No. 0704–0250

Michele P. Peterson,

Executive Editor, Defense Acquisition

Regulations Council.

Defense Acquisition Circular (DAC)

91–7 amends the Defense FAR

Supplement (DFARS) 1991 edition,

prescribes procedures to be followed,

and provides informational interest

items. The amendments, procedures,

and information are summarized as

follows:

Item I—Competitive Prototyping

This final rule deletes the language at

DFARS 207.105(b)(2)(v), which

addressed competitive prototyping for

major acquisition programs as required

by 10 U.S.C. 2438. Section 3006 of the

Federal Acquisition Streamlining Act of

1994 (Pub. L. 103–355) repealed 10

U.S.C. 2438.

Item II—Contractor Accounting

Controls

This final rule amends DFARS

209.104–1, 232.503–6, 242.302, and

253.209–1, and adds a new subpart at

242.75, to provide policies and

procedures applicable to contractor
Federal Register / Vol. 60, No. 107 / Monday, June 5, 1995 / Rules and Regulations 29493

accounting systems and related internal

controls. Contractors receiving costreimbursement or incentive type

contracts, or contracts which provide for

progress payments based on costs or on

a percentage or stage of completion,

must maintain an accounting system

and related internal controls which

provide reasonable assurance that (1)

Applicable laws and regulations are

complied with; (2) the accounting

system and cost data are reliable; (3) risk

of misallocations and mischarges are

minimized; and (4) contract allocations

and charges are consistent with invoice

procedures.

Item III—Award to Foreign Controlled

Contractors

This final rule was issued by

Departmental Letter 94–013, effective

September 29, 1994. The rule revises

and finalizes the interim rule published

as Item VII of DAC 91–5. The rule

implements 10 U.S.C. 2536, which

prohibits award of a DoD contract under

a national security program to an entity

controlled by a foreign government, if

access to proscribed information is

required to perform the contract. The

final rule differs from the interim rule

in that it (1) revises the definition of

‘‘entity controlled by a foreign

government’’ at DFARS 252.209–7002 as

required by Section 842 of the Fiscal

Year 1994 Defense Authorization Act

(Pub. L. 103–160); (2) revises the

definition of ‘‘effectively owned or

controlled’’ at 252.209–7002 for clarity;

(3) revises the definition of ‘‘foreign

government’’ at 252.209–7002 for

consistency with the regulations at 31

CFR Chapter V, issued by the Treasury

Department Office of Foreign Assets

Control; and (4) makes minor clarifying

revisions at 209.101, 209.104–1(g)(ii),

225.702, and 252.209–7002(b).

Item IV—Terrorist Countries

The interim rule issued by

Departmental Letter 94–014 on

September 29, 1994, is converted to a

final rule without change. The rule

implements Section 843 of the Fiscal

Year 1994 Defense Authorization Act

(Public Law 103–160). Section 843

requires offerors and contractors under

DoD solicitations and contracts

exceeding $5,000,000 to report

commercial transactions conducted

with the government of a terrorist

country. The rule adds new language at

DFARS 209.104–1(g)(iii), a new

provision at 252.209–7003, and a new

clause at 252.209–7004. The rule also

revises the provision at 252.209–7001

for consistency with the terminology

used in the new provision and clause.

Item V—Debarment and Suspension

This final rule adds a new subsection

at DFARS 209.405–1 to place

restrictions on the issuance of orders

under indefinite quantity and Federal

Supply Schedule contracts in instances

where the contractor has been debarred,

suspended, or proposed for debarment.

The rule also clarifies that the

restriction at FAR 9.405–1(b), against

renewal or extension of existing

contracts or consent to subcontracts

with contractors debarred, suspended,

or proposed for debarment, also applies

to the exercise of options.

Item VI—Small Purchases in Support of

Contingency Operations

This final rule was issued by

Departmental Letter 94–015, effective

September 29, 1994. The rule amends

DFARS 213.000, 213.101, 213.404, and

213.505 to fully implement DoD’s

authority to use simplified procedures

for acquisitions in support of

contingency operations. The rule

provides for the use of simplified

procedures for acquisitions of $100,000

or less, for contracts to be awarded and

performed outside the United States in

support of a contingency operation as

defined in 10 U.S.C. 101(a)(13).

Item VII—Greatest Value Sources

This final rule (1) adds language at

DFARS 215.806–1(a) (1) to clarify DoD

policy regarding the selection of

subcontractors based on greatest value;

(2) adds language at 244.202–2

regarding consideration of greatest value

when consent to subcontract is required;

and (3) revises Section C–207.5 of

Appendix C to establish more definitive

criteria for Government personnel to

consider when evaluating contractor

vendor rating systems during a

Contractor Purchasing System Review.

Item VIII—Predetermined Indirect Cost

Rates

This final rule was issued by

Departmental Letter 94–018, effective

October 18, 1994. The rule adds

language at DFARS 216.307, 242.705–3,

and 252.216–7002 to implement

revisions made to OMB Circular A–21,

Cost Principles for Educational

Institutions, on July 26, 1993. The

revised circular provides that indirect

cost rates for educational institutions

may be predetermined for a period of up

to four years when cost experience and

other pertinent facts are sufficient to

assess the probable level of indirect

costs during subsequent accounting

periods.

Item IX—Undefinitized Contract

Actions

This final rule revises DFARS

217.7404–3(a)(2), 217.7404–4, and

217.7404–5 to clarify the policy and

procedures implementing 10 U.S.C.

2326(b) with regard to limitations on the

use of undefinitized contract actions.

Item X—Small Disadvantaged Business,

Historically Black Colleges and

Universities and Minority Institutions

The interim rule published as Item

XLVII of DAC 91–6 is converted to a

final rule without change. The rule

implements Subsections 811 (a), (b), and

(c) of the Fiscal Year 1994 Defense

Authorization Act (Pub. L. 103–160).

Subsections 811 (a) and (b) of Pub. L.

103–160 revise the definitions of

historically black colleges and

universities (HBCU) and minority

institutions (MI). Subsection 811(c)

deletes the requirement for an offeror,

that represents itself on a DoD

solicitation as a small disadvantaged

business, HBCU, or MI, to maintain its

status as such at the time of award. The

implementing DFARS language can be

found at 219.301(a), 226.7005(a)(1),

252.219–7003(a), 252.219–7006(a),

252.226–7000 (a) and (b), and 252.226–

7001(a).

Item XI—Indian Tribal or Alaska

Native Corporation

The interim rule issued by

Departmental Letter 94–009 on May 3,

1994, is revised and finalized. The rule

implements Section 8051 of the Fiscal

Year 1994 Defense Appropriations Act

(Pub. L. 103–139) and Section 8012 of

the Fiscal Year 1995 Defense

Appropriations Act (Pub. L. 103–335).

Sections 8051 and 8012 provide that,

notwithstanding any other provision of

law, a qualified Indian Tribal

Corporation or Alaska Native

Corporation furnishing the product of a

responsible small business concern

shall not be denied the opportunity to

compete for and be awarded a contract

under the Small Disadvantaged

Business (SDB) preference programs.

The final rule differs from the interim

rule in that it adds references to Section

8012 of Pub. L. 103–335 at DFARS

219.502–2–70(a)(1)(ii), 252.219–

700(f)(2), 252.219–7002(c), and

252.219–7006(d)(2).

Item XII—North American Free Trade

Agreement

The interim rule published as Item

XVIII of DAC 91–6 is revised and

finalized. The rule incorporates Buy

American Act and Balance of Payment

Program waivers required by the North

American Free Trade Agreement
29494 Federal Register / Vol. 60, No. 107 / Monday, June 5, 1995 / Rules and Regulations

(NAFTA) Implementation Act of 1993

(Pub. L. 103–182). The final rule differs

from the interim rule in that it amends

the provision at DFARS 252.225–7035,

the clause at 252.225–7036, and the

clause prescription at 225.408(a)(4)(B),

to recognize the $25,000 threshold for

application of NAFTA to Canadian end

products.

Item XIII—Valves and Machine Tools

This final rule adds a new provision

at DFARS 252.225–7040, Machine Tool

List, and corresponding prescriptive

language at 225.7004–2(b) and

225.7004–6(c). The provision at DFARS

252.225–7040 requires offerors to

identify the country of manufacture and

the cost of machine tool accessories to

be provided under a contract, if the

accessories are not listed in the

schedule as separate line items and are

not of U.S. or Canadian origin. This

information will facilitate evaluation of

machine tool accessories by supply

class, as required by 10 U.S.C. 2534, to

determine if foreign source restrictions

apply.

Item XIV—Restriction on Procurement

of Goods

This interim rule was issued by

Departmental Letter 95–009, effective

April 10, 1995. The rule revises DFARS

Subpart 225.70 and the clauses at

252.225–7017 and 252.225–7029, to

implement 10 U.S.C. 2534 as amended

by Section 814 of the Fiscal Year 1995

Defense Authorization Act (Pub. L. 103–

337) and Section 4102(i) of the Federal

Acquisition Streamlining Act of 1994

(Pub. L. 103–355). Section 814 revises

the existing foreign source restrictions

for machine tools and valves, buses,

chemical weapons antidote, air circuit

breakers, and antifriction bearings, by

uniformly permitting acquisition of

Canadian items, and by expanding and

standardizing the waiver criteria.

Section 4102(I) exempts acquisitions

below the simplified acquisition

threshold from these restrictions.

Item XV—Aircraft Fuel Cells

The interim rule published as Item

XLIV of DAC 91–6 is revised and

finalized. The rule implements Section

8090 of the Fiscal Year 1994 Defense

Appropriations Act (Pub. L. 103–139)

and Section 8075 of the Fiscal Year

1995 Defense Appropriations Act (Pub.

L. 103–335). Sections 8090 and 8075

prohibit the use of fiscal year 1994 or

1995 funds to purchase aircraft fuel

cells unless such cells are produced or

manufactured in the United States by a

domestic-operated entity. The final rule

differs from the interim rule in that it

amends the language at DFARS

225.7021–1 and 225.7021–3(a) to

address fiscal year 1995 requirements.

Item XVI—Lifeboat Survival System

The interim rule published as Item

XLVI of DAC 91–6 is revised and

finalized. The rule implements Section

8124 of the Fiscal Year 1994 Defense

Appropriations Act (Pub. L. 103–139)

and Section 8093 of the Fiscal Year

1995 Defense Appropriations Act (Pub.

L. 103–335). Sections 8124 and 8093

prohibit the purchase of a totally

enclosed lifeboat survival system unless

50 percent or more of the system’s

components are manufactured in the

United States, and 50 percent or more

of the labor in the final manufacture and

assembly of the system is performed in

the United States. The final rule differs

from the interim rule in that it adds a

reference to Pub. L. 103–335 at DFARS

225.7022–1.

Item XVII—Performance Outside the

United States

The interim rule published as Item

XXIX of DAC 91–5 is revised and

finalized. The rule implements 10

U.S.C. 2410g, which requires offerors

and contractors to provide the

Government with advance notification

of contract performance outside the

United States and Canada in certain

instances. The final rule differs from the

interim rule in that (1) Detailed

reporting requirements are deleted from

the clause at DFARS 252.225–7026; (2)

DD Form 2139, which was deleted by

DAC 91–5, is reinstated with a new title

and revised to include the reporting

requirements deleted from the clause at

DFARS 252.225–7026; and (3) editorial

changes are made at 225.7202 and

252.225–7026(b)(3).

Item XVIII—Offset Administrative

Costs

This final rule was issued by

Departmental Letter 94–012, effective

September 28, 1994. The rule revises

DFARS 225.7303–2 to change the

criteria for contractor recovery of offset

administrative costs under foreign

military sale contracts. The change

eliminates the requirement for inclusion

of specific information regarding offset

costs in Letters of Offer and Acceptance

for foreign military sales. A

corresponding revision has been made

to DoD 5105.38–M, Security Assistance

Management Manual.

Item XIX—Preference for Local and

Small Businesses

The interim rule issued as Item XLV

of DAC 91–6 is revised and finalized.

The rule implements Section 2912 of

the Fiscal Year 1994 Defense

Authorization Act (Pub. L. 103–160).

Section 2912 requires DoD, when

entering into contracts as part of the

closure or realignment of a military

installation under a base closure law, to

give preference, to the greatest extent

practicable, to qualified businesses

located in the vicinity of the installation

and to small business and small

disadvantaged business concerns. The

final rule differs from the interim rule

in that it (1) Revises the definition of

‘‘vicinity’’ at DFARS 226.7101 to permit

modification of the definition by the

agency head; and (2) clarifies the

procedures at 226.7103 to address

criteria for consideration of awards to

contractors under the section 8(a)

program.

Item XX—Preference for Local

Residents

This interim rule was issued by

Departmental Letter 95–003, effective

January 26, 1995. The rule amends

DFARS Subpart 226.71 to implement

Section 817 of the Fiscal Year 1995

Defense Authorization Act (Pub. L. 103–

337). Section 817 authorizes the

Secretary of Defense to give preference

to entities that plan to hire local

residents, when entering into contracts

for services to be performed at a military

installation that is affected by closure or

alignment under a base closure law.

Item XXI—Surety Bonds

This final rule amends DFARS

228.102–1 to implement Section 323 of

the Fiscal Year 1995 Defense

Authorization Act (Pub. L. 103–337).

Section 323 extends the authority to

issue surety bonds for certain

environmental programs through

December 31, 1999.

Item XXII—Limitation on Allowable

Individual Compensation

This interim rule was issued by

Departmental Letter 94–019, effective

December 14, 1994. The rule amends

DFARS 231.205, 231.303, 231.603, and

231.703 to implement Section 8117 of

the Fiscal Year 1995 Defense

Appropriations Act (Pub. L. 103–335).

Section 8117 limits allowable costs for

individual compensation to $250,000

per year. This limitation applies to

contracts that are awarded after April

15, 1995, and that are funded with

Fiscal Year 1995 appropriations.

Item XXIII—Restructuring Costs Under

Defense Contracts

This interim rule was issued by

Departmental Letter 94–020, effective

December 29, 1994. The rule adds new

sections at DFARS 231.205–70,

242.1202, and 242.1204 to implement
Federal Register / Vol. 60, No. 107 / Monday, June 5, 1995 / Rules and Regulations 29495

Section 818 of the Fiscal Year 1995

Defense Authorization Act (Pub. L. 103–

337). Section 818 restricts DoD from

reimbursing restructuring costs

associated with a business combination

undertaken by a defense contractor

unless certain conditions are met.

Item XXIV—Indirect Costs of

Institutions of Higher Learning

The interim rule issued by

Departmental Letter 94–010 on May 5,

1994, is converted to a final rule

without change. The rule adds a new

section at DFARS 231.303 to implement

Section 841 of the Fiscal Year 1994

Defense Authorization Act (Pub. L. 103–

160). Section 481 prohibits DoD from

placing any limitation on the

reimbursement of otherwise allowable

indirect costs incurred by an institution

of higher learning, unless that same

limitation is applied uniformly to all

other organizations performing similar

work under DoD contracts.

Item XXV—Research and Development

Definitions

This final rule amends DFARS

235.001 to incorporate the definitions of

the categories of research and

development found in DoD 7000.14–R,

Financial Management Regulation.

Item XXVI—Manufacturing Science

and Technology Program

This interim rule was issued by

Departmental Letter 95–002, effective

January 17, 1995. The rule adds

language at DFARS 235.006 (a) and

(b)(iv) to implement Section 256 of the

Fiscal Year 1995 Defense Authorization

Act (Pub. L. 103–337). Section 256

requires the use of competitive

procedures in awarding contracts under

the Manufacturing Science and

Technology Program, and use of a costsharing arrangement for these contracts

unless an alternative arrangement is

approved by the Secretary of Defense.

Item XXVII—Research and

Development Contracting

This final rule revises DFARS

235.010(b) to provide updated

information regarding the Defense

Technical Information Center (DTIC).

The rule also adds two new clauses at

DFARS 252.235–7010,

Acknowledgment of Support and

Disclaimer, and DFARS 252.235–7011,

Final Scientific or Technical Report

Requirement. The clause at 252.235–

7010 requires contractors to include an

acknowledgment of the Government’s

support in the publication of any

material based on or developed under a

Government contract. The clause at

252.235–7011 requires contractors to

provide DTIC with two copies of

scientific or technical reports delivered

under a Government contract.

Item XXVIII—Federally Funded

Research and Development Centers

(FFRDCs)

This interim rule was issued by

Departmental Letter 95–005, effective

March 3, 1995. The rule adds a new

section at DFARS 235.017–1 to

implement Section 217 of the Fiscal

Year 1995 Defense Authorization Act

(Pub. L. 103–337). Section 217 allows

DoD-sponsored FFRDCs that function

primarily as research laboratories to

respond to solicitations and

announcements for programs which

promote research, development,

demonstration, or transfer of

technology.

Item XXIX—Streamlined Research and

Development Contracting Procedures

Test

This final rule was issued by

Departmental Letter 94–017, effective

October 4, 1994, and Departmental

Letter 95–008, effective March 21, 1995.

The rule adds a new subpart at DFARS

235.70 to establish streamlined research

and development contracting

procedures for use by selected DoD

contracting offices under a test program.

The test will be conducted for a 20-

month period extending from October 1,

1994, to May 31, 1996.

Item XXX—Personal Service Contracts

This interim rule was issued by

Departmental Letter 95–001, effective

January 5, 1995. The rule adds language

at DFARS 206.102(d) and revises

DFARS 237.104(b)(ii) to implement

Section 712 of the Fiscal Year 1994

Defense Authorization Act (Pub. L. 103–

160) and Section 704 of the Fiscal Year

1995 Defense Authorization Act (Pub. L.

103–337). Section 712 requires the

Secretary of Defense to establish

procedures for entering into personal

service contracts under 10 U.S.C. 1091

to carry out health care responsibilities

in medical/dental treatment facilities.

Section 704 provides authority for the

Secretary of Defense to enter into

personal service contracts under 10

U.S.C. 1091 to provide the services of

clinical counselors, family advocacy

program staff, and victim’s services

representatives.

Item XXXI—Services at Installations

Being Closed

The interim rule issued by

Departmental Letter 94–011 on July 8,

1994, is revised and finalized. The rule

implements Section 2907 of the Fiscal

Year 1994 Defense Authorization Act

(Pub. L. 103–160). Section 2907 permits

the Secretary of Defense to contract with

local governments for police, fire

protection, airfield operation, or other

community services at military

installations being closed under Title II

of the Defense Authorization

Amendments and Base Closure and

Realignment Act (Pub. L. 100–526) and

the Defense Base Closure and

Realignment Act of 1990 (Pub. L. 101–

510). The final rule differs from the

interim rule in that it adds a new

paragraph at DFARS 237.7401(d) to

clarify that Subpart 222.71, Right of

First Refusal of Employment, applies to

contracts with local governments unless

it conflicts with the local government’s

civil service selection procedures.

Item XXXII—Production Surveillance

This final rules revises DFARS

242.1104 to simplify the criteria for

determining the extent of production

surveillance to be performed under a

contract. Category 1, 2, and 3

surveillance criteria are eliminated and

replaced with streamlined surveillance

requirements.

Item XXXIII—Contractor Insurance/

Pension Reviews

This final rule revises DFARS

242.7302(a) to increase the dollar

threshold for performance of Contractor

Insurance/Pension Reviews from

$10,000,000 to $40,000,000. The rule

also adds language at 242.7302(d) to

clarify the criteria for determining a

contractor’s eligibility for insurance/

pension review.

Item XXXIV—Best Value—Stevedoring

The interim rule issued by

Departmental Letter 94–016, effective

September 29, 1994, is converted to a

final rule without change. The rule

revises DFARS 247.270–5 and 247.270–

6 to permit contracting officers to

consider factors other than cost or price

when evaluating offers for stevedoring

services.

Item XXXV—Returnable Cylinders

This final rule revises the clause at

DFARS 252.247–7021 and the

corresponding prescriptive language at

247.305–70 to delete references to use of

the clause for acquisitions involving

returnable cylinders. The clause at

DFARS 252.247–7021 now applies to

returnable containers other than

cylinders as the clause at FAR 52.247–

66 applies to returnable cylinders.

References to a 30-day rent-free

Government use period are also deleted

from the clause to facilitate tailoring of

this time period to the circumstances of

the acquisition.
29496 Federal Register / Vol. 60, No. 107 / Monday, June 5, 1995 / Rules and Regulations

Item XXXVI—Reflagging or Repair

Work

The interim rule published as Item

XLIII of DAC 91–6 is revised and

finalized. The rule implements Section

315 of the Fiscal Year 1994 Defense

Authorization Act (Pub. L. 103–160).

Section 315 places restrictions on the

performance of reflagging or repair work

on vessels used under time charter

contracts. The final rule differs from the

interim rule in that it revises the

language at DFARS 247.571(c) and

252.247–7025 to further clarify the

restrictions on the performance of

reflagging or repair work.

Item XXXVII—Screening Threshold

This final rule amends DFARS

245.608–70 to raise the dollar threshold

for screening serviceable and unusable

contractor inventory, with no national

stock number, through the Contractor

Inventory Redistribution System. The

threshold is raised form $500 to $1,000

(except for furniture) to coincide with

the threshold at FAR 45.608–2.

Item XXXVIII—Notification of

Proposed Program Termination or

Reduction

The interim rule published as Item

XXXVIII of DAC 91–6 is revised and

finalized. The rule implements Section

1372 of the Fiscal Year 1994 Defense

Authorization Act (Pub. L. 103–160) as

amended by Section 1142 of the Fiscal

Year 1995 Defense Authorization Act

(Pub. L. 103–337). Section 1372 requires

the Secretary of Defense to provide

certain notices regarding the proposed

termination or substantial reduction of

major defense programs. The final rule

differs from the interim rule in that it

makes clarifying revisions at DFARS

249.7003(b)(1) and 252.249–7002(c)(1),

and changes the notification periods at

249.7003(b) (2) and (3) from 90 days to

60 days, as required by Section 1142 of

Pub. L. 103–337.

Item XXXIX—Government Supply

Sources

This final rule amends DFARS

251.102, adds a new section at 251.105,

and amends the clause at 252.251–7000

to clarify that, when a contractor is

authorized to use Government supply

sources (1) Payments to the Government

for such supplies are due within 30 days

of the Government’s invoice; (2)

contractors must pay interest on late

payments to the Government; and (3) a

contractor’s failure to pay may result in

loss of authorization to use Government

supply sources.

Item XL—Editorials

(Note: The asterisked items are revisions

being made only in the looseleaf edition of

DFARS.)

(a) The definition of ‘‘contracting

activity’’ at DFARS Section 202.101 is

amended to update the contracting

activity names that appear under the

NAVY heading.

(b) The definition of ‘‘contracting

activity’’ at DFARS Section 202.101 is

amended by adding under the heading

United States Special Operations

Command and after the word

‘‘Headquarters,’’ the words ‘‘United

States Special Operations Command’’

that were inadvertently removed in DAC

91–6.

(c) DFARS 203.502—2 is amended by

revising paragraph (h)(ii) to read ‘‘Naval

Criminal Investigative Service.’’

*(d) DFARS 204.7202–2(b)(2)(iii)(B) to

amended to revise ‘‘Nay’’ to read

‘‘Navy.’’

(e) DFARS 206.302–5(c)(i)(B) is

amended to revise the parenthetical

reference ‘‘(Acquisition)’’ to read

‘‘(Acquisition & Technology).’’

*(f) DFARS 215.804–3(b)(1)(B)(3) is

amended to revise ‘‘submisson’’ to read

‘‘submission.’’

(g) DFARS 225.603(b)(i)(D) and (b)(ii)

are amended to revise the address for

DCMAO, New York.

*(h) DFARS 225.872–5(a) is amended

to revise ‘‘bee’’ to read ‘‘been.’’

(i) DFARS 225.872–5(a) is amended to

reflect the correct title of the Deputy

Director of Defense Procurement

(Foreign Contracting).

(j) DFARS 225.872–6(b) is amended to

reflect the correct title of the Deputy

Director of Defense Procurement

(Foreign Contracting).

*(k) DFARS 225.7001(c) is amended

to revise ‘‘speciality’’ to read

‘‘specialty.’’

*(l) DFARS Table of Contents for

section 226.71 is amended to revise the

title to read: ‘‘Preference for Local and

Small Businesses.’’

*(m) DFARS Table of Contents for

section 232 is amended to reflect the

proper sequence of Subparts 232.7 and

232.8.

(n) DFARS 232.108(1)(i) is revised to

update the Army finance office

designation.

(o) DFARS 235.006(b)(i)(C)(1)(iii) is

revised to clarify the references to

applicable statutes.

(p) DFARS 235.015–70(d)(3)(ii) is

amended by revising the word ‘‘which’’

to read ‘‘who.’’

(q) DFARS 237.7302 is amended to

revise the reference ‘‘10 U.S.C.

2304(a)(i)’’ to read ‘‘10 U.S.C.

2304(a)(1).’’

*(r) DFARS 252 Table of Contents is

amended to revise the title for clause

number 252.225–7018.

(s) DFARS 252.225–7009(f)(2)(iv) is

amended to revise the address for

DCMAO, New York.

(t) DFARS 252.225–7010(e) is

amended to revise the address for

DCMAO, New York.

(u) DFARS 252.225–7037(f)(2)(iv) is

amended to revise the address for

DCMAO, New York.

*(v) DFARS 253 is amended to update

DD Form 879, DD Form 1155 and DD

Form 1155C–1.

*(w) DFARS 253 is amended to delete

the following obsolete forms: DD Form

1114, DD Form 1568, DD Form 1592,

and DD Form 2025. DD Form 1568 has

been replaced by Standard form 1146.

The other forms have no replacement.

Interim Rules Adopted as Final

Without Changes

PARTS 209 AND 252—[AMENDED]

The interim rule that was published at

59 FR 51130 on October 7, 1994, is

adopted as final without change.

PARTS 219, 226, AND 252—

[AMENDED]

The interim rule that was published

as Item XLVII of DAC 91–6 at 59 FR

27662 on May 27, 1994, is adopted as

final without change.

PART 231—[AMENDED]

The interim rule that was published at

59 FR 26143 on May 19, 1994, is

adopted as final without change.

PART 247—[AMENDED]

The interim rule that was published at

59 FR 50851 on October 6, 1994, is

adopted as final without change.

Interim Rules Adopted as Final With

Changes

PARTS 206, 222, 226, 237, AND 252—

[AMENDED]

The interim rule that was published at

59 FR 36088 on July 15, 1994 is adopted

as final with minor editorial

amendments at sections 226.7200(a),

237.7400, 237.7401, 237.7402, and with

the addition of 237.7401(d).

PARTS 219 AND 226—[AMENDED]

The interim rule that was published at

59 FR 12191 on March 16, 1994, as

corrected at 59 FR 15501 on April 1,

1994, is adopted as final with

amendments at sections 226.7101 and

226.7103.
Federal Register / Vol. 60, No. 107 / Monday, June 5, 1995 / Rules and Regulations 29497

PARTS 219 AND 252—[AMENDED]

The interim rule that was published at

59 FR 24958 on May 13, 1994, is

adopted as final with revisions at

219.502–2–70, 252.219–7001, 252.219–

7002, and 252.219–7006.

PARTS 225 AND 252—[AMENDED]

The interim rule that was published at

59 FR 1288 on January 10, 1994, as

corrected at 59 FR 8041 on February 17,

1994 and at 59 FR 39974 on August 5,

1994, is adopted as final with

amendments at sections 225.408,

252.225–7035, and 252.225–7036.

PARTS 225 AND 252—[AMENDED]

The interim rule that was published

as Item XLIV of DAC 91–6 at 59 FR

11729 on March 14, 1994, as corrected

at 59 FR 38931 on August 1, 1994, is

adopted as final with amendments at

sections 225.7021–1 and 225.7021–3.

PARTS 225 AND 252—[AMENDED]

The interim rule that was published

as Item XLVI of DAC 91–6 at 59 FR

19146 on April 22, 1994, is adopted as

final with amendments at section

225.7022–1.

PARTS 225, 252, AND 253—

[AMENDED]

The interim rule that was published a

Item XXIX of DAC 91–5 at 58 FR 28458

on May 13, 1993, is adopted as final

with amendments at 225.7202 and

252.225–7026. In addition, DD Form

2139 is reinstated with a new title and

revised.

PARTS 247 AND 252—[AMENDED]

The interim rule was published as

Item XLIV of DAC 91–6 at 59 FR 27662

on May 27, 1994, is adopted as final

with amendments at 247.571, 247.573,

and 252.247–7025.

PARTS 249 AND 252—[AMENDED]

The interim rule that was published

as Item XXXVIII of DAC 91–6 at 59 FR

27662 on May 27, 1994, is adopted as

final with amendments at 249.7003 and

252.249–7002.

List of Subjects in 48 CFR Parts 202,

203, 206, 207, 209, 215, 217, 219, 225,

226, 228, 231, 232, 235, 237, 242, 244,

245, 247, 249, 251, 252, 253, and

Appendix C to Chapter 2

Government procurement.

Amendments to 48 CFR Chapter 2

(Defense Far Supplement)

48 CFR Chapter 2 (the Defense FAR

Supplement) is amended as set forth

below.

1. The authority for 48 CFR parts 202,

203, 206, 207, 209, 215, 217, 291, 225,

226, 228, 231, 232, 235, 237, 242, 244,

245, 247, 249, 251, 252, 253, and

Appendix C to Chapter 2 is revised to

read as follows:

Authority: 41 U.S.C. 421 and 48 CFR

Chapter 1.

PART 202—DEFINITIONS OF WORDS

AND TERMS

202.101 [Amended]

2. Section 202.101 is amended by

revising in the definition entitled

Contracting activity under the heading

Navy, the entry ‘‘Deputate, Acquisition

Policy, Integrity and Accountability,

Office of the Assistant Secretary of the

Navy (Research, Development, and

Acquisition)’’ to read ‘‘Deputy,

Acquisition Policy, Integrity and

Accountability, Office of the Assistant

Secretary of the Navy (Research,

Development, and Acquisition)’’.

PART 203—IMPROPER BUSINESS

PRACTICES AND PERSONAL

CONFLICTS OF INTEREST

203.502–2 [Amended]

3. Section 203.502–2 is amended by

revising in paragraph (h)(ii) the phrase

‘‘Naval Investigative Service’’ to read

‘‘Naval Criminal Investigative Service.’’

PART 206—COMPETITION

REQUIREMENTS

206.302–5 [Amended]

4. Section 206.302–5 is amended by

revising in paragraph (c)(i)(B) the phrase

‘‘Office of the Under Secretary of

Defense for Acquisition’’ to read ‘‘Office

of the Under Secretary of Defense

(Acquisition & Technology).’’

5. Section 206.304 is amended by

revising paragraphs (a)(4)(A)(2) and

(a)(4)(B) to read as follows:

206.304 Approval of the justification.

(a)(4)(A) * * *

(1) * * *

(2) In the case of the Under Secretary

of Defense (Acquisition & Technology)

(USD(A&T)), to—

* * * * *

(B) For proposed contracts over $50

million, this authority is not delegable,

except in the case of the USD(A&T) who

may delegate as specified in paragraph

(a)(4)(A)(2) of this section.

PART 207—ACQUISITION PLANNING

207.105 [Amended]

6. Section 207.105 is amended by

removing paragraph (b)(2)(v).

PART 209—CONTRACTOR

QUALIFICATIONS

209.103 [Amended]

7. Section 209.103(a)(i)(c) is amended

by revising the reference ‘‘Under

Secretary of Defense (Acquisition)’’ to

read ‘‘Under Secretary of Defense

(Acquisition & Technology).’’

8. Section 209.104–1 is amended by

revising paragraph (e) to read as follows:

209.104–1 General standards.

(e) For cost-reimbursement or

incentive type contracts, or contracts

which provide for progress payments

based on costs or on a percentage or

stage of completion, the prospective

contractor’s accounting system and

related internal controls must provide

reasonable assurance that—

(i) Applicable laws and regulations

are complied with;

(ii) The accounting system and cost

data are reliable;

(iii) Risk of misallocations and

mischarges are minimized; and

(iv) Contract allocations and charges

are consistent with invoice procedures.

* * * * *

9. Section 209.405–1 is added to read

as follows:

209.405–1 Continuation of current

contracts.

(a) Unless the agency head makes a

written determination that a compelling

reason exists to do so, ordering activities

shall not—

(i) Place orders exceeding the

guaranteed minimum under indefinite

quantity contracts: or

(ii) When the agency is an optional

user, place orders against Federal

Supply Schedule contracts.

(b) This includes exercise of options.

PART 215—CONTRACTING BY

NEGOTIATION

10. Section 215.806–1 is amended by

revising paragraph (a)(1) to read as

follows:

215.806–1 General.

* * * * *

(a)(1) Contractor and subcontractor

proposals may reflect the selection of

sources whose proposals offer the

greatest value to the Government in

terms of performance and other factors.

If the selection is based on greatest

value rather than lowest price, the

analysis supporting subcontractor
29498 Federal Register / Vol. 60, No. 107 / Monday, June 5, 1995 / Rules and Regulations

selection should include a discussion of

the factors considered in the selection

(see also FAR 15.605(c) and 215.605(c)).

If the contractor’s analysis is not

adequate, return it for correction of

deficiencies.

* * * * *

PART 217—SPECIAL CONTRACTING

METHODS

11. Section 217.7404–3 is amended by

revising paragraph (a)(2) to read as

follows:

217.7404–3 Definitization schedule.

(a) * * *

(1) * * *

(2) The date on which the amount of

funds obligated under the contract

action is equal to more than 50 percent

of the not-to-exceed price.

* * * * *

12. Section 217.7404–4 is revised to

read as follows:

217.7404–4 Limitations on obligations.

The Government shall not obligate

more than 50 percent of the not-toexceed price before definitization.

However, if a contractor submits a

qualifying proposal before 50 percent of

the not-to-exceed price has been

obligated by the Government, then the

limitation on obligations before

definitization may be increased to no

more than 75 percent (see 232.102–70

for coverage on provisional delivery

payments).

13. Section 217.7404–5 is revised to

read as follows:

217.7404–5 Exceptions.

(a) The limitations in 217.7404–2,

217.7404–3, and 217.7404–4 do not

apply to UCAs for the purchase of initial

spares.

(b) The head of an agency may waive

the limitations in 217.7404–2,

217.7404–3, and 217.7404–4 for UCAs if

the head of the agency determines that

the waiver is necessary to support a

contingency operation.

PART 219—SMALL BUSINESS AND

SMALL DISADVANTAGED BUSINESS

CONCERNS

14. Section 219.502–2–70 is amended

by revising paragraph (a)(1)(ii) to read as

follows:

219.502–2–70 Total set-asides for small

disadvantaged business concerns.

(a) * * *

(1) * * *

(i) * * *

(ii) In the case of an SDB regular

dealer owned by an Indian tribe,

including an Alaska Native Corporation,

will provide the supplies of a small

business for contracts awarded during

fiscal years 1994 and 1995, as provided

in Section 8051 of Pub. L. 103–139 and

Section 8012 of Pub. L. 103–335; or,

* * * * *

PART 225—BUY AMERICAN ACT—

CONSTRUCTION MATERIALS

15. Section 225.408 is amended by

revising paragraph (a)(4)(B) to read as

follows:

225.408 Solicitation provision and

contract clause.

(a)(1) * * *

* * * * *

(4)(A) * * *

(B)(i) Use the clause in all

solicitations and contracts for the items

listed at 225.403–70, when the

estimated value is $50,000 or more and

the Trade Agreements Act does not

apply. Include the clause in solicitations

for multiple line items if any line item

is subject to NAFTA.

(ii) Use the clause with its Alternate

I when the estimated value is between

$25,000 and $50,000.

* * * * *

225.603 [Amended]

16. Section 225.603 is amended in

paragraph (b)(i)(D) by revising the

phrase ‘‘Commander, DCMAO New

York, ATTN: Customs Division,

International Logistics Office, 201

Varick Street, New York, NY 10014—’’

to read ‘‘Commander, DCMAO New

York, ATTN Customs Team, DCMDN–

GNIC, 207 New York Avenue, Staten

Island, NY 10305–5013—’’.

225.603 [Amended]

17. Section 225.603 is amended in

paragraph (b)(ii) by revising the phrase

‘‘Chief, Customs Division, International

Logistics Office, DCMAO New York’’ to

read ‘‘Customs Team, DCMDN–GNIC,

DCMAO New York’’.

225.872–5 [Amended]

18. Section 225.872–5(a) is amended

by revising ‘‘Foreign Contracting

Directorate, Office of the Director of

Defense Procurement’’ to read ‘‘Deputy

Director of Defense Procurement

(Foreign Contracting).’’

225.872–6 [Amended]

19. Section 225.872–6(b) is amended

by revising ‘‘Foreign Contracting

Directorate, Office of the Director of

Defense Procurement’’ to read ‘‘Deputy

Director of Defense Procurement

(Foreign Contracting).’’

20. Section 225.7004–2 is amended by

revising paragraph (b) to read as follows:

225.7004–2 Applicability.

* * * * *

(b) Machine tool accessories classified

under FSC 3460 or 3461 are not

components under 225.7004–5. Where a

solicitation for machine tools includes

machine tool accessories, list known

machine tool accessories which are not

separate line items in the provision at

252.225–7040, Machine Tool List.

Identify accessories which are separate

line items in the schedule. The

contracting activity must exercise

judgment in determining whether an

item is an accessory or a component.

This determination should be based on

the use of the item in the machine tool

being purchased.

* * * * *

21. Section 225.7004–6 is amended by

adding paragraph (c) to read as follows:

225.7004–6 Contract clauses.

* * * * *

(c) Use the provision at 252.225–7040,

Machine Tool List, in all solicitations

for machine tools which contain the

clause at 252.225–7017 except where—

(1) All machine tool accessories are

listed as separate line items; and

(2) The solicitation does not allow

offerors to provide accessories which

are not specifically required by the

specifications.

22. Section 225.7021–1 is revised to

read as follows:

225.7021–1 Restriction.

In accordance with Section 8090 of

the Fiscal Year 1994 Defense

Appropriations Act (Pub. L. 103–139)

and Section 8075 of the Fiscal Year

1995 Defense Appropriations Act (Pub.

L. 103–335), do not purchase aircraft

fuel cells unless they are produced or

manufactured in the United States by a

domestic-operated entity.

23. Section 225.7021–3 is revised to

read as follows:

225.7021–3 Contract clause.

Unless a waiver has been granted in

accordance with 225.7021–2, use the

clause at 252.225–7038, Restriction on

Acquisition of Aircraft Fuel Cells, in all

solicitations and contracts which—

(a) Use fiscal year 1994 or 1995 funds;

and

(b) Require delivery of aircraft fuel

cells.

24. Section 225.7022–1 is revised to

read as follows:

225.7022–1 Restriction.

In accordance with Section 8124 of

the Fiscal Year 1994 Defense

Appropriations Act (Pub. L. 103–139)

and Section 8093 of the Fiscal Year

1995 Defense Appropriations Act (Pub.
Federal Register / Vol. 60, No. 107 / Monday, June 5, 1995 / Rules and Regulations 29499

L. 103–335), do not purchase a totally

enclosed lifeboat survival system, which

consists of the lifeboat and associated

davits and winches, unless 50 percent

or more of the components are

manufactured in the United States, and

50 percent or more of the labor in the

final manufacture and assembly of the

entire system is performed in the United

States.

25. Section 225.7202 is amended by

revising ‘‘OUSD(A)DP(FC)’’ to read

‘‘OUSD(A&T)DP(FC).’’

PART 226—OTHER SOCIOECONOMIC

PROGRAMS

26–28. Section 226.7101 is revised to

read as follows:

226.7101 Definition.

Vicinity, as used in this subpart,

means the county or counties in which

the military installation to be closed or

realigned is located and all adjacent

counties, unless otherwise defined by

the agency head.

29. Section 226.7103 is revised to read

as follows:

226.7103 Procedure.

In considering acquisitions for award

through the section 8(a) program

(subpart 219.8 and FAR subpart 19.8) or

in making set-aside decisions under

subpart 219.5 and FAR subpart 19.5 for

acquisitions in support of a base closure

or realignment, the contracting officer

shall—

(a) Determine whether there is a

reasonable expectation that offers will

be received from responsible business

concerns located in the vicinity of the

military installation that is being closed

or realigned.

(b) If offers can not be expected from

business concerns in the vicinity,

proceed with section 8(a) or set-aside

consideration as otherwise indicated in

part 219 and FAR part 19.

(c) If offers can be expected from

business concerns in the vicinity—

(1) Consider section 8(a) only if the

8(a) contractor is located in the vicinity.

(2) Set aside the acquisition for small

disadvantaged business only if one of

the expected offers is from a small

disadvantaged business located in the

vicinity.

(3) Set aside the acquisition for small

business only if one of the expected

offers is from a small business located

in the vicinity.

226.7200 [Amended]

30 and 31. Section 226.7200 is

amended by revising in paragraph (a)

the word ‘‘established’’ to read

‘‘establishes.’’

PART 228—BONDS AND INSURANCE

32. Section 228.102–1 is amended by

revising the introductory paragraph to

read as follows:

228.102–1 General.

For Defense Environmental

Restoration Program construction

contracts entered into pursuant to 10

U.S.C. 2701 and executed between

December 5, 1991, and December 31,

1999—

* * * * *

PART 231—CONTRACT COST

PRINCIPLES AND PROCEDURES

231.205–70 [Amended]

33. Section 231.205–70(b)(4) is

amended to revise in the second

sentence the word ‘‘repositioning’’ to

read ‘‘repositionings.’’

231.703 [Amended]

34. Section 231.703 is amended to

revise in paragraph (1) the reference

‘‘231.603(a)’’ to read ‘‘231.603(1).’’

PART 232—CONTRACT FINANCING

232.108 [Amended]

35. Section 232.108 is amended by

revising in paragraph (1)(i) the phrase

‘‘Army—Chief of Contract Financing,

Office of the Comptroller’’ to read

‘‘Army—Office, Assistant Secretary of

the Army (Financial Management)’’.

36. Section 232.503–6 is amended by

adding a new paragraph (b) to read as

follows:

232.503–6 Suspension or reduction of

payments.

(b) Contractor noncompliance.

See also 242.7503.

* * * * *

PART 235—RESEARCH AND

DEVELOPMENT CONTRACTING

37. Section 235.001 is revised to read

as follows:

235.001 Definitions.

The following terms are defined in

DoD 7000.14–R, Financial Management

Regulation. As used in this part—

Advanced development means all

effort directed toward projects which

have moved into the development of

hardware for test. The prime proof of

this type of effort is proof of design

concept rather than the development of

hardware. Projects in this category have

a potential military application.

Basic research means all effort of

scientific study and experimentation

directed toward increasing knowledge

and understanding in those fields of the

physical, engineering, environmental,

and life sciences related to long-term

national security needs, It provides

fundamental knowledge required for the

solution of military problems. It forms a

part of the base for—

(1) Subsequent exploratory and

advanced developments in defense

related technologies; and

(2) New or improved military

functional capabilities in areas such as

communications, detection, tracking,

surveillance, propulsion, mobility,

guidance and control, navigation,

energy conversion, materials and

structures, and personnel support.

Demonstration/validation means

those efforts necessary to evaluate

integrated technologies in as realistic an

operating environment as possible to

assess the performance or cost reduction

potential of advanced technology. The

demonstration/validation phase is

system specific and also includes

advanced technology demonstrations

that help expedite technology transition

from the laboratory to operational use.

Engineering and manufacturing

development means those projects in

full-scale engineering development but

which have not yet received approval

for production or had production funds

included in the DoD budget submission

for the budget or subsequent fiscal year.

This area is characterized by major line

item projects where program control is

exercised by review of individual

projects.

Exploratory development means all

effort directed toward the solution of

specific military problems, short of

major development projects. This type

of effort may vary from fairly

fundamental applied research to quite

sophisticated bread-board hardware,

study, programming, and planning

efforts. It would thus include studies,

investigations, and minor development

effort. The dominant characteristic of

this category of effort is that it be

pointed toward specific military

problem areas with a view toward

developing and evaluating the

feasibility and practicability of proposed

solutions and determining their

parameters.

Management and support means all

effort directed toward support of

installations and operations required for

general research and development use.

This includes military construction of a

general nature unrelated to specific

programs, maintenance support of

laboratories, operation and maintenance

of test ranges, and maintenance of test

aircraft and ships. Costs of laboratory

personnel, either in-house or contracted,

would be assigned to projects or as a

line item in the research, exploratory

development, or advanced development
29500 Federal Register / Vol. 60, No. 107 / Monday, June 5, 1995 / Rules and Regulations

program areas, as appropriate.

Management and support is not

‘‘research and development’’ except in

exceptional cases. For example,

construction of recreational facilities at

an installation is not ‘‘research and

development’’ work, even if the

installation is used only for research

and development work.

Operational system development

means those projects still in full-scale

engineering development, but which

have received approval for production

through Defense Acquisition Board or

other action, or production funds have

been included in the DoD budget

submission for the budget or subsequent

year. All items in this area are major

line item projects which appear as

RDT&E costs of weapons systems

elements in other programs. Program

control is exercised by review of the

individual projects.

Research and development ordinarily

covers only the following categories—

(1) Basic research;

(2) Exploratory development;

(3) Advanced development;

(4) Demonstration/validation;

(5) Engineering and manufacturing

development; and

(6) Operational system development.

38. Section 235.006 is amended by

revising paragraph (b)(i)(C)(1)(iii) to read

as follows:

235.006 Contracting methods and contract

type.

* * * * *

(b)(i) * * *

(C) * * *

(1) * * *

(iii) The development of a major

system (as defined in FAR 34.001) or

subsystem thereof, it the contract is over

$25 million, or is over $10 million and

is funded with FY90 funds (Pub. L. 101–

165, Section 9048), FY91 funds (Pub. L.

101–511, Section 8038), FY92 funds

(Pub. L. 102–172, Section 8037), or

FY93 funds (Pub. L. 102–396, Section

9037).

* * * * *

39. Section 235.010 is revised to read

as follows:

235.010 Scientific and technical reports.

(b) The Defense Technical

Information Center (DTIC) is responsible

for collecting all scientific or

technological observations, findings,

recommendations, and results derived

from DoD endeavors, including both inhouse and contracted efforts. The DTIC

has eligibility and registration

requirements for use of its services.

Requests for eligibility and registration

information should be addressed to

DTIC–BCS, Cameron Station,

Alexandria, VA 22304–6145.

235.015–70 [Amended]

40. Section 235.015–70(d)(3)(ii) is

amended by revising the second

occurrence of the word ‘‘which’’ to read

‘‘who.’’

41. Section 235.071 is amended by

adding paragraphs (c) and (d) to read as

follows:

235.071 Additional contract clauses.

(a) * * *

(b) * * *

(c) Use the clause at 252.235–7010,

Acknowledgement of Support and

Disclaimer, in solicitations and

contracts for research and development.

(d) Use the clause at 252.235–7011,

Final Scientific or Technical Report, in

solicitations and contracts for research

and development.

42. Section 235.017–1 is added to

read as follows:

235.017–1 Sponsoring agreements.

(c)(4) DoD-sponsored FFRDCs that

function primarily as research

laboratories may respond to solicitations

and announcements for programs which

promote research, development,

demonstration, or transfer of technology

(Section 217, Pub. L. 103–337).

PART 237—SERVICE CONTRACTING

237.7302 [Amended]

43. Section 237.7302 is amended by

revising in the last sentence the

reference ‘‘10 U.S.C. 2304(a)(i)’’ to read

‘‘10 U.S.C. 2304(a)(1).’’

237.7400 [Amended]

44. Section 237.7400 is amended by

revising the reference ‘‘(Pub. L. 100–

536)’’ to read ‘‘(Pub. L. 100–526).’’

45. Section 237.7401 is amended in

paragraph (c) by revising ‘‘govenrment’’

to read ‘‘government;’’ by revising the

word ‘‘is’’ to read ‘‘are’’; and by adding

a new paragraph (d) to read as follows:

237.7401 Policy.

* * * * *

(d) Includes the requirement of

subpart 222.71, Right of First Refusal of

Employment, unless it conflicts with the

local government’s civil service

selection procedures.

237.7402 [Amended]

46. Section 237.7402 is amended by

revising the word ‘‘subject’’ to read

‘‘subpart.’’

PART 242—CONTRACT

ADMINISTRATION

47. Section 242.302 is amended by

adding a new paragraph (a)(7) to read as

follows:

242.302 Contract administration functions.

(a)(4) * * *

(7) See 242.7503 for ACO

responsibilities with regard to receipt of

an audit report identifying significant

accounting system or related internal

control deficiencies.

* * * * *

48. Section 242.1104 is revised to read

as follows:

242.1104 Surveillance requirements.

(a)(i) As a minimum, contracts will

receive pre-delivery telephonic

surveillance.

(ii) Contracts in the following

categories will receive pre-delivery onsite production surveillance:

(A) Contracts assigned criticality

designator A (see FAR 42.1105).

(B) Contracts specifically identified

for special surveillance by the

contracting officer.

(C) Any contract where telephonic

surveillance reveals actual or

anticipated delinquency unless the

contract administration office, in

coordination with the contracting

officer, decides that on-site surveillance

is not warranted.

49. Section 242.7302 is amended by

revising paragraph (a) and by adding

paragraph (d) to read as follows:

242.7302 Requirements.

(a) A CIPR shall be conducted for each

contractor whose qualifying sales to the

Government exceeded $40 million

during the contractor’s preceding fiscal

year. Qualifying sales are sales for

which certified cost or pricing data were

required under 10 U.S.C. 2306, as

implemented in FAR 15.804 (unless

exempt in accordance with FAR 15.804–

3), or which are cost-reimbursement

type contracts. Sales include prime

contracts, subcontracts, and

modifications to such contracts and

subcontracts.

* * * * *

(d) Reviews of selected insurance and

pension elements may be conducted for

contractors not meeting the criteria in

paragraph (a) of this section if

significant problems have been

identified.

50. A new subpart 242.75 is added to

read as follows:

Sec.

242.7500 Scope of subpart.

242.7501 Definition.

242.7502 Policy.

242.7503 Procedures.

Subpart 242.75—Contractor

Accounting Systems and Related

Controls

242.7500 Scope of subpart.

This subpart provides policies and

procedures applicable to contractor
Federal Register / Vol. 60, No. 107 / Monday, June 5, 1995 / Rules and Regulations 29501

accounting systems and related internal

controls.

242.7501 Definition.

Internal controls means those policies

and procedures established by

contractor management to provide

reasonable assurance that applicable

laws and regulations are complied with

and that actual and estimated costs are

equitably allocated within the

accounting system.

242.7502 Policy.

Contractors receiving costreimbursement or incentive type

contracts, or contracts which provide for

progress payments based on costs or on

a percentage or stage of completion,

shall maintain an accounting system

and related internal controls throughout

contract performance which provide

reasonable assurance that—

(a) Applicable laws and regulations

are complied with;

(b) The accounting system and cost

data are reliable;

(c) Risk of misallocations and

mischarges are minimized; and

(d) Contract allocations and charges

are consistent with invoice procedures.

242.7503 Procedures.

(a) Upon receipt of an audit report

identifying significant accounting

system or related internal control

deficiencies, the ACO will—

(1) Provide a copy of the report to the

contractor and allow 30 days, or a

reasonable extension, for the contractor

to respond;

(2) If the contractor agrees with the

report, the contractor has 60 days from

the date of initial notification to correct

any identified deficiencies or submit a

corrective action plan showing

milestones and actions to eliminate the

deficiencies.

(3) If the contractor disagrees, the

contractor should provide rationale in

its written response.

(4) The ACO will consider whether it

is appropriate to suspend a percentage

of progress payments or reimbursement

of costs proportionate to the estimated

cost risk to the Government, considering

audit reports or other relevant input,

until the contractor submits a corrective

action plan acceptable to the ACO and

corrects the deficiencies. (See FAR

32.503–6 (a) and (b) and FAR

42.302(a)(7)).

PART 244—SUBCONTRACTING

POLICIES AND PROCEDURES

51. Subpart 244.2 is added to read as

follows:

244.2 Consent to subcontracts.

Sec.

244.202 Contracting officer’s evaluation.

244.202–2 Considerations.

242.2 Consent to subcontracts.

244.202 Contracting officer’s evaluation.

244.202–2 Considerations.

(a) Where other than lowest price is

the basis for subcontractor selection, has

the contractor adequately substantiated

the selection as offering the greatest

value to the Government?

PART 245—GOVERNMENT PROPERTY

52. Section 245.608–70 is amended by

revising paragraph (a)(3) to read as

follows:

245.608–70 Contractor inventory

redistribution system (CIRS).

(a) * * *

(3) Has a line item acquisition value

in excess of $1,000 ($500 for furniture)

but no national stock number.

* * * * *

PART 247—TRANSPORTATION

53. Section 247.305–70 is revised to

read as follows:

247.305–70 Returnable containers other

than cylinders.

Use the clause at 252.247–7021,

Returnable Containers Other Than

Cylinders, in solicitations and contracts

for supplies involving contractorfurnished returnable reels, spools,

drums, carboys, liquid petroleum gas

containers, or other returnable

containers if the contractor is to retain

title to the containers.

54. Section 247.571 is amended by

revising paragraph (c); by removing

paragraph (d); and by redesignating

paragraph (e) as paragraph (d) to read as

follows:

247.571 Policy.

* * * * *

(c)(1) Any vessel used under a time

charter contract for the transportation of

supplies shall have any reflagging or

repair work, as defined in the clause at

252.247–7205, Reflagging or Repair

Work, performed in the United States or

its territories, if the reflagging or repair

work is performed—

(i) On a vessel for which the

contractor submitted an offer in

response to the solicitation for the

contract; and

(ii) Prior to acceptance of the vessel

by the Government.

(2) The Secretary of Defense may

waive this requirement if the Secretary

determines that such waiver is critical

to the national security of the United

States.

* * * * *

55. Section 247.573 is amended by

revising paragraph (d) to read as

follows:

247.573 Solicitation provision and

contract clauses.

* * * * *

(d) Use the clause at 252.247–7025,

Reflagging or Repair Work, in all time

charter solicitations and contracts for

the use of a vessel for the transportation

of supplies, unless a waiver has been

granted in accordance with 247.571(c).

PART 249—TERMINATION OF

CONTRACTS

249.7003 [Amended]

56. Section 249.7003 is amended by

inserting in paragraph (b)(1) the word

‘‘major’’ between the words ‘‘which’’

and ‘‘defense;’’ by revising in paragraph

(d)(2) introductory text the number ‘‘90’’

to read ‘‘60;’’ by revising in paragraph

(b)(3) introductory text the number ‘‘90’’

to read ‘‘60;’’ and by removing in

paragraph (b)(3) introductory text the

word ‘‘provided.’’

PART 251—USE OF GOVERNMENT

SOURCES BY CONTRACTORS

57. Section 251.102 is amended to

revise paragraph (e) introductory text

and to add a new paragraph (f) to read

as follows:

251.102 Authorization to use Government

supply sources.

(e) Use the format in Table 51–1,

Authorization to Purchase from

Government Supply Sources. Specify

the terms of the purchase, including

contractor acceptance of any

Government materiel, payment terms,

and the addresses required by paragraph

(f) of the clause at 252.251–7000,

Ordering from Government Supply

Sources.

* * * * *

(f) The authorizing agency shall also

be responsible for promptly considering

requests of the DoD supply source for

authority to refuse to honor requisitions

from a contractor which is indebted to

the DoD and has failed to pay proper

invoices in a timely manner.

* * * * *

58. Section 251.105 is added to read

as follows:

251.105 Payment for shipments.

Contractor payments for purchases

from DoD supply sources are due within

30 days of the date of a proper invoice

(see FAR 32.902 for definition of ‘‘due
29502 Federal Register / Vol. 60, No. 107 / Monday, June 5, 1995 / Rules and Regulations

date’’ and ‘‘payment date;’’ also see FAR

32.905(e)).

PART 252—SOLICITATION

PROVISIONS AND CONTRACT

CLAUSES

252.209–7004 [Amended]

59. and 60. Section 252.209–7004 is

amended by revising in paragraph (b)(5)

the symbol ‘‘PDUSD(A&T)(DPFC)’’ to

read ‘‘OUSD(A&T)DP(FC).’’

61. Section 252.219–7001 is amended

by revising the clause date ‘‘(May

1994)’’ ‘‘(May 1995)’’; and by revising

paragraph (f)(2) to read as follows:

252.219–7001 Notice of partial small

business set-aside with preferential

consideration for small disadvantaged

business concerns.

* * * * *

(f) * * *

(2) A manufacturer or regular dealer, which

claims preference as a small disadvantaged

business and submits an offer in its own

name, agrees to furnish in performing this

contract only end items manufactured or

produced by small disadvantaged business

concerns in the United States, except, as

provided in Section 8051 of Pub. L. 103–139

and Section 8012 of Pub. L. 103–335, for

contracts awarded during fiscal years 1994

and 1995, a small disadvantaged business

manufacturer or regular dealer owned by an

Indian tribe, including an Alaska Native

Corporation, agrees to furnish only end items

manufactured or produced by small business

concerns in the United States.

* * * * *

62. Section 252.219–7002 is amended

by revising the clause date ‘‘(MAY

1994)’’ to read ‘‘(MAY 1995)’’; and by

revising paragraph (c) to read as follows:

252.219–7002 Notice of small

disadvantaged business set-aside.

* * * * *

(c) Agreement.

A small disadvantaged business

manufacturer or regular dealer, submitting an

offer in its own name, agrees to furnish in

performing this contract only end items

manufactured or produced by small

disadvantaged business concerns in the

United States, except, as provided in Section

8051 of Pub. L. 103–139 and Section 8012 of

Pub. L. 103–335, for contracts awarded

during fiscal years 1994 and 1995, a small

disadvantaged business manufacturer or

regular dealer owned by an Indian tribe,

including an Alaska Native Corporation,

agrees to furnish only end items

manufactured or produced by small business

concerns in the United States.

* * * * *

63. Section 252.219–7006 is amended

by revising the clause date ‘‘(MAY

1994)’’ to read ‘‘(MAY 1995)’’; and by

revising paragraph (d)(2) to read as

follows:

252.219–7006 Notice of evaluation

preference for small disadvantaged

business concerns.

* * * * *

(d) * * *

(2) A small disadvantaged business,

historically black college or university, or

minority institution regular dealer submitting

an offer in its own name agrees to furnish in

performing this contract only end items

manufactured or produced by small

disadvantaged business concerns, historically

black colleges or universities, or minority

institutions in the United States, except, as

provided in Section 8051 of Pub. L. 103–139

and Section 8012 of Pub. L. 103–335, for

contracts awarded during fiscal years 1994

and 1995, a small disadvantaged business

manufacturer or regular dealer owned by an

Indian tribe, including an Alaska Native

Corporation, agrees to furnish only end items

manufactured or produced by small business

concerns in the United States.

* * * * *

252.225–7009 [Amended]

64. Section 252.225–7009 is amended

to revise in paragraph (f)(2)(iv) the

phrase ‘‘Customs Division, International

Logistics Office, 201 Varick Street, New

York, New York 10014’’ to read

‘‘Customs Team, DCMDN–GNIC, 207

New York Avenue, Staten Island, New

York, 10305–5013.’’

252.225–7010 [Amended]

65. Section 252.225–7010 is amended

to revise in paragraph (e) introductory

text the phrase ‘‘Chief, Customs

Division, International Logistics Office,

201 Varick Street, New York, New York

10014’’ to read ‘‘Customs Team,

DCMDN–GNIC, 207 New York Avenue,

Staten Island, New York, 10305–5013.’’

66. Section 252.225–7026 is amended

by revising the clause date ‘‘(APR

1993)’’ to read ‘‘(MAY 1995)’’; by

revising paragraph (b)(3); by adding a

new paragraph (b)(4); and by revising

paragraph (d) to read as follows:

252.225–7026 Reporting of contract

performance outside the United States.

* * * * *

(b) * * *

(1) * * *

(2) * * *

(3) The Contractor shall submit reports

required by paragraph (a)(3) of this clause

within 10 days of the end of each

Government quarter to—Deputy Director of

Defense Procurement (Foreign Contracting)

OUSD(A&T)DP(FC) Washington, DC 20301–

3060

(4) The Offeror/Contractor shall submit

reports on DD Form 2139, Report of Contract

Performance Outside the United States.

Computer-generated reports are acceptable,

provided the report contains all information

required by DD Form 2139. Copies of DD

Form 2139 may be obtained from the

Contracting Officer.

(c) * * *

(d) Information required.

Information to be reported on the part of

this contract performed outside the United

States (or outside the United States and

Canada for reports required by paragraphs

(a)(1) and (a)(2) of this clause) includes that

for—

(i) Subcontracts;

(ii) Purchases; and

(iii) Intracompany transfers when transfers

originate in a foreign location.

67. Section 252.225–7035 is amended

by revising the clause date ‘‘(JAN 1994)’’

read ‘‘(MAY 1995)’’; and by revising

paragraph (c)(2)(ii) to read as follows:

252.225–7035 Buy American Act—North

American Free Trade Agreement

Implementation Act—Balance of Payments

Program Certificate.

* * * * *

(c) * * *

(2) * * *

(i) * * *

(ii) The Offeror certifies that the

following supplies are qualifying

country (except Canada) end products:

* * * * *

68. Section 252.225–7036 is amended

by adding a new Alternate I (MAY 1995)

to read as follows:

252.225–7036 North American Free Trade

Agreement Implementation Act.

* * * * *

ALTERNATE I (MAY 1995)

As prescribed in 225.408(a)(4)(B)(ii), add

the following paragraph (a)(7) to the basic

clause, and substitute the following

paragraph (c) in place of paragraph (c) of the

basic clause:

(a)(7) ‘‘Canadian end product,’’ means an

article that—

(i) Is wholly the growth, product, or

manufacturer of Canada; or

(ii) Has, in the case of an article which

consists in whole or in part of materials from

another country or instrumentality, been

substantially transformed in Canada into a

new and different article of commerce with

a name, character, or use distinct from that

of the article or articles from which it was

transformed. The term includes services

(except transportation services) incidental to

its supply; provided, that the value of those

incidental services does not exceed that of

the product itself. It does not include service

contracts as such.

(c) The Contractor agrees to deliver under

this contract only U.S. made end products

unless, in its offer, it specified delivery of

qualifying country, NAFTA country, or nonNAFTA country end products in the Buy

American Act-North American Free Trade

Agreement Implementation Act-Balance of

Payments Program Certificate provision. An

offer certifying that a qualifying country end

product or a Canadian end product will be

supplied requires the Contractor to supply a

qualifying country end product or a Canadian

end product, whichever is certified, or, at the

Contractor’s option, a U.S. made end

product.
Federal Register / Vol. 60, No. 107 / Monday, June 5, 1995 / Rules and Regulations 29503

252.225–7037 [Amended]

69. Section 252.225–7037 is amended

to revise in paragraph (f)(2)(iv) the

phrase ‘‘Customs Division, International

Logistics Office, 201 Varick Street, New

York, NY 10014’’ to read ‘‘Customs

Team, DCMDN–GNIC, 207 New York

Avenue, Staten Island, New York

10305–5013.’’

70. Section 252.225–7040 is added to

read as follows:

252.225–7040 Machine tool list.

As prescribed in 225.7004–5(c), use

the following provision:

Machine Tool List (May 1995)

The Government has identified those items

listed as machine tool accessories which are

not listed in the schedule as separate line

items. The Offeror must also list any

accessories to be provided which are not

specifically required by the specifications.

Where the machine tool accessory is not of

U.S. or Canadian origin, as defined in the

Preference for United States and Canadian

Valves and Machine Tools clause of this

solicitation, indicate the country in which

the accessory was manufactured and the cost

of the accessory.

Line Item

No.

Accessory

Country

of manufactureCost

(End of provision)

71. Section 252.235–7010 is added to

read as follows:

252.235–7010 Acknowledgment of support

and disclaimer.

As prescribed in 235.071(c), use the

following clause:

Acknowledgment of Support and Disclaimer

(May 1995)

(a) The Contractor shall include an

acknowledgment of the Government’s

support in the publication of any material

based on or developed under this contract,

stated in the following terms: This material

is based upon work supported by the (name

of contracting agency(ies)) under Contract

No. (Contracting agency(ies) contract

number(s)).

(b) All material, except scientific articles or

papers published in scientific journals, must,

in addition to any notices or disclaimers by

the Contractor, also contain the following

disclaimer: Any opinions, findings and

conclusions or recommendations expressed

in this material are those of the author(s) and

do not necessarily reflect the views of the

(name of contracting agency(ies)).

(End of clause)

72. Section 252.235–7011 is added to

read as follows:

252.235–7011 Final scientific or technical

report.

As prescribed in 235.071(d), use the

following clause:

Final Scientific or Technical Report (May

1995)

The Contractor shall submit two copies of

the approved scientific or technical report

delivered under this contract to the Defense

Technical Information Center (DTIC), Attn:

DTIC–)OC, Cameron Station, Alexandria, VA

22304–6145. The Contractor shall include a

completed Standard Form 298, Report

Documentation Page, with each copy of the

report. For submission of reports in other

than paper copy, contact the Defense

Technical Information Center, Attn: DTIC–

OC, Cameron Station, Alexandria, VA 22304–

6145.

(End of clause)

252.237–7022 [Amended]

73. Section 252.237–7022 is amended

by revising the clause date ‘‘(JUL 1994)’’

to read ‘‘(MAY 1995)’’ and by revising

at their second occurrence the words

‘‘the local’’ to read ‘‘such.’’

74. Section 252.247–7021 is revised to

read as follows:

252.247–7021 Returnable containers other

than cylinders.

As prescribed in 247.305–70, use the

following clause:

Returnable Containers Other Than Cylinders

(May 1995)

(a) Returnable container, as used in this

clause, includes reels, spools, drums,

carboys, liquid petroleum gas containers, and

other returnable containers when the

Contractor retains title to the container.

(b) Returnable containers shall remain the

Contractor’s property but shall be loaned

without charge to the Government for a

period of lll(insert number of days)

calendar days after delivery to the f.o.b. point

specified in the contract. Beginning with the

first day after the loan period expires, to and

including the day the containers are

delivered to the Contractor (if the original

delivery was f.o.b. origin) or are delivered or

are made available for delivery to the

Contractor’s designated carrier (if the original

delivery was f.o.b. destination), the

Government shall pay the Contractor a rental

of $lll (insert dollar amount for rental)

per container per day, computed separately

for containers for each type, size, and

capacity, and for each point of delivery

named in the contract. No rental shall accrue

to the Contractor in excess of the replacement

value per container specified in paragraph (c)

of this clause.

(c) For each container lost or damaged

beyond repair while in the Government’s

possession, the Government shall pay to the

Contractor the replacement value as follows,

less the allocable rental paid for that

container:

lllllllllllllllllllll

(Insert the container types, sizes, capacities,

and associated replacement values.)

These containers shall become Government

property.

(d) If any lost container is located within

lll (insert number of days) calendar days

after payment by the Government, it may be

returned to the Contractor by the

Government, and the Contractor shall pay to

the Government the replacement value, less

rental computed in accordance with

paragraph (b) of this clause, beginning at the

expiration of the loan period specified in

paragraph (b) of this clause, and continuing

to the date on which the container was

delivered to the Contractor.

(End of clause)

75. Section 252.247–7025 is revised to

read as follows:

252.247–7025 Reflagging or repair work.

As prescribed in 247.573(d), use the

following clause:

Reflagging or Repair Work (May 1995)

(a) Definition.

Reflagging or repair work, as used in this

clause, means work performed on a vessel—

(1) To enable the vessel to meet applicable

standards to become a vessel of the United

States; or

(2) To convert the vessel to a more useful

military configuration.

(b) Requirement. Unless the Secretary of

Defense waives this requirement, reflagging

or repair work shall be performed in the

United States or its territories, if the

reflagging or repair work is performed—

(1) On a vessel for which the Contractor

submitted an offer in response to the

solicitation for this contract; and

(2) Prior to acceptance of the vessel by the

Government.

(End of clause)

76. Section 252.249–7002 is amended

by revising the clause date ‘‘(MAY

1994)’’ to read ‘‘(MAY 1995)’’ and by

revising paragraph (c)(1) to read as

follows:

252.249–7002 Notification of proposed

program termination or reduction.

* * * * *

(c) * * *

(1) Each employee representative of the

Contractor’s employees whose work is

related to the program and who may be

impacted in the event of a termination or

substantial reduction; or

* * * * *

77. Section 252.251–7000 is amended

by revising the clause date ‘‘(DEC

1991)’’ to read ‘‘(MAY 1995)’’; by

revising paragraph (d)(4); and by adding

a new paragraph (f) to read as follows:

252.251–7000 Ordering from Government

supply sources.

* * * * *

(d) * * *

(1) * * *

(2) * * *

(3) * * *
29504 Federal Register / Vol. 60, No. 107 / Monday, June 5, 1995 / Rules and Regulations

(4) Pay invoices from Government supply

sources promptly. For purchases made from

DoD supply sources, this means within 30

days of the date of a proper invoice (see also

Defense Federal Acquisition Regulation

Supplement (DFARS) 251.105). For purposes

of computing interest for late Contractor

payments, the Government’s invoice is

deemed to be a demand for payment in

accordance with the Interest clause of this

contract. The Contractor’s failure to pay may

also result in the DoD supply source refusing

to honor the requisition (see DFARS

251.102(f)) or in the Contracting Officer

terminating the Contractor’s authorization to

use DoD supply sources. In the event the

Contracting Officer decides to terminate the

authorization due to the Contractor’s failure

to pay in a timely manner, the Contracting

Officer shall provide the Contractor with

prompt written notice of the intent to

terminate the authorization and the basis for

such action. The Contractor shall have 10

days after receipt of the Government’s notice

in which to provide additional information

as to why the authorization should not be

terminated. Such termination shall not

provide the Contractor with an excusable

delay for failure to perform or complete the

contract in accordance with the terms of the

contract, and the Contractor shall be solely

responsible for any increased costs.

(e) * * *

(f) Government invoices shall be submitted

to the Contractor’s billing address, and

Contractor payments shall be sent to the

Government remittance address specified

below:

Contractor’s Billing Address (include point of

contact and telephone number):

Government Remittance Address (include

point of contact and telephone number):

(End of clause)

PART 253—FORMS

78. Section 253.209–1 is amended by

revising paragraph (a)(i)(E) to read as

follows:

253.209–1 Responsible prospective

contractors.

(a) * * *

(i) * * *

(E) Accounting system and related internal

controls. An assessment by the auditor of the

adequacy of the prospective contractor’s

accounting system and related internal

controls as defined in 242.7501, Definition.

Normally, a contracting officer will request

an accounting system review when soliciting

and awarding cost-reimbursement or

incentive type contracts, or contracts which

provide for progress payments based on costs

or on a percentage or stage of completion.

* * * * *

253.215–70 [Amended]

79. At the end of section 253.215–70,

Form 253.303–2139, Report of Contract

Performance Outside the United States,

is added in numerical order to the

DFARS Form List.

Appendix C to Chapter 2

80. Appendix C to Chapter 2, Section

C–207.5 is amended by revising

paragraph (b) to read as follows:

C–207.5 Subcontractor

responsibility and vendor performance

rating system (IIG5).

(a) * * *

(b) Vendor performance rating systems.

Contractor vendor performance rating

systems may be a valuable element in the

contractor’s selection of subcontractors that

offer the greatest value to the Government.

State in the report whether the contractor has

a vendor rating system. If the contractor has

a system in place, evaluate its effectiveness

in selecting sources. Consider whether the

system—

(1) Allows consistency of comparisons

among competing subcontractors;

(2) Protects rating information;

(3) Provides appropriate documentation for

each element rated;

(4) Allows adequate opportunities for new

subcontractors to compete;

(5) Provides for evaluations by appropriate

functional areas; and

(6) Is kept current and accurate.

[FR Doc. 95–13061 Filed 6–2–95; 8:45 am]

BILLING CODE 3810–01–M

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 1831 and 1852

RIN 2700–AB82

Revision to NASA FAR Supplement

Coverage on Precontract Costs

AGENCY: Office of Procurement,

Acquisition Liaison Division, National

Aeronautics and Space Administration

(NASA).

ACTION: Final rule.

SUMMARY: This rule amends the

regulations pertaining to precontract

costs to specify the content of letters to

contractors which authorize the

incurrence of precontract costs, make

clear the circumstances when

precontract costs would be appropriate,

and clarify that precontract costs are not

allowable unless the clause ‘‘Precontract

Costs’’ is included in the contract. In

addition, the rule revises the

prescription for the clause to allow its

use in other than cost-reimbursement

contracts. Also, the rule changes the

title of that clauses from ‘‘Date of

Incurrence of Costs’’ to ‘‘Precontract

Costs’’ to more accurately reflect its

purpose.

EFFECTIVE DATE: July 5, 1995.

FOR FURTHER INFORMATION CONTACT:

Mr. Joseph Le Cren, (202) 358–0444.

SUPPLEMENTARY INFORMATION:

Background

NASA proposed to amend its

regulation on precontract costs, 59 FR

33254, 6/28/94. The rule is intended to

provide standardization in the contents

of the Agency’s precontract cost letters

to contractors, make clear the

circumstances when precontract costs

would be appropriate, clarify that the

precontract cost clause is required in the

contract in order for such costs to be

allowable, and changes the title of the

precontract cost clause to more

accurately reflect its purpose.

The only public comments submitted

were from an industry association. The

association considers the FAR coverage

to be adequate and ‘‘strongly opposes

the proposed revision as an

unwarranted and unnecessary

restriction of the FAR provisions

governing percontract costs.’’ NASA’s

coverage differs from the FAR cost

principle by making precontract costs

unallowable unless the NASA

precontract costs clause is included in

the contract.

The public comments were reviewed

and considered. The proposed rule was

determined to be compliant with the

FAR as it utilizes advance agreements

whose terms are incorporated in the

affected contracts. In addition, the rule

prevents the types of litigation

identified by the commenter.

Furthermore, NASA believes the need to

incur precontract costs should be

disclosed and only incurred when

authorized.

Although no change was made to the

proposed rule based on the public

comments, the rule has been revised as

a result of our review due to the public

comments. The final rule eliminates the

need for the Precontract Costs clause in

firm-fixed-price contracts and fixedprice contracts with an economic price

adjustment. The background for the

proposed rule stated that the clause was

appropriate for the firm-fixed price

contracts as the FAR Part 31 cost

principles would apply in the case of a

termination. While that is true, FAR

49.113, Cost principles, also states that

the Part 31 cost principles are subject to

the general principles of 49.201. That

section states that the primary objective

of a termination settlement is to

compensate the contractor fairly for the

work done and the parties may agree on

a total amount to be paid the contractor

without agreeing on or segregating the

particular elements of costs or profit

comprising that amount. Therefore, the

cost principles are viewed as a guide

and not required for reaching an

agreement by cost element, eliminating