Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations 2117

This rule revises FAR 52.212–4(b) to

add the prohibition.

Item V—Clause Flowdown—

Commercial Items (FAR Case 1996–023)

This final rule amends the clause at

FAR 52.244–6, Subcontracts for

Commercial Items, to revise the listing

of clauses the contractor must flow

down to subcontractors. The rule revises

the listing to add the clause at FAR

52.219–8, Utilization of Small Business

Concerns, when specified circumstances

have been met. In addition, the rule

adds language to inform contractors that

they may flow down a minimal number

of additional clauses to subcontractors

to satisfy their contractual obligations.

Item VI—Technical Amendments

This document makes amendments to

the Federal Acquisition Regulation in

order to update references and make

editorial changes.

Dated: December 22, 2000.

Al Matera,

Acting Director, Federal Acquisition Policy

Division.

Federal Acquisition Circular

Federal Acquisition Circular (FAC)

97–22 is issued under the authority of

the Secretary of Defense, the

Administrator of General Services, and

the Administrator for the National

Aeronautics and Space Administration.

All Federal Acquisition Regulation

(FAR) changes and other directive

material contained in FAC 97–22 are

effective March 12, 2001, except for

Items II and VI, which are effective

January 10, 2001.

Dated: December 8, 2000

Deidre A. Lee,

Director, Defense Procurement.

Dated: December 8, 2000.

David A. Drabkin,

Deputy Associate Administrator, Office of

Acquisition Policy, General Services

Administration.

Dated: December 7, 2000.

Tom Luedtke,

Associate Administrator for Procurement,

National Aeronautics and Space

Administration.

[FR Doc. 01–282 Filed 1–9–01; 8:45 am]

BILLING CODE 6820–EP–P

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 1, 2, 3, 4, 5, 6, 7, 8, 9, 11,

13, 14, 15, 17, 19, 22, 23, 24, 26, 27, 28,

29, 31, 32, 33, 34, 35, 36, 37, 39, 42, 43,

44, 46, 47, 48, 49, 50, and 52

[FAC 97–22; FAR Case 1999–403; Item I]

RIN 9000–AJ08

Federal Acquisition Regulation;

Definitions

AGENCIES: Department of Defense (DoD),

General Services Administration (GSA),

and National Aeronautics and Space

Administration (NASA).

ACTION: Final rule.

SUMMARY: The Civilian Agency

Acquisition Council and the Defense

Acquisition Regulations Council

(Councils) have agreed on a final rule

amending the Federal Acquisition

Regulation (FAR) to clarify the

applicability of definitions, eliminate

redundant or conflicting definitions,

and make definitions easier to find.

DATES: Effective Date: March 12, 2001.

FOR FURTHER INFORMATION CONTACT: The

FAR Secretariat, Room 4035, GS

Building, Washington, DC, 20405, (202)

501–4755, for information pertaining to

status or publication schedules. For

clarification of content, contact Mr.

Jeremy Olson, Procurement Analyst, at

(202) 501–3221. Please cite FAC 97–22,

FAR case 1999–403.

SUPPLEMENTARY INFORMATION:

A. Background

This final rule clarifies the

applicability of definitions, eliminates

redundant or conflicting definitions,

and makes definitions easier to find.

The Councils do not intend to make any

substantive policy changes to the FAR

by these amendments. Nevertheless, in

view of the extensive scope of these

FAR improvements, comments are

invited in the event any substantial

policy change appears to have been

made inadvertently. The rule—

• Relocates definitions of terms that

are used in more than one FAR part

with the same meaning to 2.101;

• Relocates other definitions of terms

to the ‘‘Definitions’’ section of the

highest level FAR division (part,

subpart, or section) the term as defined

is used in. For example, if a term was

defined in a FAR section, but the term

is used as defined in another section of

that subpart, then the definition was

moved to the ‘‘Definitions’’ section of

that subpart;

• Clarifies that a term, defined in FAR

2.101, has the same meaning throughout

the FAR unless the context in which the

term is used clearly requires a different

meaning; or another FAR part, subpart,

or section provides a different definition

for that particular part, subpart, or

section;

• Adds cross-references to definitions

of terms in FAR 2.101 that are defined

differently in another part, subpart, or

section of the FAR;

• Makes plain language revisions to

the revised text in accordance with the

White House memorandum, Plain

Language in Government Writing, dated

June 1, 1998; and

• Makes technical corrections

throughout the FAR.

This is not a significant regulatory

action, and therefore, was not subject to

review under Section 6(b) of Executive

Order 12866, Regulatory Planning and

Review, dated September 30, 1993. This

rule is not a major rule under 5 U.S.C.

804.

B. Regulatory Flexibility Act

The final rule does not constitute a

significant FAR revision within the

meaning of FAR 1.501 and Public Law

98–577, and publication for public

comments is not required. However, the

Councils will consider comments from

small entities concerning the affected

FAR Parts in accordance with 5 U.S.C.

610. Interested parties must submit such

comments separately and should cite 5

U.S.C. 601, et seq. (FAC 97–22, FAR

case 1999–403), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does

not apply because the changes to the

FAR do not impose information

collection requirements that require the

approval of the Office of Management

and Budget under 44 U.S.C. 3501, et

seq.

List of Subjects in 48 CFR Parts 1, 2, 3,

4, 5, 6, 7, 8, 9, 11, 13, 14, 15, 17, 19,

22, 23, 24, 26, 27, 28, 29, 31, 32, 33, 34,

35, 36, 37, 39, 42, 43, 44, 46, 47, 48, 49,

50, and 52

Government procurement.

Dated: December 22, 2000.

Al Matera,

Acting Director, Federal Acquisition Policy

Division.

Therefore, DoD, GSA, and NASA

amend 48 CFR parts 1, 2, 3, 4, 5, 6, 7,

8, 9, 11, 13, 14, 15, 17, 19, 22, 23, 24,

26, 27, 28, 29, 31, 32, 33, 34, 35, 36, 37,

39, 42, 43, 44, 46, 47, 48, 49, 50, and 52

as set forth below:

2118 Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations

1. The authority citation for 48 CFR

parts 1, 2, 3, 4, 5, 6, 7, 8, 9, 11, 13, 14,

15, 17, 19, 22, 23, 24, 26, 27, 28, 29, 31,

32, 33, 34, 35, 36, 37, 39, 42, 43, 44, 46,

47, 48, 49, 50, and 52 continues to read

as follows:

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

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

PART 1—FEDERAL ACQUISITION

REGULATIONS SYSTEM

2. Amend section 1.401 in paragraph

(a) by removing ‘‘52.101(a)’’ each time it

is used (twice) and adding ‘‘2.101’’ in its

place; and in paragraphs (c) and (d)

revise the text in the parenthetical to

read as follows:

1.401 Definition.

* * * * *

(c) * * * (see definition of

‘‘modification’’ in 52.101(a) and

definition of ‘‘alternate’’ in 2.101(a)).

(d) * * * (see definitions in 2.101 and

52.101(a))

***

* * * * *

PART 2—DEFINITIONS OF WORDS

AND TERMS

3a. Revise 2.000 to read as follows:

2.000 Scope of part.

(a) This part—

(1) Defines words and terms that are

frequently used in the FAR;

(2) Provides cross-references to other

definitions in the FAR of the same word

or term; and

(3) Provides for the incorporation of

these definitions in solicitations and

contracts by reference.

(b) Other parts, subparts, and sections

of this regulation (48 CFR chapter 1)

may define other words or terms and

those definitions only apply to the part,

subpart, or section where the word or

term is defined (see the Index for

locations).

3b. Amend section 2.101 as follows:

—Revise paragraphs (a) and (b);

—Add, in alphabetical order, the

following definitions:

‘‘Acquisition planning,’’

‘‘Adequate evidence,’’

‘‘Alternate,’’

‘‘Architect-engineer services,’’

‘‘Assignment of claims,’’

‘‘Basic research,’’

‘‘Broad agency announcement,’’

‘‘Business unit,’’

‘‘Change-of-name agreement,’’

‘‘Change order,’’

‘‘Cognizant Federal agency,’’

‘‘Computer software,’’

‘‘Consent to subcontract,’’

‘‘Contract clause or clause,’’

‘‘Contract modification,’’

‘‘Conviction,’’

‘‘Cost or pricing data,’’

‘‘Cost realism,’’

‘‘Cost sharing,’’

‘‘Debarment,’’

‘‘Design-to-cost,’’

‘‘Drug-free workplace,’’

‘‘Effective date of termination,’’

‘‘Electronic data interchange (EDI),’’

‘‘Electronic Funds Transfer (EFT),’’

‘‘Federally Funded Research and

Development Centers (FFRDCs),’’

‘‘Final indirect cost rate,’’

‘‘First article,’’

‘‘First article testing,’’

‘‘F.o.b.,’’

‘‘F.o.b. destination,’’

‘‘F.o.b. origin,

‘‘F.o.b. . . .,’’

‘‘Forward pricing rate agreement,’’

‘‘Forward pricing rate

recommendation,’’

‘‘Freight,’’

‘‘Full and open competition,’’

‘‘General and administrative (G&A)

expense,’’

‘‘Historically black college or

university,’’

‘‘HUBZone,’’

‘‘HUBZone small business concern,’’

‘‘Indirect cost,’’

‘‘Indirect cost rate,’’

‘‘Ineligible,’’

‘‘Information other than cost or pricing

data,’’

‘‘Inherently governmental function,’’

‘‘Inspection,’’

‘‘Insurance,’’

‘‘Invoice,’’

‘‘Irrevocable letter of credit,’’

‘‘Labor surplus area,’’

‘‘Labor surplus area concern,’’

‘‘Latent defect,’’

‘‘List of Parties Excluded from Federal

Procurement and Nonprocurement

Programs,’’

‘‘Make-or-Buy program,’’

‘‘Master solicitation,’’

‘‘Minority Institution,’’

‘‘Neutral person,’’

‘‘Novation agreement,’’

‘‘Option,’’

‘‘Organizational conflict of interest,’’

‘‘Overtime,’’

‘‘Overtime premium,’’

‘‘Ozone-depleting substance,’’

‘‘Performance-based contracting,’’

‘‘Personal services contract,’’

‘‘Power of attorney,’’

‘‘Preaward survey,’’

‘‘Preponderance of the evidence,’’

‘‘Pricing,’’

‘‘Procurement,’’

‘‘Procuring activity,’’

‘‘Projected average loss,’’

‘‘Proper invoice,’’

‘‘Purchase order,’’

‘‘Qualification requirement,’’

‘‘Qualified products list (QPL),’’

‘‘Residual value,’’

‘‘Responsible audit agency,’’

‘‘Responsible prospective contractor,’’

‘‘Segment,’’

‘‘Self-insurance,’’

‘‘Shipment,’’

‘‘Shop drawings,’’

‘‘Should,’’

‘‘Single, Governmentwide point of

entry,’’

‘‘Small business subcontractor,’’

‘‘Small disadvantaged business

concern,’’

‘‘Sole source acquisition,’’

‘‘Solicitation provision or provision,’’

‘‘Special competency,’’

‘‘State and local taxes,’’

‘‘Substantial evidence,’’

‘‘Substantially as follows or

substantially the same as,’’

‘‘Supplemental agreement,’’

‘‘Surety,’’

‘‘Suspension,’’

‘‘Taxpayer Identification Number

(TIN),’’

‘‘Unallowable cost,’’

‘‘Unique and innovative concept,’’

‘‘Unsolicited proposal,’’

‘‘Value engineering,’’

‘‘Value engineering change proposal

(VECP),’’

‘‘Warranty,’’

‘‘Women-owned small business

concern,’’

‘‘Writing or written,’’

—Amend the definitions listed below

as follows:

Definition/paragraph Remove paragraph designation(s)

or word Add in its/their place

‘‘Contract administration office,’’ ............................................................. ‘‘(a)’’ and ‘‘(b)’’ ............................... ‘‘(1)’’ and ‘‘(2)’’, respectively.

‘‘Contracting officer,’’ ............................................................................... ‘‘(a)’’ and ‘‘(b)’’ ............................... ‘‘(1)’’ and ‘‘(2)’’, respectively.

‘‘Federal Acquisition Computer Network (FACNET) Architecture’’ ......... ‘‘is’’ ................................................. ‘‘means’’.

‘‘Head of the contracting activity’’ ........................................................... ‘‘includes’’ ...................................... ‘‘means’’.

‘‘Pollution prevention,’’ ............................................................................. ‘‘(a)(1)’’ and ‘‘(2)’’ ........................... ‘‘(1)(i)’’ and ‘‘(ii)’’, respectively.

‘‘(b)’’ and ‘‘(c)’’ ............................... ‘‘(2)’’ and ‘‘(3)’’, respectively.

Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations 2119

Definition/paragraph Remove paragraph designation(s)

or word Add in its/their place

‘‘Virgin material,’’ ..................................................................................... ‘‘(a)’’ and ‘‘(b)’’ ............................... ‘‘(1)’’ and ‘‘(2)’’, respectively.

—Revise the definitions ‘‘Affiliates,’’

‘‘Agency head or head of the agency,’’

‘‘Commercial item,’’ ‘‘Contracting

office,’’ ‘‘Head of the agency,’’ ‘‘In

writing, writing, or written,’’

‘‘Information technology,’’ ‘‘Major

system,’’ and ‘‘Nondevelopmental

item’’. For the convenience of the user,

the section is set out in its entirety to

read as follows:

2.101 Definitions.

(a) A word or a term, defined in this

section, has the same meaning

throughout this regulation (48 CFR

chapter 1), unless—

(1) The context in which the word or

term is used clearly requires a different

meaning; or

(2) Another FAR part, subpart, or

section provides a different definition

for the particular part or portion of the

part.

(b) If a word or term that is defined

in this section is defined differently in

another part, subpart, or section of this

regulation (48 CFR chapter 1, the

definition in—

(1) This section includes a crossreference to the other definitions; and

(2) That part, subpart, or section

applies to the word or term when used

in that part, subpart, or section.

Acquisition means the acquiring by

contract with appropriated funds of

supplies or services (including

construction) by and for the use of the

Federal Government through purchase

or lease, whether the supplies or

services are already in existence or must

be created, developed, demonstrated,

and evaluated. Acquisition begins at the

point when agency needs are

established and includes the description

of requirements to satisfy agency needs,

solicitation and selection of sources,

award of contracts, contract financing,

contract performance, contract

administration, and those technical and

management functions directly related

to the process of fulfilling agency needs

by contract.

Acquisition planning means the

process by which the efforts of all

personnel responsible for an acquisition

are coordinated and integrated through

a comprehensive plan for fulfilling the

agency need in a timely manner and at

a reasonable cost. It includes developing

the overall strategy for managing the

acquisition.

Adequate evidence means

information sufficient to support the

reasonable belief that a particular act or

omission has occurred.

Advisory and assistance services

means those services provided under

contract by nongovernmental sources to

support or improve: organizational

policy development; decision-making;

management and administration;

program and/or project management

and administration; or R&D activities. It

can also mean the furnishing of

professional advice or assistance

rendered to improve the effectiveness of

Federal management processes or

procedures (including those of an

engineering and technical nature). In

rendering the foregoing services,

outputs may take the form of

information, advice, opinions,

alternatives, analyses, evaluations,

recommendations, training and the dayto-day aid of support personnel needed

for the successful performance of

ongoing Federal operations. All

advisory and assistance services are

classified in one of the following

definitional subdivisions:

(1) Management and professional

support services, i.e., contractual

services that provide assistance, advice

or training for the efficient and effective

management and operation of

organizations, activities (including

management and support services for

R&D activities), or systems. These

services are normally closely related to

the basic responsibilities and mission of

the agency originating the requirement

for the acquisition of services by

contract. Included are efforts that

support or contribute to improved

organization of program management,

logistics management, project

monitoring and reporting, data

collection, budgeting, accounting,

performance auditing, and

administrative technical support for

conferences and training programs.

(2) Studies, analyses and evaluations,

i.e., contracted services that provide

organized, analytical assessments/

evaluations in support of policy

development, decision-making,

management, or administration.

Included are studies in support of R&D

activities. Also included are

acquisitions of models, methodologies,

and related software supporting studies,

analyses or evaluations.

(3) Engineering and technical

services, i.e., contractual services used

to support the program office during the

acquisition cycle by providing such

services as systems engineering and

technical direction (see 9.505–1(b)) to

ensure the effective operation and

maintenance of a weapon system or

major system as defined in OMB

Circular No. A–109 or to provide direct

support of a weapon system that is

essential to research, development,

production, operation or maintenance of

the system.

Affiliates means associated business

concerns or individuals if, directly or

indirectly—

(1) Either one controls or can control

the other; or

(2) A third party controls or can

control both.

Agency head or head of the agency

means the Secretary, Attorney General,

Administrator, Governor, Chairperson,

or other chief official of an executive

agency, unless otherwise indicated,

including any deputy or assistant chief

official of an executive agency.

Alternate means a substantive

variation of a basic provision or clause

prescribed for use in a defined

circumstance. It adds wording to,

deletes wording from, or substitutes

specified wording for a portion of the

basic provision or clause. The alternate

version of a provision or clause is the

basic provision or clause as changed by

the addition, deletion, or substitution

(see 52.105(a)).

Architect-engineer services, as defined

in 40 U.S.C. 541, means—

(1) Professional services of an

architectural or engineering nature, as

defined by State law, if applicable, that

are required to be performed or

approved by a person licensed,

registered, or certified to provide those

services;

(2) Professional services of an

architectural or engineering nature

performed by contract that are

associated with research, planning,

development, design, construction,

alteration, or repair of real property; and

(3) Those other professional services

of an architectural or engineering

nature, or incidental services, that

members of the architectural and

engineering professions (and

individuals in their employ) may

logically or justifiably perform,

including studies, investigations,

surveying and mapping, tests,

evaluations, consultations,

comprehensive planning, program

management, conceptual designs, plans

and specifications, value engineering,

2120 Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations

construction phase services, soils

engineering, drawing reviews,

preparation of operating and

maintenance manuals, and other related

services.

Assignment of claims means the

transfer or making over by the

contractor to a bank, trust company, or

other financing institution, as security

for a loan to the contractor, of its right

to be paid by the Government for

contract performance.

Basic research means that research

directed toward increasing knowledge

in science. The primary aim of basic

research is a fuller knowledge or

understanding of the subject under

study, rather than any practical

application of that knowledge.

Best value means the expected

outcome of an acquisition that, in the

Government’s estimation, provides the

greatest overall benefit in response to

the requirement.

Broad agency announcement means a

general announcement of an agency’s

research interest including criteria for

selecting proposals and soliciting the

participation of all offerors capable of

satisfying the Government’s needs (see

6.102(d)(2)).

Bundled contract means a contract

where the requirements have been

consolidated by bundling. (See the

definition of bundling.)

Bundling means—

(1) Consolidating two or more

requirements for supplies or services,

previously provided or performed under

separate smaller contracts, into a

solicitation for a single contract that is

likely to be unsuitable for award to a

small business concern due to—

(i) The diversity, size, or specialized

nature of the elements of the

performance specified;

(ii) The aggregate dollar value of the

anticipated award;

(iii) The geographical dispersion of

the contract performance sites; or

(iv) Any combination of the factors

described in paragraphs (1)(i), (ii), and

(iii) of this definition.

(2) ‘‘Separate smaller contract’’ as

used in this definition, means a contract

that has been performed by one or more

small business concerns or that was

suitable for award to one or more small

business concerns.

(3) This definition does not apply to

a contract that will be awarded and

performed entirely outside of the United

States.

Business unit means any segment of

an organization, or an entire business

organization that is not divided into

segments.

Change-of-name agreement means a

legal instrument executed by the

contractor and the Government that

recognizes the legal change of name of

the contractor without disturbing the

original contractual rights and

obligations of the parties.

Change order means a written order,

signed by the contracting officer,

directing the contractor to make a

change that the Changes clause

authorizes the contracting officer to

order without the contractor’s consent.

Cognizant Federal agency means the

Federal agency that, on behalf of all

Federal agencies, is responsible for

establishing final indirect cost rates and

forward pricing rates, if applicable, and

administering cost accounting standards

for all contracts in a business unit.

Commercial component means any

component that is a commercial item.

Commercial item means—

(1) Any item, other than real property,

that is of a type customarily used for

nongovernmental purposes and that—

(i) Has been sold, leased, or licensed

to the general public; or

(ii) Has been offered for sale, lease, or

license to the general public;

(2) Any item that evolved from an

item described in paragraph (1) of this

definition through advances in

technology or performance and that is

not yet available in the commercial

marketplace, but will be available in the

commercial marketplace in time to

satisfy the delivery requirements under

a Government solicitation;

(3) Any item that would satisfy a

criterion expressed in paragraphs (1) or

(2) of this definition, but for—

(i) Modifications of a type customarily

available in the commercial

marketplace; or

(ii) Minor modifications of a type not

customarily available in the commercial

marketplace made to meet Federal

Government requirements. Minor

modifications means modifications that

do not significantly alter the

nongovernmental function or essential

physical characteristics of an item or

component, or change the purpose of a

process. Factors to be considered in

determining whether a modification is

minor include the value and size of the

modification and the comparative value

and size of the final product. Dollar

values and percentages may be used as

guideposts, but are not conclusive

evidence that a modification is minor;

(4) Any combination of items meeting

the requirements of paragraphs (1), (2),

(3), or (5) of this definition that are of

a type customarily combined and sold

in combination to the general public;

(5) Installation services, maintenance

services, repair services, training

services, and other services if such

services are procured for support of an

item referred to in paragraphs (1), (2),

(3), or (4) of this definition, and if the

source of such services—

(i) Offers such services to the general

public and the Federal Government

contemporaneously and under similar

terms and conditions; and

(ii) Offers to use the same work force

for providing the Federal Government

with such services as the source uses for

providing such services to the general

public;

(6) Services of a type offered and sold

competitively in substantial quantities

in the commercial marketplace based on

established catalog or market prices for

specific tasks performed under standard

commercial terms and conditions. This

does not include services that are sold

based on hourly rates without an

established catalog or market price for a

specific service performed;

(7) Any item, combination of items, or

service referred to in paragraphs (1)

through (6) of this definition,

notwithstanding the fact that the item,

combination of items, or service is

transferred between or among separate

divisions, subsidiaries, or affiliates of a

contractor; or

(8) A nondevelopmental item, if the

procuring agency determines the item

was developed exclusively at private

expense and sold in substantial

quantities, on a competitive basis, to

multiple State and local governments.

Component means any item supplied

to the Government as part of an end

item or of another component, except

that for use in 52.225–9 and 52.225–11,

see the definitions in 52.225–9(a) and

52.225–11(a).

Computer software means computer

programs, computer data bases, and

related documentation.

Consent to subcontract means the

contracting officer’s written consent for

the prime contractor to enter into a

particular subcontract.

Construction means construction,

alteration, or repair (including dredging,

excavating, and painting) of buildings,

structures, or other real property. For

purposes of this definition, the terms

‘‘buildings, structures, or other real

property’’ include, but are not limited

to, improvements of all types, such as

bridges, dams, plants, highways,

parkways, streets, subways, tunnels,

sewers, mains, power lines, cemeteries,

pumping stations, railways, airport

facilities, terminals, docks, piers,

wharves, ways, lighthouses, buoys,

jetties, breakwaters, levees, canals, and

channels. Construction does not include

the manufacture, production,

furnishing, construction, alteration,

repair, processing, or assembling of

Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations 2121

vessels, aircraft, or other kinds of

personal property.

Contract means a mutually binding

legal relationship obligating the seller to

furnish the supplies or services

(including construction) and the buyer

to pay for them. It includes all types of

commitments that obligate the

Government to an expenditure of

appropriated funds and that, except as

otherwise authorized, are in writing. In

addition to bilateral instruments,

contracts include (but are not limited to)

awards and notices of awards; job orders

or task letters issued under basic

ordering agreements; letter contracts;

orders, such as purchase orders, under

which the contract becomes effective by

written acceptance or performance; and

bilateral contract modifications.

Contracts do not include grants and

cooperative agreements covered by 31

U.S.C. 6301, et seq. For discussion of

various types of contracts, see part 16.

Contract administration office means

an office that performs—

(1) Assigned postaward functions

related to the administration of

contracts; and

(2) Assigned preaward functions.

Contract clause or clause means a

term or condition used in contracts or

in both solicitations and contracts, and

applying after contract award or both

before and after award.

Contract modification means any

written change in the terms of a contract

(see 43.103).

Contracting means purchasing,

renting, leasing, or otherwise obtaining

supplies or services from nonfederal

sources. Contracting includes

description (but not determination) of

supplies and services required, selection

and solicitation of sources, preparation

and award of contracts, and all phases

of contract administration. It does not

include making grants or cooperative

agreements.

Contracting activity means an element

of an agency designated by the agency

head and delegated broad authority

regarding acquisition functions.

Contracting office means an office that

awards or executes a contract for

supplies or services and performs

postaward functions not assigned to a

contract administration office (except

for use in part 48, see also 48.001).

Contracting officer means a person

with the authority to enter into,

administer, and/or terminate contracts

and make related determinations and

findings. The term includes certain

authorized representatives of the

contracting officer acting within the

limits of their authority as delegated by

the contracting officer. ‘‘Administrative

contracting officer (ACO)’’ refers to a

contracting officer who is administering

contracts. ‘‘Termination contracting

officer (TCO)’’ refers to a contracting

officer who is settling terminated

contracts. A single contracting officer

may be responsible for duties in any or

all of these areas. Reference in this

regulation (48 CFR chapter 1) to

administrative contracting officer or

termination contracting officer does

not—

(1) Require that a duty be performed

at a particular office or activity; or

(2) Restrict in any way a contracting

officer in the performance of any duty

properly assigned.

Conviction means a judgment or

conviction of a criminal offense by any

court of competent jurisdiction, whether

entered upon a verdict or a plea, and

includes a conviction entered upon a

plea of nolo contendere. For use in

subpart 23.5, see the definition at

23.503.

Cost or pricing data (10 U.S.C.

2306a(h)(1) and 41 U.S.C. 254b) means

all facts that, as of the date of price

agreement or, if applicable, an earlier

date agreed upon between the parties

that is as close as practicable to the date

of agreement on price, prudent buyers

and sellers would reasonably expect to

affect price negotiations significantly.

Cost or pricing data are data requiring

certification in accordance with 15.406–

2. Cost or pricing data are factual, not

judgmental; and are verifiable. While

they do not indicate the accuracy of the

prospective contractor’s judgment about

estimated future costs or projections,

they do include the data forming the

basis for that judgment. Cost or pricing

data are more than historical accounting

data; they are all the facts that can be

reasonably expected to contribute to the

soundness of estimates of future costs

and to the validity of determinations of

costs already incurred. They also

include such factors as—

(1) Vendor quotations;

(2) Nonrecurring costs;

(3) Information on changes in

production methods and in production

or purchasing volume;

(4) Data supporting projections of

business prospects and objectives and

related operations costs;

(5) Unit-cost trends such as those

associated with labor efficiency;

(6) Make-or-buy decisions;

(7) Estimated resources to attain

business goals; and

(8) Information on management

decisions that could have a significant

bearing on costs.

Cost realism means that the costs in

an offeror’s proposal—

(1) Are realistic for the work to be

performed;

(2) Reflect a clear understanding of

the requirements; and

(3) Are consistent with the various

elements of the offeror’s technical

proposal.

Cost sharing means an explicit

arrangement under which the contractor

bears some of the burden of reasonable,

allocable, and allowable contract cost.

Day means, unless otherwise

specified, a calendar day.

Debarment means action taken by a

debarring official under 9.406 to

exclude a contractor from Government

contracting and Government-approved

subcontracting for a reasonable,

specified period; a contractor that is

excluded is ‘‘debarred.’’

Delivery order means an order for

supplies placed against an established

contract or with Government sources.

Design-to-cost means a concept that

establishes cost elements as

management goals to achieve the best

balance between life-cycle cost,

acceptable performance, and schedule.

Under this concept, cost is a design

constraint during the design and

development phases and a management

discipline throughout the acquisition

and operation of the system or

equipment.

Drug-free workplace means the site(s)

for the performance of work done by the

contractor in connection with a specific

contract where employees of the

contractor are prohibited from engaging

in the unlawful manufacture,

distribution, dispensing, possession, or

use of a controlled substance.

Effective date of termination means

the date on which the notice of

termination requires the contractor to

stop performance under the contract. If

the contractor receives the termination

notice after the date fixed for

termination, then the effective date of

termination means the date the

contractor receives the notice.

Electronic commerce means electronic

techniques for accomplishing business

transactions including electronic mail or

messaging, World Wide Web

technology, electronic bulletin boards,

purchase cards, electronic funds

transfer, and electronic data

interchange.

Electronic data interchange (EDI)

means a technique for electronically

transferring and storing formatted

information between computers

utilizing established and published

formats and codes, as authorized by the

applicable Federal Information

Processing Standards.

Electronic Funds Transfer (EFT)

means any transfer of funds, other than

a transaction originated by cash, check,

or similar paper instrument, that is

2122 Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations

initiated through an electronic terminal,

telephone, computer, or magnetic tape,

for the purpose of ordering, instructing,

or authorizing a financial institution to

debit or credit an account. The term

includes Automated Clearing House

transfers, Fedwire transfers, and

transfers made at automatic teller

machines and point-of-sale terminals.

For purposes of compliance with 31

U.S.C. 3332 and implementing

regulations at 31 CFR part 208, the term

‘‘electronic funds transfer’’ includes a

Governmentwide commercial purchase

card transaction.

End product means supplies

delivered under a line item of a

Government contract.

Energy-efficient product means a

product in the upper 25 percent of

efficiency for all similar products or, if

there are applicable Federal appliance

or equipment efficiency standards, a

product that is at least 10 percent more

efficient than the minimum Federal

standard.

Environmentally preferable means

products or services that have a lesser

or reduced effect on human health and

the environment when compared with

competing products or services that

serve the same purpose. This

comparison may consider raw materials

acquisition, production, manufacturing,

packaging, distribution, reuse,

operation, maintenance, or disposal of

the product or service.

Executive agency means an executive

department, a military department, or

any independent establishment within

the meaning of 5 U.S.C. 101, 102, and

104(1), respectively, and any wholly

owned Government corporation within

the meaning of 31 U.S.C. 9101.

Facsimile means electronic

equipment that communicates and

reproduces both printed and

handwritten material. If used in

conjunction with a reference to a

document; e.g., facsimile bid, the terms

refers to a document (in the example

given, a bid) that has been transmitted

to and received by the Government via

facsimile.

Federal Acquisition Computer

Network (FACNET) Architecture is a

Governmentwide system that provides

universal user access, employs

nationally and internationally

recognized data formats, and allows the

electronic data interchange of

acquisition information between the

private sector and the Federal

Government. FACNET qualifies as the

single, Governmentwide point of entry

pending designation by the

Administrator of the Office of Federal

Procurement Policy (OFPP).

Federal agency means any executive

agency or any independent

establishment in the legislative or

judicial branch of the Government

(except the Senate, the House of

Representatives, the Architect of the

Capitol, and any activities under the

Architect’s direction).

Federally Funded Research and

Development Centers (FFRDC’s) means

activities that are sponsored under a

broad charter by a Government agency

(or agencies) for the purpose of

performing, analyzing, integrating,

supporting, and/or managing basic or

applied research and/or development,

and that receive 70 percent or more of

their financial support from the

Government; and—

(1) A long-term relationship is

contemplated;

(2) Most or all of the facilities are

owned or funded by the Government;

and

(3) The FFRDC has access to

Government and supplier data,

employees, and facilities beyond that

common in a normal contractual

relationship.

Final indirect cost rate means the

indirect cost rate established and agreed

upon by the Government and the

contractor as not subject to change. It is

usually established after the close of the

contractor’s fiscal year (unless the

parties decide upon a different period)

to which it applies. For costreimbursement research and

development contracts with educational

institutions, it may be predetermined;

that is, established for a future period on

the basis of cost experience with similar

contracts, together with supporting data.

First article means a preproduction

model, initial production sample, test

sample, first lot, pilot lot, or pilot

models.

First article testing means testing and

evaluating the first article for

conformance with specified contract

requirements before or in the initial

stage of production.

F.o.b. means free on board. This term

is used in conjunction with a physical

point to determine—

(1) The responsibility and basis for

payment of freight charges; and

(2) Unless otherwise agreed, the point

where title for goods passes to the buyer

or consignee.

F.o.b. destination means free on board

at destination; i.e., the seller or

consignor delivers the goods on seller’s

or consignor’s conveyance at

destination. Unless the contract

provides otherwise, the seller or

consignor is responsible for the cost of

shipping and risk of loss. For use in the

clause at 52.247–34, see the definition at

52.247–34(a).

F.o.b. origin means free on board at

origin; i.e., the seller or consignor places

the goods on the conveyance. Unless the

contract provides otherwise, the buyer

or consignee is responsible for the cost

of shipping and risk of loss. For use in

the clause at 52.247–29, see the

definition at 52.247–29(a).

F.o.b. * * * (For other types of F.o.b.,

see 47.303).

Forward pricing rate agreement

means a written agreement negotiated

between a contractor and the

Government to make certain rates

available during a specified period for

use in pricing contracts or

modifications. These rates represent

reasonable projections of specific costs

that are not easily estimated for,

identified with, or generated by a

specific contract, contract end item, or

task. These projections may include

rates for such things as labor, indirect

costs, material obsolescence and usage,

spare parts provisioning, and material

handling.

Forward pricing rate recommendation

means a rate set unilaterally by the

administrative contracting officer for

use by the Government in negotiations

or other contract actions when forward

pricing rate agreement negotiations have

not been completed or when the

contractor will not agree to a forward

pricing rate agreement.

Freight means supplies, goods, and

transportable property.

Full and open competition, when

used with respect to a contract action,

means that all responsible sources are

permitted to compete.

General and administrative (G&A)

expense means any management,

financial, and other expense which is

incurred by or allocated to a business

unit and which is for the general

management and administration of the

business unit as a whole. G&A expense

does not include those management

expenses whose beneficial or causal

relationship to cost objectives can be

more directly measured by a base other

than a cost input base representing the

total activity of a business unit during

a cost accounting period.

Head of the agency (see ‘‘agency

head’’).

Head of the contracting activity

includes the official who has overall

responsibility for managing the

contracting activity.

Historically black college or university

means an institution determined by the

Secretary of Education to meet the

requirements of 34 CFR 608.2. For the

Department of Defense, the National

Aeronautics and Space Administration,

Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations 2123

and the Coast Guard, the term also

includes any nonprofit research

institution that was an integral part of

such a college or university before

November 14, 1986.

HUBZone means a historically

underutilized business zone that is an

area located within one or more

qualified census tracts, qualified

nonmetropolitan counties, or lands

within the external boundaries of an

Indian reservation.

HUBZone small business concern

means a small business concern that

appears on the List of Qualified

HUBZone Small Business Concerns

maintained by the Small Business

Administration.

In writing, writing, or written means

any worded or numbered expression

that can be read, reproduced, and later

communicated, and includes

electronically transmitted and stored

information.

Indirect cost means any cost not

directly identified with a single, final

cost objective, but identified with two or

more final cost objectives or an

intermediate cost objective.

Indirect cost rate means the

percentage or dollar factor that

expresses the ratio of indirect expense

incurred in a given period to direct

labor cost, manufacturing cost, or

another appropriate base for the same

period (see also ‘‘final indirect cost

rate’’).

Ineligible means excluded from

Government contracting (and

subcontracting, if appropriate) pursuant

to statutory, Executive order, or

regulatory authority other than this

regulation (48 CFR chapter 1) and its

implementing and supplementing

regulations; for example, pursuant to the

Davis-Bacon Act and its related statutes

and implementing regulations, the

Service Contract Act, the Equal

Employment Opportunity Acts and

Executive orders, the Walsh-Healey

Public Contracts Act, the Buy American

Act, or the Environmental Protection

Acts and Executive orders.

Information other than cost or pricing

data means any type of information that

is not required to be certified in

accordance with 15.406–2 and is

necessary to determine price

reasonableness or cost realism. For

example, such information may include

pricing, sales, or cost information, and

includes cost or pricing data for which

certification is determined inapplicable

after submission.

Information technology means any

equipment, or interconnected system(s)

or subsystem(s) of equipment, that is

used in the automatic acquisition,

storage, manipulation, management,

movement, control, display, switching,

interchange, transmission, or reception

of data or information by the agency.

(1) For purposes of this definition,

equipment is used by an agency if the

equipment is used by the agency

directly or is used by a contractor under

a contract with the agency that

requires—

(i) Its use; or

(ii) To a significant extent, its use in

the performance of a service or the

furnishing of a product.

(2) The term ‘‘information

technology’’ includes computers,

ancillary equipment, software, firmware

and similar procedures, services

(including support services), and related

resources.

(3) The term ‘‘information

technology’’ does not include any

equipment that—

(i) Is acquired by a contractor

incidental to a contract; or

(ii) Contains imbedded information

technology that is used as an integral

part of the product, but the principal

function of which is not the acquisition,

storage, manipulation, management,

movement, control, display, switching,

interchange, transmission, or reception

of data or information. For example,

HVAC (heating, ventilation, and air

conditioning) equipment, such as

thermostats or temperature control

devices, and medical equipment where

information technology is integral to its

operation, are not information

technology.

Inherently governmental function

means, as a matter of policy, a function

that is so intimately related to the public

interest as to mandate performance by

Government employees. This definition

is a policy determination, not a legal

determination. An inherently

governmental function includes

activities that require either the exercise

of discretion in applying Government

authority, or the making of value

judgments in making decisions for the

Government. Governmental functions

normally fall into two categories: the act

of governing, i.e., the discretionary

exercise of Government authority, and

monetary transactions and entitlements.

(1) An inherently governmental

function involves, among other things,

the interpretation and execution of the

laws of the United States so as to—

(i) Bind the United States to take or

not to take some action by contract,

policy, regulation, authorization, order,

or otherwise;

(ii) Determine, protect, and advance

United States economic, political,

territorial, property, or other interests by

military or diplomatic action, civil or

criminal judicial proceedings, contract

management, or otherwise;

(iii) Significantly affect the life,

liberty, or property of private persons;

(iv) Commission, appoint, direct, or

control officers or employees of the

United States; or

(v) Exert ultimate control over the

acquisition, use, or disposition of the

property, real or personal, tangible or

intangible, of the United States,

including the collection, control, or

disbursement of Federal funds.

(2) Inherently governmental functions

do not normally include gathering

information for or providing advice,

opinions, recommendations, or ideas to

Government officials. They also do not

include functions that are primarily

ministerial and internal in nature, such

as building security, mail operations,

operation of cafeterias, housekeeping,

facilities operations and maintenance,

warehouse operations, motor vehicle

fleet management operations, or other

routine electrical or mechanical

services. The list of commercial

activities included in the attachment to

Office of Management and Budget

(OMB) Circular No. A–76 is an

authoritative, nonexclusive list of

functions that are not inherently

governmental functions.

Inspection means examining and

testing supplies or services (including,

when appropriate, raw materials,

components, and intermediate

assemblies) to determine whether they

conform to contract requirements.

Insurance means a contract that

provides that for a stipulated

consideration, one party undertakes to

indemnify another against loss, damage,

or liability arising from an unknown or

contingent event.

Invoice means a contractor’s bill or

written request for payment under the

contract for supplies delivered or

services performed (see also ‘‘proper

invoice’’).

Irrevocable letter of credit means a

written commitment by a federally

insured financial institution to pay all

or part of a stated amount of money,

until the expiration date of the letter,

upon the Government’s (the beneficiary)

presentation of a written demand for

payment. Neither the financial

institution nor the offeror/contractor can

revoke or condition the letter of credit.

Labor surplus area means a

geographical area identified by the

Department of Labor in accordance with

20 CFR part 654, subpart A, as an area

of concentrated unemployment or

underemployment or an area of labor

surplus.

Labor surplus area concern means a

concern that together with its first-tier

2124 Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations

subcontractors will perform

substantially in labor surplus areas.

Performance is substantially in labor

surplus areas if the costs incurred under

the contract on account of

manufacturing, production, or

performance of appropriate services in

labor surplus areas exceed 50 percent of

the contract price.

Latent defect means a defect that

exists at the time of acceptance but

cannot be discovered by a reasonable

inspection.

List of Parties Excluded from Federal

Procurement and Nonprocurement

Programs means a list compiled,

maintained, and distributed by the

General Services Administration

containing the names and other

information about parties debarred,

suspended, or voluntarily excluded

under the Nonprocurement Common

Rule or the Federal Acquisition

Regulation, parties who have been

proposed for debarment under the

Federal Acquisition Regulation, and

parties determined to be ineligible.

Major system means that combination

of elements that will function together

to produce the capabilities required to

fulfill a mission need. The elements

may include hardware, equipment,

software, or any combination thereof,

but exclude construction or other

improvements to real property. A

system is a major system if—

(1) The Department of Defense is

responsible for the system and the total

expenditures for research, development,

test, and evaluation for the system are

estimated to be more than $115,000,000

(based on fiscal year 1990 constant

dollars) or the eventual total

expenditure for the acquisition exceeds

$540,000,000 (based on fiscal year 1990

constant dollars);

(2) A civilian agency is responsible for

the system and total expenditures for

the system are estimated to exceed

$750,000 (based on fiscal year 1980

constant dollars) or the dollar threshold

for a ‘‘major system’’ established by the

agency pursuant to Office of

Management and Budget Circular A–

109, entitled ‘‘Major System

Acquisitions,’’ whichever is greater; or

(3) The system is designated a ‘‘major

system’’ by the head of the agency

responsible for the system (10 U.S.C.

2302 and 41 U.S.C. 403).

Make-or-buy program means that part

of a contractor’s written plan for a

contract identifying those major items to

be produced or work efforts to be

performed in the prime contractor’s

facilities and those to be subcontracted.

Market research means collecting and

analyzing information about capabilities

within the market to satisfy agency

needs.

Master solicitation means a document

containing special clauses and

provisions that have been identified as

essential for the acquisition of a specific

type of supply or service that is

acquired repetitively.

May denotes the permissive.

However, the words ‘‘no person may

* * *’’ mean that no person is required,

authorized, or permitted to do the act

described.

Micro-purchase means an acquisition

of supplies or services (except

construction), the aggregate amount of

which does not exceed $2,500, except

that in the case of construction, the limit

is $2,000.

Micro-purchase threshold means

$2,500.

Minority Institution means an

institution of higher education meeting

the requirements of section 1046(3) of

the Higher Education Act of 1965 (20

U.S.C. 1067k), including a Hispanicserving institution of higher education,

as defined in section 316(b)(1) of the Act

(20 U.S.C. 1101a).

Must (see ‘‘shall’’).

National defense means any activity

related to programs for military or

atomic energy production or

construction, military assistance to any

foreign nation, stockpiling, or space.

Neutral person means an impartial

third party, who serves as a mediator,

fact finder, or arbitrator, or otherwise

functions to assist the parties to resolve

the issues in controversy. A neutral

person may be a permanent or

temporary officer or employee of the

Federal Government or any other

individual who is acceptable to the

parties. A neutral person must have no

official, financial, or personal conflict of

interest with respect to the issues in

controversy, unless the interest is fully

disclosed in writing to all parties and all

parties agree that the neutral person

may serve (5 U.S.C. 583).

Nondevelopmental item means—

(1) Any previously developed item of

supply used exclusively for

governmental purposes by a Federal

agency, a State or local government, or

a foreign government with which the

United States has a mutual defense

cooperation agreement;

(2) Any item described in paragraph

(1) of this definition that requires only

minor modification or modifications of

a type customarily available in the

commercial marketplace in order to

meet the requirements of the procuring

department or agency; or

(3) Any item of supply being

produced that does not meet the

requirements of paragraphs (1) or (2)

solely because the item is not yet in use.

Novation agreement means a legal

instrument—

(1) Executed by the—

(i) Contractor (transferor);

(ii) Successor in interest (transferee);

and

(iii) Government; and

(2) By which, among other things, the

transferor guarantees performance of the

contract, the transferee assumes all

obligations under the contract, and the

Government recognizes the transfer of

the contract and related assets.

Offer means a response to a

solicitation that, if accepted, would bind

the offeror to perform the resultant

contract. Responses to invitations for

bids (sealed bidding) are offers called

‘‘bids’’ or ‘‘sealed bids’’ responses to

requests for proposals (negotiation) are

offers called ‘‘proposals’’ responses to

requests for quotations (negotiation) are

not offers and are called ‘‘quotes.’’ For

unsolicited proposals, see subpart 15.6.

Option means a unilateral right in a

contract by which, for a specified time,

the Government may elect to purchase

additional supplies or services called for

by the contract, or may elect to extend

the term of the contract.

Organizational conflict of interest

means that because of other activities or

relationships with other persons, a

person is unable or potentially unable to

render impartial assistance or advice to

the Government, or the person’s

objectivity in performing the contract

work is or might be otherwise impaired,

or a person has an unfair competitive

advantage.

Overtime means time worked by a

contractor’s employee in excess of the

employee’s normal workweek.

Overtime premium means the

difference between the contractor’s

regular rate of pay to an employee for

the shift involved and the higher rate

paid for overtime. It does not include

shift premium, i.e., the difference

between the contractor’s regular rate of

pay to an employee and the higher rate

paid for extra-pay-shift work.

Ozone-depleting substance means any

substance the Environmental Protection

Agency designates in 40 CFR part 82

as—

(1) Class I, including, but not limited

to, chlorofluorocarbons, halons, carbon

tetrachloride, and methyl chloroform; or

(2) Class II, including, but not limited

to, hydrochlorofluorocarbons.

Performance-based contracting means

structuring all aspects of an acquisition

around the purpose of the work to be

performed as opposed to either the

manner by which the work will be

Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations 2125

performed or broad and imprecise

statements of work.

Personal services contract means a

contract that, by its express terms or as

administered, makes the contractor

personnel appear to be, in effect,

Government employees (see 37.104).

Pollution prevention means any

practice that—

(1)(i) Reduces the amount of any

hazardous substance, pollutant, or

contaminant entering any waste stream

or otherwise released into the

environment (including fugitive

emissions) prior to recycling, treatment,

or disposal; and

(ii) Reduces the hazards to public

health and the environment associated

with the release of such substances,

pollutants, and contaminants;

(2) Reduces or eliminates the creation

of pollutants through increased

efficiency in the use of raw materials,

energy, water, or other resources; or

(3) Protects natural resources by

conservation.

Possessions include the Virgin

Islands, Johnston Island, American

Samoa, Guam, Wake Island, Midway

Island, and the Guano Islands, but does

not include Puerto Rico, leased bases, or

trust territories.

Power of attorney means the authority

given one person or corporation to act

for and obligate another, as specified in

the instrument creating the power; in

corporate suretyship, an instrument

under seal that appoints an attorney-infact to act in behalf of a surety company

in signing bonds (see also ‘‘attorney-infact’’ at 28.001).

Preaward survey means an evaluation

of a prospective contractor’s capability

to perform a proposed contract.

Preponderance of the evidence means

proof by information that, compared

with that opposing it, leads to the

conclusion that the fact at issue is more

probably true than not.

Pricing means the process of

establishing a reasonable amount or

amounts to be paid for supplies or

services.

Procurement (see ‘‘acquisition’’).

Procuring activity means a component

of an executive agency having a

significant acquisition function and

designated as such by the head of the

agency. Unless agency regulations

specify otherwise, the term ‘‘procuring

activity’’ is synonymous with

‘‘contracting activity.’’

Projected average loss means the

estimated long-term average loss per

period for periods of comparable

exposure to risk of loss.

Proper invoice means a bill or written

request for payment that meets the

minimum standards specified in the

clause at 52.232–25, Prompt Payment,

52.232–26, Prompt Payment for FixedPrice Architect-Engineer Contracts, or

52.232–27, Prompt Payment for

Construction Contracts (also see

32.905(e)), and other terms and

conditions contained in the contract for

invoice submission.

Purchase order, when issued by the

Government, means an offer by the

Government to buy supplies or services,

including construction and research and

development, upon specified terms and

conditions, using simplified acquisition

procedures.

Qualification requirement means a

Government requirement for testing or

other quality assurance demonstration

that must be completed before award of

a contract.

Qualified products list (QPL) means a

list of products that have been

examined, tested, and have satisfied all

applicable qualification requirements.

Recovered material means waste

materials and by-products recovered or

diverted from solid waste, but the term

does not include those materials and byproducts generated from, and commonly

reused within, an original

manufacturing process. For use in

subpart 11.3 for paper and paper

products, see the definition at 11.301.

Residual value means the proceeds,

less removal and disposal costs, if any,

realized upon disposition of a tangible

capital asset. It usually is measured by

the net proceeds from the sale or other

disposition of the asset, or its fair value

if the asset is traded in on another asset.

The estimated residual value is a

current forecast of the residual value.

Responsible audit agency means the

agency that is responsible for

performing all required contract audit

services at a business unit.

Responsible prospective contractor

means a contractor that meets the

standards in 9.104.

Segment means one of two or more

divisions, product departments, plants,

or other subdivisions of an organization

reporting directly to a home office,

usually identified with responsibility

for profit and/or producing a product or

service. The term includes—

(1) Government-owned contractoroperated (GOCO) facilities; and

(2) Joint ventures and subsidiaries

(domestic and foreign) in which the

organization has—

(i) A majority ownership; or

(ii) Less than a majority ownership,

but over which it exercises control.

Self-insurance means the assumption

or retention of the risk of loss by the

contractor, whether voluntarily or

involuntarily. Self-insurance includes

the deductible portion of purchased

insurance.

Senior procurement executive means

the individual appointed pursuant to

section 16(3) of the Office of Federal

Procurement Policy Act (41 U.S.C.

414(3)) who is responsible for

management direction of the acquisition

system of the executive agency,

including implementation of the unique

acquisition policies, regulations, and

standards of the executive agency.

Service-disabled veteran-owned small

business concern—

(1) Means a small business concern—

(i) Not less than 51 percent of which

is owned by one or more servicedisabled veterans or, in the case of any

publicly owned business, not less than

51 percent of the stock of which is

owned by one or more service-disabled

veterans; and

(ii) The management and daily

business operations of which are

controlled by one or more servicedisabled veterans or, in the case of a

veteran with permanent and severe

disability, the spouse or permanent

caregiver of such veteran.

(2) Service-disabled veteran means a

veteran, as defined in 38 U.S.C. 101(2),

with a disability that is serviceconnected, as defined in 38 U.S.C.

101(16).

Shall denotes the imperative.

Shipment means freight transported

or to be transported.

Shop drawings means drawings

submitted by the construction

contractor or a subcontractor at any tier

or required under a construction

contract, showing in detail either or

both of the following:

(1) The proposed fabrication and

assembly of structural elements.

(2) The installation (i.e., form, fit, and

attachment details) of materials or

equipment.

Should means an expected course of

action or policy that is to be followed

unless inappropriate for a particular

circumstance.

Signature or signed means the

discrete, verifiable symbol of an

individual which, when affixed to a

writing with the knowledge and consent

of the individual, indicates a present

intention to authenticate the writing.

This includes electronic symbols.

Simplified acquisition procedures

means the methods prescribed in part

13 for making purchases of supplies or

services.

Simplified acquisition threshold

means $100,000, except that in the case

of any contract to be awarded and

performed, or purchase to be made,

outside the United States in support of

a contingency operation (as defined in

2126 Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations

10 U.S.C. 101(a)(13)) or a humanitarian

or peacekeeping operation (as defined in

10 U.S.C. 2302(8) and 41 U.S.C. 259(d)),

the term means $200,000.

Single, Governmentwide point of

entry, means the one point of entry to

be designated by the Administrator of

OFPP that will allow the private sector

to electronically access procurement

opportunities Governmentwide.

Small business subcontractor means a

concern, including affiliates, that for

subcontracts valued at—

(1) $10,000 or less, does not have

more than 500 employees; and

(2) More than $10,000, does not have

employees or average annual receipts

exceeding the size standard in 13 CFR

part 121 (see 19.102) for the product or

service it is providing on the

subcontract.

Small disadvantaged business

concern (except for 52.212–3(c)(2) and

52.219–1(b)(2) for general statistical

purposes and 52.212–3(c)(7)(ii), 52.219–

22(b)(2), and 52.219–23(a) for joint

ventures under the price evaluation

adjustment for small disadvantaged

business concerns), means an offeror

that represents, as part of its offer, that

it is a small business under the size

standard applicable to the acquisition;

and either—

(1) It has received certification as a

small disadvantaged business concern

consistent with 13 CFR part 124,

subpart B; and

(i) No material change in

disadvantaged ownership and control

has occurred since its certification;

(ii) Where the concern is owned by

one or more disadvantaged individuals,

the net worth of each individual upon

whom the certification is based does not

exceed $750,000 after taking into

account the applicable exclusions set

forth at 13 CFR 124.104(c)(2); and

(iii) It is identified, on the date of its

representation, as a certified small

disadvantaged business concern in the

data base maintained by the Small

Business Administration (PRO–Net); or

(2) For a prime contractor, it has

submitted a completed application to

the Small Business Administration or a

private certifier to be certified as a small

disadvantaged business concern in

accordance with 13 CFR part 124,

subpart B, and a decision on that

application is pending, and that no

material change in disadvantaged

ownership and control has occurred

since it submitted its application. In this

case, a contractor must receive

certification as a small disadvantaged

business by the Small Business

Administration prior to contract award.

Sole source acquisition means a

contract for the purchase of supplies or

services that is entered into or proposed

to be entered into by an agency after

soliciting and negotiating with only one

source.

Solicitation provision or provision

means a term or condition used only in

solicitations and applying only before

contract award.

Special competency means a special

or unique capability, including

qualitative aspects, developed

incidental to the primary functions of

the Federally Funded Research and

Development Centers to meet some

special need.

State and local taxes means taxes

levied by the States, the District of

Columbia, Puerto Rico, possessions of

the United States, or their political

subdivisions.

Substantial evidence means

information sufficient to support the

reasonable belief that a particular act or

omission has occurred.

Substantially as follows or

substantially the same as, when used in

the prescription and introductory text of

a provision or clause, means that

authorization is granted to prepare and

utilize a variation of that provision or

clause to accommodate requirements

that are peculiar to an individual

acquisition; provided that the variation

includes the salient features of the FAR

provision or clause, and is not

inconsistent with the intent, principle,

and substance of the FAR provision or

clause or related coverage of the subject

matter.

Supplemental agreement means a

contract modification that is

accomplished by the mutual action of

the parties.

Supplies means all property except

land or interest in land. It includes (but

is not limited to) public works,

buildings, and facilities; ships, floating

equipment, and vessels of every

character, type, and description,

together with parts and accessories;

aircraft and aircraft parts, accessories,

and equipment; machine tools; and the

alteration or installation of any of the

foregoing.

Surety means an individual or

corporation legally liable for the debt,

default, or failure of a principal to

satisfy a contractual obligation. The

types of sureties referred to are as

follows:

(1) An individual surety is one

person, as distinguished from a business

entity, who is liable for the entire penal

amount of the bond.

(2) A corporate surety is licensed

under various insurance laws and,

under its charter, has legal power to act

as surety for others.

(3) A cosurety is one of two or more

sureties that are jointly liable for the

penal sum of the bond. A limit of

liability for each surety may be stated.

Suspension means action taken by a

suspending official under 9.407 to

disqualify a contractor temporarily from

Government contracting and

Government-approved subcontracting; a

contractor that is disqualified is

‘‘suspended.’’

Task order means an order for

services placed against an established

contract or with Government sources.

Taxpayer Identification Number (TIN)

means the number required by the IRS

to be used by the offeror in reporting

income tax and other returns. The TIN

may be either a Social Security Number

or an Employer Identification Number.

Unallowable cost means any cost that,

under the provisions of any pertinent

law, regulation, or contract, cannot be

included in prices, costreimbursements, or settlements under a

Government contract to which it is

allocable.

Unique and innovative concept, when

used relative to an unsolicited research

proposal, means that—

(1) In the opinion and to the

knowledge of the Government evaluator,

the meritorious proposal—

(i) Is the product of original thinking

submitted confidentially by one source;

(ii) Contains new, novel, or changed

concepts, approaches, or methods;

(iii) Was not submitted previously by

another; and

(iv) Is not otherwise available within

the Federal Government.

(2) In this context, the term does not

mean that the source has the sole

capability of performing the research.

United States, when used in a

geographic sense, means the 50 States

and the District of Columbia, except as

follows:

(1) For use in subpart 22.8, see the

definition at 22.801.

(2) For use in subpart 22.10, see the

definition at 22.1001.

(3) For use in part 25, see the

definition at 25.003.

(4) For use in subpart 47.4, see the

definition at 47.401.

Unsolicited proposal means a written

proposal for a new or innovative idea

that is submitted to an agency on the

initiative of the offeror for the purpose

of obtaining a contract with the

Government, and that is not in response

to a request for proposals, Broad Agency

Announcement, Small Business

Innovation Research topic, Small

Business Technology Transfer Research

topic, Program Research and

Development Announcement, or any

other Government-initiated solicitation

or program.

Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations 2127

Value engineering means an analysis

of the functions of a program, project,

system, product, item of equipment,

building, facility, service, or supply of

an executive agency, performed by

qualified agency or contractor

personnel, directed at improving

performance, reliability, quality, safety,

and life-cycle costs (section 36 of the

Office of Federal Procurement Policy

Act, 41 U.S.C. 401, et seq.). For use in

the clause at 52.248–2, see the

definition at 52.248–2(b).

Value engineering change proposal

(VECP)–(1) means a proposal that—

(i) Requires a change to the instant

contract to implement; and

(ii) Results in reducing the overall

projected cost to the agency without

impairing essential functions or

characteristics, provided that it does not

involve a change—

(A) In deliverable end item quantities

only;

(B) In research and development

(R&D) items or R&D test quantities that

are due solely to results of previous

testing under the instant contract; or

(C) To the contract type only.

(2) For use in the clauses at—

(i) 52.248–2, see the definition at

52.248–2(b); and

(ii) 52.248–3, see the definition at

52.248–3(b).

Veteran-owned small business

concern means a small business

concern—

(1) Not less than 51 percent of which

is owned by one or more veterans (as

defined at 38 U.S.C. 101(2)) or, in the

case of any publicly owned business,

not less than 51 percent of the stock of

which is owned by one or more

veterans; and

(2) The management and daily

business operations of which are

controlled by one or more veterans.

Virgin material means—

(1) Previously unused raw material,

including previously unused copper,

aluminum, lead, zinc, iron, other metal

or metal ore; or

(2) Any undeveloped resource that is,

or with new technology will become, a

source of raw materials.

Warranty means a promise or

affirmation given by a contractor to the

Government regarding the nature,

usefulness, or condition of the supplies

or performance of services furnished

under the contract.

Waste reduction means preventing or

decreasing the amount of waste being

generated through waste prevention,

recycling, or purchasing recycled and

environmentally preferable products.

Women-owned small business

concern means a small business

concern—

(1) That is at least 51 percent owned

by one or more women; or, in the case

of any publicly owned business, at least

51 percent of the stock of which is

owned by one or more women; and

(2) Whose management and daily

business operations are controlled by

one or more women.

Writing or written (see ‘‘in writing’’).

3c. Revise section 2.201 to read as

follows:

2.201 Contract clause.

Insert the clause at 52.202–1,

Definitions, in solicitations and

contracts that exceed the simplified

acquisition threshold. If the contract is

for personal services, construction,

architect-engineer services, or

dismantling, demolition, or removal of

improvements, use the clause with its

Alternate I. The contracting officer may

include additional definitions, provided

they are consistent with the clause and

the FAR.

PART 3—IMPROPER BUSINESS

PRACTICES AND PERSONAL

CONFLICTS OF INTEREST

4. In section 3.302, add an

introductory paragraph to read as

follows:

3.302 Definitions.

As used in this subpart—

* * * * *

5. Amend section 3.401 by adding an

introductory paragraph; and by

removing ‘‘, as used in this subpart,’’

from the definitions ‘‘Bona fide agency’’,

‘‘Bona fide employee’’, ‘‘Contingent

fee’’, and ‘‘Improper influence’’ by. The

added text reads as follows:

3.401 Definitions.

As used in this subpart—

* * * * *

6. In section 3.501–1, revise the

introductory paragraph; and redesignate

paragraphs (a) and (b) as (1) and (2),

respectively. The revised text reads as

follows:

3.501–1 Definition.

Buying-in, as used in this section,

means submitting an offer below

anticipated costs, expecting to—

* * * * *

7. Amend section 3.502–1 by adding

an introductory paragraph; removing ‘‘,

as used in this section,’’ from the

definitions ‘‘Kickback’’, ‘‘Person’’,

‘‘Prime contract’’, ‘‘Prime Contractor’’,

‘‘Prime Contractor employee’’, and

‘‘Subcontract’’; removing ‘‘, as used in

this section, ‘‘ from the definition

‘‘Subcontractor’’; and redesignating

paragraphs (a) and (b) as (1) and (2),

respectively. The added text reads as

follows:

3.502–1 Definitions.

As used in this section—

* * * * *

8. Add an introductory paragraph to

section 3.901 to read as follows:

3.901 Definitions.

As used in this subpart—

* * * * *

PART 4—ADMINISTRATIVE MATTERS

4.501 [Reserved]

9. Remove and reserve section 4.501.

4.901 Definition.

10. In section 4.901, revise the section

heading as set forth above; and remove

the definition ‘‘Taxpayer Identification

Number (TIN).’’

PART 5—PUBLICIZING CONTRACT

ACTIONS

5.202 [Amended]

11. In section 5.202, amend paragraph

(a)(8) by removing ‘‘6.003’’ and adding

‘‘2.101’’ in its place.

12. Amend section 5.501, by adding

an introductory paragraph; by removing

‘‘, as used in this subpart,’’ from the

definitions ‘‘Advertisement’’ and

‘‘Publication’’; and by redesignating

paragraphs (a) and (b) in the definition

‘‘Publication’’ as (1) and (2),

respectively. The added text reads as

follows:

5.501 Definitions.

As used in this subpart—

* * * * *

PART 6—COMPETITION

REQUIREMENTS

13. Revise section 6.000 to read as

follows:

6.000 Scope of part.

This part prescribes policies and

procedures to promote full and open

competition in the acquisition process

and to provide for full and open

competition, full and open competition

after exclusion of sources, other than

full and open competition, and

competition advocates. This part does

not deal with the results of competition

(e.g., adequate price competition), that

are addressed in other parts (e.g., part

15).

6.003 [Removed and Reserved]

14. Remove and reserve section 6.003.

2128 Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations

15. Amend section 6.302–1 by

revising paragraph (a)(2)(i)(A) to read as

follows:

6.302–1 Only one responsible source and

no other supplies or services will satisfy

agency requirements.

(a) * * *

(2) * * *

(i) * * *

(A) Demonstrates a unique and

innovative concept (see definition at

2.101), or, demonstrates a unique

capability of the source to provide the

particular research services proposed;

* * * * *

6.302–3 [Amended]

16. Amend section 6.302–3 in

paragraph (a)(2)(iii) by removing ‘‘(see

33.201)’’.

PART 7—ACQUISITION PLANNING

17. Amend section 7.101 by adding an

introductory paragraph; removing the

definitions ‘‘Acquisition planning’’ and

‘‘Design to cost’’; and by removing ‘‘, as

used in this subpart,’’ from the

definitions ‘‘Acquisition streamlining’’,

and ‘‘Planner’’. The added text reads as

follows:

7.101 Definitions.

As used in this subpart—

* * * * *

7.501 [Reserved]

18. Remove and reserve section 7.501.

PART 8—REQUIRED SOURCES OF

SUPPLIES AND SERVICES

19. In section 8.501, add an

introductory paragraph; and remove ‘‘,

as used in this subpart,’’ from the

definition ‘‘Bureau of Land

Management’’. The added text reads as

follows:

8.501 Definitions.

As used in this subpart—

* * * * *

20. In section 8.701, add an

introductory paragraph; and amend the

definitions ‘‘Allocation’’, ‘‘Central

nonprofit agency’’, ‘‘Committee’’, and

‘‘Procurement List’’ by removing ‘‘, as

used in this subpart,’’. The added text

reads as follows:

8.701 Definitions.

As used in this subpart—

* * * * *

21. Amend section 8.801 by adding an

introductory paragraph; and ’’ removing

‘‘, as used in this subpart,’’ from the

definition ‘‘Related supplies’’. The

added text reads as follows:

8.801 Definitions.

As used in this subpart—

* * * * *

22. Amend section 8.1101 by adding

an introductory paragraph; removing

from the definition ‘‘Leasing’’ ‘‘, as used

in this subpart,’’; and redesignating

paragraphs (a) and (b) in the definition

‘‘Motor vehicle’’ as (1) and (2),

respectively. The added text reads as

follows:

8.1101 Definitions.

As used in this subpart—

* * * * *

PART 9—CONTRACTOR

QUALIFICATIONS

9.101 [Amended]

23. Amend section 9.101 by revising

the section heading to read

‘‘Definition’’; by removing the

definitions ‘‘Preaward survey’’ and

‘‘Responsible prospective contractor’’;

and by adding ‘‘, as used in this

subpart,’’ after the word ‘‘activity’’ in

the definition ‘‘Surveying activity.’’

24. Amend section 9.201 by adding an

introductory paragraph; and by

removing the definitions ‘‘Procuring

activity’’, ‘‘Qualification requirement’’,

and ‘‘Qualified products list (QPL).’’

The added text reads as follows:

9.201 Definitions.

As used in this subpart—

* * * * *

9.301 Definition.

25. Amend section 9.301 by revising

the section heading to read as set forth

above; and by removing the definitions

‘‘First article’’ and ‘‘First article testing.’’

9.400 [Amended]

26. Amend section 9.400 in paragraph

(a)(2) by removing ‘‘9.403’’ and adding

‘‘2.101’’ in its place.

27. Amend section 9.403 as follows:

a. Add an introductory paragraph;

b. Remove the definitions ‘‘Adequate

evidence’’, ‘‘Conviction’’, ‘‘Debarment’’,

‘‘Ineligible’’, ‘‘List of Parties Excluded

from Federal Procurement and

Nonprocurement

Programs’’, ‘‘Preponderance of the

evidence’’, and ‘‘Suspension’’;

c. In the definitions ‘‘Affiliates’’,

‘‘Contractor’’, ‘‘Debarring official’’, and

‘‘Suspending official’’, redesignate

paragraphs (a) and (b) as (1) and (2),

respectively;

d. Amend the definitions ‘‘Agency’’,

‘‘Contractor’’, and ‘‘Unfair trade

practices’’ by removing ‘‘, as used in this

subpart,’’ and

e. In the definition ‘‘Indictment’’

remove ‘‘shall be’’ and add ‘‘is’’ in its

place.

The added text reads as follows:

9.403 Definitions.

As used in this subpart—

* * * * *

9.501 Definition.

28. Amend section 9.501 as follows:

a. Revise the section heading as set

forth above;

b. In the definition ‘‘Marketing

consultant’’ remove ‘‘means’’ and add

‘‘, as used in this subpart, means’’ in its

place; and redesignate paragraphs (a)

through (d) as (1) through (4),

respectively; and

c. Remove the definition

‘‘Organizational conflict of interest’’.

9.601 [Amended]

29. Amend section 9.601 in the

definition ‘‘Contractor team

arrangement’’ by adding ‘‘, as used in

this subpart,’’ after the word

‘‘arrangement’’ the first time it is used;

and by redesignating paragraphs (a) and

(b) as (1) and (2), respectively.

9.701 [Amended]

30. Amend section 9.701 by

redesignating paragraphs (a) and (b) as

(1) and (2), respectively, and paragraphs

(c) introductory text, (c)(1), and (c)(2) as

(3), (3)(i), and (3)(ii), respectively.

PART 11—DESCRIBING AGENCY

NEEDS

31. Amend section 11.601 by adding

an introductory paragraph; and by

removing ‘‘, as used in this subpart,’’

from the definitions ‘‘Authorized

program’’, ‘‘Controlled materials’’, and

‘‘Delegate Agency’’. The added text

reads as follows:

11.601 Definitions.

As used in this subpart—

* * * * *

PART 13—SIMPLIFIED ACQUISITION

PROCEDURES

13.001 [Amended]

32. Amend section 13.001 by

removing the definition ‘‘Purchase

order’’.

13.501 [Amended]

33. Amend section 13.501 in

paragraph (a)(1)(i) by removing ‘‘6.003’’

and adding ‘‘2.101’’ in its place.

PART 14—SEALED BIDDING

34. Revise section 14.203–3 to read as

follows:

Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations 2129

14.203–3 Master solicitation.

The master solicitation is provided to

potential sources who are requested to

retain it for continued and repetitive

use. Individual solicitations must

reference the date of the current master

solicitation and identify any changes.

The contracting officer must—

(a) Make available copies of the

master solicitation on request; and

(b) Provide the cognizant contract

administration activity a current copy of

the master solicitation.

PART 15—CONTRACTING BY

NEGOTIATION

35. Amend section 15.001 by adding,

in alphabetical order, the definitions

‘‘Deficiency’’ and ‘‘Weakness’’ to read as

follows:

15.001 Definitions.

Deficiency is a material failure of a

proposal to meet a Government

requirement or a combination of

significant weaknesses in a proposal

that increases the risk of unsuccessful

contract performance to an unacceptable

level.

* * * * *

Weakness means a flaw in the

proposal that increases the risk of

unsuccessful contract performance. A

‘‘significant weakness’’ in the proposal

is a flaw that appreciably increases the

risk of unsuccessful contract

performance.

15.301 [Reserved]

36. Remove and reserve section

15.301.

37. Amend section 15.401 as follows:

a. Add an introductory paragraph;

b. Remove the definitions ‘‘Cost or

pricing data’’, ‘‘Cost realism’’, ‘‘Forward

pricing rate agreement’’, ‘‘Forward

pricing rate recommendation’’, and

‘‘Information other than cost or pricing

data’’; and

c. Remove ‘‘, as used in this subpart,’’

from the definitions ‘‘Price’’ and

‘‘Subcontract’’. The added text reads as

follows:

15.401 Definitions.

As used in this subpart—

* * * * *

15.402 [Amended]

38. Amend section 15.402 as follows:

a. In the introductory paragraph

remove ‘‘shall’’ and add ‘‘must’’ in its

place;

b. In the introductory text of

paragraph (a) remove ‘‘shall’’ each time

it is used (twice) and add ‘‘must’’ in its

place;

c. In paragraph (a)(2)(ii) remove

‘‘15.401’’ and add ‘‘2.101’’ in its place;

and

d. In paragraph (a)(3), second

sentence, remove ‘‘shall’’ and add

‘‘must’’ in its place.

15.403–1 [Amended]

39. Amend section 15.403–1 in the

first sentence of paragraph (c)(3) by

removing ‘‘(c)(1) or (2)’’ and adding

‘‘(3)(i) or (ii)’’ in its place.

15.403–4 [Amended]

40. Amend section 15.403–4 in

paragraph (c) by removing ‘‘shall’’ each

time it is used (twice) and adding

‘‘must’’ in its place; and by removing

‘‘15.401’’ and adding ‘‘2.101’’ in its

place.

15.406–2 [Amended]

41. Amend section 15.406–2

paragraph (a) by removing ‘‘shall’’ each

time it is used (twice) and adding

‘‘must’’ in its place; and by removing

from the first sentence of the Certificate

of Current Cost or Pricing Data ‘‘15.401’’

and adding ‘‘2.101’’ in its place.

42. Amend section 15.407–2 by

revising paragraph (b) to read as follows:

15.407–2 Make-or-buy programs.

* * * * *

(b) Definition. Make item, as used in

this subsection, means an item or work

effort to be produced or performed by

the prime contractor or its affiliates,

subsidiaries, or divisions.

* * * * *

15.408 [Amended]

43. In section 15.408, amend Table

15–2, which follows paragraph (m)(4),

by adding a comma after the word

‘‘title’’ in paragraph A. (11) of the

General Instructions; and by removing

from paragraph C. ‘‘15.401’’ and adding

‘‘2.101’’ in its place.

15.601 [Amended]

44. Amend section 15.601 by

removing the definition ‘‘Unsolicited

proposal.’’

15.604 [Amended]

45. Amend section 15.604 in the

introductory text of paragraph (a),

second sentence, by removing ‘‘shall’’

and adding ‘‘must’’ in its place; and in

paragraph (a)(1) by removing ‘‘15.601’’

and adding ‘‘2.101’’ in its place.

PART 17—SPECIAL CONTRACTING

METHODS

17.103 [Amended]

46. Amend section 17.103 in the

definition ‘‘Cancellation’’ by

redesignating paragraphs (a) and (b) as

(1) and (2), respectively.

17.201 [Reserved]

47. Remove and reserve section

17.201.

17.501 [Amended]

48. In section 17.501, add ‘‘, as used

in this subpart,’’ after the word

‘‘acquisition’’.

PART 19—SMALL BUSINESS

PROGRAMS

49. Amend section 19.001 as follows:

a. Add an introductory paragraph;

b. In the definitions ‘‘Concern’’, ‘‘Fair

market price’’, and ‘‘Industry’’ remove ‘‘,

as used in this part,’’; and

c. Remove the definitions

‘‘HUBZone’’, ‘‘HUBZone small business

concern’’, ‘‘Labor surplus area’’, ‘‘Labor

surplus area concern’’, ‘‘Small

disadvantaged business concern’’, and

‘‘Women-owned small business

concern’’. The added text reads as

follows:

19.001 Definitions.

As used in this part—

* * * * *

50. Amend section 19.101 as follows:

a. Add an introductory paragraph;

b. In the definition of ‘‘Affiliates’’—

• Remove ‘‘As used in this subpart,

business’’ and add ‘‘Business’’ in its

place;

• Redesignate paragraphs (a) through

(g) as (1) through (7), respectively;

• In the newly designated paragraph

(3), redesignate paragraphs (1) through

(3) as (i) through (iii), respectively;

• In the newly designated paragraph

(6), redesignate paragraphs (1) through

(3) as (i) through (iii), respectively;

• In the newly designated paragraph

(7), redesignate paragraphs (1) through

(5) as (i) through (v), respectively;

• In the newly designated paragraph

(7)(i) redesignate paragraphs (i) and (ii)

as (A) and (B), respectively;

• In the newly designated paragraph

(7)(i)(B), redesignate paragraphs (A) and

(B) as (1) and (2), respectively; and

• In the newly designated paragraph

(7)(v), remove ‘‘(g)(1)(i) and (ii)’’ and

add ‘‘(7)(i)(A) and (B)’’ in its place; and

c. In the definition ‘‘Annual receipts’’,

redesignate paragraphs (1) and (2) as (i)

and (ii), respectively; redesignate

paragraphs (a) and (b) as (1) and (2),

respectively; and in the newly

designated paragraph (2) remove

‘‘paragraph (a) above’’ and add

‘‘paragraph (1) of this definition’’ in its

place. The added text reads as follows:

2130 Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations

19.101 Explanation of terms.

As used in this subpart—

* * * * *

51. In section 19.701, add an

introductory paragraph; and remove the

definition ‘‘Small business

subcontractor’’. The added text reads as

follows:

19.701 Definitions.

As used in this subpart—

* * * * *

19.703 [Amended]

52. Amend section 19.703 in

paragraph (a)(1) by removing ‘‘in 2.101

or 19.001’’ and adding ‘‘(see 2.101 and

19.001)’’ in its place.

53. Amend section 19.902 by revising

the section heading and the

introductory paragraph to read as

follows:

19.902 Designated SBA district.

A designated SBA district is the

geographic area served by any of the

following SBA district offices:

* * * * *

PART 22—APPLICATION OF LABOR

LAWS TO GOVERNMENT

ACQUISITIONS

22.103–1 Definition.

54. Amend section 22.103–1 by

revising the section heading to read as

set forth above; in the definition

‘‘Normal workweek’’ by redesignating

paragraphs (a) and (b) as (1) and (2),

respectively; and by removing the

definitions ‘‘Overtime’’, ‘‘Overtime

premium’’, and ‘‘Shift premium’’.

55. Amend section 22.401 as follows:

a. Add a new introductory paragraph;

b. Remove ‘‘, as used in this subpart,’’

from the definitions ‘‘Building’’ or

‘‘work’’, ‘‘Construction, alteration, or

repair’’, ‘‘Public building’’ or ‘‘public

work’’, and ‘‘Wages’’.

c. Amend the definition ‘‘Laborers or

mechanics’’ as follows—

• Remove ‘‘, as used in this subpart,’’;

• Redesignate paragraphs (a) through

(d) as (1) through (4), respectively;

• In the newly designated paragraph

(2), redesignate paragraphs (1) and (2) as

(i) and (ii), respectively; and redesignate

paragraphs (i) and (ii) as (A) and (B),

respectively; and

• In the newly designated paragraph

(4), remove ‘‘paragraph (c)’’ and add

‘‘paragraph (3)’’ in its place; and

d. Amend the definition ‘‘Site of the

work’’ as follows:

• Remove ‘‘, as used in this subpart,’’;

• Redesignate paragraphs (a) through

(c) as (1) through (3), respectively;

• In the newly designated paragraph

(1), remove ‘‘paragraph (b)’’ and add

‘‘paragraph (2)’’ in its place; and

• In the newly designated paragraph

(2), remove ‘‘paragraph (c)’’ and add

‘‘paragraph (3)’’ in its place. The added

text reads as follows:

22.401 Definitions.

As used in this subpart—

* * * * *

56. Amend section 22.1001 by adding

an introductory paragraph; revising the

definition ‘‘Act or Service Contract

Act’’; and removing ‘‘, as used in this

subpart,’’ from the definitions

‘‘Contractor’’, ‘‘Multiple year contracts’’,

‘‘Notice’’, ‘‘Service contract’’, and

‘‘United States’’. The added and revised

text reads as follows:

22.1001 Definitions.

As used in this subpart—

Act or Service Contract Act means the

Service Contract Act of 1965.

* * * * *

22.1102 [Amended]

57. In the first sentence of section

22.1102, add ‘‘, as used in this subpart,’’

after ‘‘Professional employee’’.

58. Amend section 22.1202, by adding

an introductory paragraph; and

removing ‘‘as used in this subpart,’’

from the definitions ‘‘Building service

contract’’, ‘‘Public building’’ and

‘‘Service employee’’. The added text

reads as follows:

22.1202 Definitions.

As used in this subpart—

* * * * *

PART 23—ENVIRONMENT,

CONSERVATION, OCCUPATIONAL

SAFETY, AND DRUG-FREE

WORKPLACE

59. Amend section 23.503 by adding

an introductory paragraph; removing ‘‘,

as used in this subpart,’’ from the

definition ‘‘Controlled substance’’; and

removing the definition ‘‘Drug-free

workplace’’. The added text reads as

follows:

23.503 Definitions.

As used in this subpart—

* * * * *

23.802 [Reserved]

60. Remove and reserve section

23.802.

23.904 [Amended]

61. In section 23.904, add ‘‘, as used

in this subpart,’’ after ‘‘Toxic

chemicals’’.

PART 24—PROTECTION OF PRIVACY

AND FREEDOM OF INFORMATION

62. Amend section 24.101 by adding

an introductory paragraph; and by

removing ‘‘, as used in this subpart,’’

from the definitions ‘‘Agency’’,

‘‘Individual’’, ‘‘Maintain’’, ‘‘Operation of

a system of records’’, ‘‘Record’’, and

‘‘System of records on individuals’’. The

added text reads as follows:

24.101 Definitions.

As used in this subpart—

* * * * *

PART 26—OTHER SOCIOECONOMIC

PROGRAMS

26.301 [Reserved]

63. Remove and reserve section

26.301.

PART 27—PATENTS, DATA, AND

COPY RIGHTS

64. Amend section 27.301 by adding

an introductory paragraph; and by

removing ‘‘, as used in this subpart,’’

from the definitions ‘‘Invention’’,

‘‘Made’’, ‘‘Nonprofit organization’’,

‘‘Practical application’’, ‘‘Small business

firm’’, and ‘‘Subject invention’’. The

added text reads as follows:

27.301 Definitions.

As used in this subpart—

* * * * *

65. Amend section 27.401 by adding

an introductory paragraph; removing the

definition ‘‘Computer software’’; and

removing ‘‘, as used in this subpart,’’

from the definitions ‘‘Data’’, ‘‘Form, fit,

and function data’’, ‘‘Limited rights’’,

‘‘Limited rights data’’ (both definitions),

‘‘Restricted computer software’’,

‘‘Restricted rights’’, ‘‘Technical data’’,

and ‘‘Unlimited rights’’. The added text

reads as follows:

27.401 Definitions.

As used in this subpart—

* * * * *

PART 28—BONDS AND INSURANCE

66. Amend section 28.001 as follows:

a. Add an introductory paragraph;

b. Remove ‘‘, as used in this part,’’

from the definition ‘‘Attorney-in-fact’’;

and in the parenthetical add ‘‘at 2.101’’

after the word ‘‘attorney’’;

c. In the definition ‘‘Bid guarantee’’,

redesignate paragraphs (a) and (b) as (1)

and (2), respectively;

d. In the definition ‘‘Bond’’,

redesignate paragraphs (a) through (f) as

(1) through (6), respectively; and

e. Remove the definitions

‘‘Insurance’’, ‘‘Irrevocable letter of credit

Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations 2131

(ILC)’’, ‘‘Power of attorney’’, and

‘‘Surety’’. The added text reads as

follows:

28.001 Definitions.

As used in this part—

* * * * *

28.308 [Amended]

67. Amend section 28.308 in the first

sentence of paragraph (a) by removing

‘‘(see 31.001)’’.

PART 29—TAXES

29.301 [Reserved]

68. Remove and reserve section

29.301.

PART 31—CONTRACT COST

PRINCIPLES AND PROCEDURES

69. Amend section 31.001 as follows:

a. Add an introductory paragraph;

b. Revise the definition ‘‘Actual

costs’’;

c. In the definition ‘‘Actuarial cost

method’’, remove ‘‘that uses’’ and add

‘‘which uses’’, in its place;

d. Remove the definition ‘‘Business

unit’’;

e. Revise the definitions ‘‘Cost

objective’’ and ‘‘Final cost objective’’;

f. Remove ‘‘, as used in this part,’’

from the definition ‘‘Fiscal year’’;

g. Remove the definition ‘‘General and

administrative (G&A) expense’’;

h. Revise the definition ‘‘Indirect cost

pools’’;

i. Remove ‘‘, as used in this part’’ from

the definitions ‘‘Job’’; Job class of

employees’’; and ‘‘Labor market’’;

j. Remove the definition ‘‘Pricing’’;

k. Revise the definition ‘‘Profit

center’’; and

l. Remove the definitions ‘‘Projected

average loss’’, ‘‘Residual value’’,

‘‘Segment’’, ‘‘Self-insurance’’, and

‘‘Unallowable cost’’.

The added text reads as follows:

31.001 Definitions.

As used in this part—

* * * * *

Actual costs means (except for

subpart 31.6) amounts determined on

the basis of costs incurred, as

distinguished from forecasted costs.

Actual costs include standard costs

properly adjusted for applicable

variances.

* * * * *

Cost objective means (except for

subpart 31.6) a function, organizational

subdivision, contract, or other work unit

for which cost data are desired and for

which provision is made to accumulate

and measure the cost of processes,

products, jobs, capitalized projects, etc.

* * * * *

Final cost objective means (except for

subparts 31.3 and 31.6) a cost objective

that has allocated to it both direct and

indirect costs and, in the contractors

accumulation system, is one of the final

accumulation points.

* * * * *

Indirect cost pools means (except for

subparts 31.3 and 31.6) groupings of

incurred costs identified with two or

more cost objectives but not identified

specifically with any final cost

objective.

* * * * *

Profit center means (except for

subparts 31.3 and 31.6) the smallest

organizationally independent segment

of a company charged by management

with profit and loss responsibilities.

* * * * *

70. Amend section 31.205–17 as

follows:

a. Add an introductory paragraph;

b. Remove the paragraph designation

from paragraph ‘‘(a)’’;

c. Redesignate paragraphs (b) through

(d) as (1) through (3), respectively; and

in newly designated paragraph (1),

redesignate paragraphs (1) and (2) as (i)

and (ii), respectively; and

d. Remove ‘‘, as used in this

subsection,’’ from the definitions ‘‘Costs

of idle facilities or idle capacity’’,

‘‘Facilities’’, ‘‘Idle capacity’’, and ‘‘Idle

facilities’’;. The added text reads as

follows:

31.205–17 Idle facilities and idle capacity

costs.

As used in this subsection—

* * * * *

71. Amend section 31.205–18 in the

heading of paragraph (a) by adding ‘‘As

used in this subsection—’’ after the

word ‘‘Definitions.’’; removing ‘‘, as

used in this subsection,’’ from the

definitions ‘‘Applied research’’, ‘‘Bid

and proposal (B&P) costs’’, ‘‘Company’’,

‘‘Development’’, ‘‘Independent research

and development (IR&D)’’ and ‘‘Systems

and other concept formulation studies’’;

and revising the definition ‘‘Basic

research’’ to read as follows:

31.205–18 Independent research and

development and bid and proposal costs.

(a) * * *

Basic research (see 2.101).

* * * * *

31.205–32 [Amended]

72. Amend section 31.205–32 in the

first sentence by removing ‘‘are those’’

and adding ‘‘means costs’’ in its place;

and in the second sentence by removing

‘‘Such’’ and adding ‘‘These’’ in its place.

31.205–33 [Amended]

73. Amend section 31.205–33 in the

first sentence of paragraph (a) by

removing ‘‘subpart, are’’ and adding

‘‘subsection, means’’ in its place.

31.205–39 [Amended]

74. Amend the second sentence of

section 31.205–39 by removing the word

‘‘such’’.

31.205–47 [Amended]

75. Amend section 31.205–47 in the

heading of paragraph (a) by adding ‘‘As

used in this subpart—’’ after

‘‘Definitions.’’, and by removing the

definition ‘‘Conviction’’; and in

paragraph (f)(5) by redesignating

paragraphs (i) & (ii) as (A) and (B), and

(1) and (2) as (i) and (ii), respectively.

The added text reads as follows:

31.205–47 Costs related to legal and other

proceedings.

(a) Definitions. As used in this

subpart—

* * * * *

PART 32—CONTRACT FINANCING

76. Amend section 32.001 by adding

an introductory paragraph; adding, in

alphabetical order, the definitions

‘‘Commercial interim payment’’,

‘‘Delivery payment’’, and ‘‘Due date’’;

and removing ‘‘, as used in this part,’’

from the definition ‘‘Contract action’’.

The added text reads as follows:

32.001 Definitions.

As used in this part—

Commercial interim payment means

any payment that is not a commercial

advance payment or a delivery payment.

These payments are contract financing

payments for prompt payment purposes

(i.e., not subject to the interest penalty

provisions of the Prompt Payment Act

in accordance with subpart 32.9). A

commercial interim payment is given to

the contractor after some work has been

done, whereas a commercial advance

payment is given to the contractor when

no work has been done.

* * * * *

Delivery payment means a payment

for accepted supplies or services,

including payments for accepted partial

deliveries. Commercial financing

payments are liquidated by deduction

from these payments. Delivery

payments are invoice payments for

prompt payment purposes.

Due date means the date on which

payment should be made.

* * * * *

2132 Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations

32.006–2 Definition.

77. Amend section 32.006–2 by

revising the section heading

to read as set forth above; by removing

the introductory paragraph; by adding ‘‘,

as used in this section,’’ after the word

‘‘official’’ in the definition ‘‘Remedy

coordination official’’; and by removing

the definition ‘‘Substantial evidence’’.

32.113 [Amended]

78. Amend section 32.113 in

paragraph (e) by removing ‘‘part 6’’ and

adding ‘‘2.101’’ in its place.

79. Amend section 32.202–2, by

revising the first sentence in the

definition ‘‘Commercial advance

payment’’; and by revising the

definitions ‘‘Commercial interim

payment’’ and ‘‘Delivery payment’’ to

read as follows:

32.202–2 Types of payments for

commercial item purchases.

* * * * *

Commercial advance payment, as

used in this subsection, means a

payment made before any performance

of work under the contract. * * *

Commercial interim payment (see

32.001).

Delivery payment (see 32.001).

32.202–3 [Amended]

80. Amend section 32.202–3 in

paragraphs (d) and (e) by removing

‘‘32.202–2’’ and adding ‘‘32.001’’ in its

place.

81. Amend section 32.301 by adding

an introductory paragraph; and by

removing ‘‘, as used in this subpart,’’

from the definitions ‘‘Borrower’’,

‘‘Guaranteed loan’’ or ‘‘V loan’’, and

‘‘Guaranteeing agency’’. The added text

reads as follows:

32.301 Definitions.

As used in this subpart—

* * * * *

32.801 [Amended]

82. Amend section 32.801 by

removing the definition ‘‘Assignment of

claims’’.

83. Amend section 32.902 by adding

an introductory paragraph; removing ‘‘,

as used in this subpart,’’ from the

definitions ‘‘Contract financing

payment’’, ‘‘Day’’, ‘‘Designated billing

office,’’ and ‘‘Invoice payment’’; by

removing the definitions ‘‘Due date’’,

‘‘Invoice’’, and ‘‘Proper invoice’’; and by

removing ‘‘which’’ from the definition

‘‘Specified payment date’’ the first time

it appears and adding ‘‘that’’ in its

place. The added text reads as follows:

32.902 Definitions.

As used in this subpart—

* * * * *

84. Amend section 32.1102 as follows:

a. Add an introductory paragraph;

b. Remove the definition ‘‘Electronic

Funds Transfer’’;

c. Remove from the definition ‘‘EFT

information’’ ‘‘EFT information’’ and

add ‘‘Electronic Funds Transfer

information (EFT)’’ in its place; and

d. Remove ‘‘, as used in this part,’’

from the definition ‘‘Governmentwide

commercial purchase card’’. The added

text reads as follows:

32.1102 Definitions.

As used in this subpart—

* * * * *

PART 33—PROTESTS, DISPUTES,

AND APPEALS

85. Amend section 33.101 as follows:

a. Add an introductory paragraph;

b. In the definition ‘‘Day’’ redesignate

paragraphs (a) and (b) as (1) and (2),

respectively; and in the newly

designated paragraph (2), redesignate

paragraphs (1) and (2) as (i) and (ii),

respectively;

c. Remove ‘‘, as used in this subpart,’’

from the definitions ‘‘Day’’, ‘‘Filed’’, and

‘‘Interested party for the purpose of

filing a protest’’; and

d. Remove ‘‘, as used in this subpart,’’

from the definition ‘‘Protest’’ and

redesignate paragraphs (a) through (d),

as (1) through (4), respectively. The

added text reads as follows:

33.101 Definitions.

As used in this subpart—

* * * * *

86. Amend section 33.201 as follows:

a. Add an introductory paragraph;

b. Revise the first sentence of the

definition ‘‘Accrual of a claim’’;

c. Remove ‘‘as used in this subpart,’’

from the definitions ‘‘Claim’’ and

‘‘Defective certification’’;

d. Remove ‘‘, as used in this part,’’

from the definition ‘‘Misrepresentation

of fact’’;

e. In the introductory paragraph of the

definition ‘‘Issue in controversy’’

remove ‘‘which’’ and add ‘‘that’’ in its

place; and

f. Remove the definition ‘‘Neutral

person’’.

The added and revised text reads as

follows:

33.201 Definitions.

As used in this subpart—

Accrual of a claim means the date

when all events, that fix the alleged

liability of either the Government or the

contractor and permit assertion of the

claim, were known or should have been

known. * * *

* * * * *

PART 34—MAJOR SYSTEM

ACQUISITION

34.001 [Amended]

87. Amend section 34.001 in the

definition ‘‘Effective competition’’ by

removing ‘‘which’’ and adding ‘‘that’’

(twice) in its place.

34.101 [Amended]

88. Amend section 34.101 in the

definition ‘‘Item of supply’’ by removing

‘‘for the purpose of’’ and adding ‘‘as

used in’’ in its place.

PART 35—RESEARCH AND

DEVELOPMENT CONTRACTING

35.001 [Amended]

89. Amend section 35.001 by

removing the definitions ‘‘Basic

research’’, ‘‘Broad agency

announcement’’, ‘‘Cost sharing’’, and

‘‘Federally Funded Research and

Development Centers (FFRDC’s)’’.

90. Amend section 35.017 in

paragraph (b) by adding an introductory

paragraph; by removing ‘‘, as used in

this section,’’ from the definitions

‘‘Nonsponsor’’ and ‘‘Primary sponsor’’;

and by removing the definition ‘‘Special

competency’’. The added text reads as

follows:

35.017 Federally Funded Research and

Development Centers.

* * * * *

(b) Definitions. As used in this

section—

* * * * *

PART 36—CONSTRUCTION AND

ARCHITECT-ENGINEER CONTRACTS

91. Amend section 36.102 as follows:

a. Add an introductory paragraph;

b. Remove ‘‘, as used in this part’’

from the definitions ‘‘Contract’’,

‘‘Design’’, ‘‘Design-bid-build’’, ‘‘Designbuild’’, ‘‘Firm’’, ‘‘Plans and

specifications’’, ‘‘Record drawings’’, and

‘‘Two-phase design-build selection

procedures’’; and

c. Remove the definitions ‘‘Architectengineer services’’, ‘‘As-built drawings’’,

and ‘‘Shop drawings’’.

36.102 Definitions.

As used in this part—

* * * * *

36.601–3 [Amended]

92. Amend section 36.601–3 in

paragraph (d) by removing ‘‘36.102’’ and

adding ‘‘2.101’’ in its place.

Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations 2133

PART 37—SERVICE CONTRACTING

93. Amend section 37.101 by adding

an introductory paragraph; by removing

the definitions ‘‘Performance-based

contracting’’ and ‘‘Personal services

contract’’; and in the definition ‘‘Service

contract’’ by redesignating paragraphs

(a) through (i) as (1) through (9),

respectively. The added text reads as

follows:

37.101 Definitions.

As used in this part—

* * * * *

37.103 [Amended]

94. Amend section 37.103 in

paragraph (a)(1) by removing ‘‘in

37.101’’ and adding ‘‘at 2.101 and

37.101’’ in its place.

37.104 [Amended]

95. Amend section 37.104 in the first

sentence of paragraph (a) by removing

‘‘As indicated in 37.101, a’’ and adding

‘‘A’’ in its place.

37.201 [Amended]

96. Amend section 37.201 by

removing ‘‘, as used in this subpart,’’

from the definition ‘‘Covered

personnel’’; and by redesignating

paragraphs (a)(1) through (a)(6) as (a)(i)

through (a)(vi), paragraphs (a) through

(c) as (1) through (3), respectively.

37.502 [Amended]

97. Amend section 37.502 in

paragraph (a)(3) by removing ‘‘36.102’’

and adding ‘‘2.101’’ in its place.

PART 39—ACQUISITION OF

INFORMATION TECHNOLOGY

98. Amend section 39.002 as follows:

a. Add an introductory paragraph;

b. Remove ‘‘, as used in this part,’’

from the definitions ‘‘Modular

contracting’’ and ‘‘National security

system’’;

c. In the definition ‘‘National security

system’’, redesignate paragraphs (a)

through (e) as (1) through (5),

respectively; and

d. In the definition ‘‘Year 2000

compliant’’, remove ‘‘as used in this

part, means,’’ and add ‘‘means’’ after the

word ‘‘technology,’’.

The added text reads as follows:

39.002 Definitions.

As used in this part—

* * * * *

PART 42—CONTRACT

ADMINISTRATION AND AUDIT

SERVICES

42.001 [Reserved]

99. Remove and reserve section

42.001.

42.302 [Amended]

100. Amend section 42.302 in the last

sentence of the introductory text of

paragraph (a) by removing ‘‘(see

42.001)’’ and adding ‘‘(see 2.101)’’ in its

place.

42.503–2 [Amended]

101. Amend section 42.503–2 by

removing ‘‘(see 43.101)’’ from the fourth

sentence.

42.701 Definition.

102. Amend section 42.701 as follows:

a. Revise the section heading as set

forth above;

b. In the introductory paragraph of the

definition ‘‘Billing rate’’ remove

‘‘means’’ and add ‘‘as used in this

subpart means’’, and redesignate

paragraphs (a) and (b) as (1) and (2),

respectively; and

c. Remove the definitions ‘‘Business

unit’’, ‘‘Final indirect cost rate’’,

‘‘Forward pricing rate agreement’’,

‘‘Indirect cost’’, and ‘‘Indirect cost rate’’.

42.1201 [Reserved]

103. Remove and reserve section

42.1201.

PART 43—CONTRACT

MODIFICATIONS

104. Amend section 43.101 by adding

an introductory paragraph; by removing

the definitions ‘‘Change order’’,

‘‘Contract modification’’, and

‘‘Supplemental agreement’’, and the

introductory text of the definition

‘‘Effective date’’ including the heading

Effective date.

The added text reads as follows:

43.101 Definitions.

As used in this part—

* * * * *

105. Amend section 43.103 by

revising paragraph (b)(3) to read as

follows:

43.103 Types of contract modifications.

* * * * *

(b) * * *

(3) Make changes authorized by

clauses other than a changes clause (e.g.,

Property clause, Options clause, or

Suspension of Work clause); and

* * * * *

PART 44—SUBCONTRACTING

POLICIES AND PROCEDURES

106. Amend section 44.101 by adding

an introductory paragraph; by removing

the definition ‘‘Consent to subcontract’’;

and by removing ‘‘, as used in this part,’’

from the definitions ‘‘Contractor’’,

‘‘Subcontract’’, and ‘‘Subcontractor’’.

The added text reads as follows:

44.101 Definitions.

As used in this part—

* * * * *

PART 46—QUALITY ASSURANCE

107. Amend section 46.101 by adding

an introductory paragraph; by removing

‘‘, as used in this part,’’ from the

definitions ‘‘Acceptance’’ and

‘‘Conditional acceptance’’; and by

removing the definitions ‘‘Commercial

item’’, ‘‘Inspection’’, and ‘‘Latent

defect’’. The added text reads as follows:

46.101 Definitions.

As used in this part—

* * * * *

46.701 [Reserved]

108. Remove and reserve section

46.701.

109. Amend section 46.710 by adding

a sentence to the end of paragraphs

(a)(1) and (b)(1) to read as follows:

46.710 Contract clauses.

* * * * *

(a)(1) * * * If the contractor’s design

rather than the Government’s design

will be used, insert the word ‘‘design’’

before ‘‘material’’ in paragraph (b)(1)(i).

* * * * *

(b)(1) * * * If the contractor’s design

rather than the Government’s design

will be used, insert the word ‘‘design’’

before ‘‘material’’ in paragraph (b)(1).

* * * * *

PART 47—TRANSPORTATION

110. Amend section 47.001 by adding

an introductory paragraph; by removing

‘‘as used in this part’’ from the

definition ‘‘Common carrier’’, and

removing the definitions ‘‘F.o.b.’’,

‘‘F.o.b. origin’’, ‘‘F.o.b. destination’’,

‘‘Freight’’, and ‘‘Shipment’’. The added

text reads as follows:

47.001 Definitions.

As used in this part—

* * * * *

111. Amend section 47.201 by adding

an introductory paragraph; and

removing ‘‘, as used in this subpart’’

from the definitions ‘‘General freight’’,

‘‘Household goods’’, and ‘‘Office

2134 Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations

furniture’’. The added text reads as

follows:

47.201 Definitions.

As used in this subpart—

* * * * *

112. Amend section 47.401 by adding

an introductory paragraph; and by

removing ‘‘, as used in this subpart,’’

from the definition ‘‘United States’’. The

added text reads as follows:

47.401 Definitions.

As used in this subpart—

* * * * *

113. Amend section 47.501 as follows:

a. Add an introductory paragraph;

b. Remove ‘‘, as used in this subpart’’

from the definitions ‘‘Government

vessel’’, ‘‘Privately owned U.S.-flag

commercial vessel’’, and ‘‘U.S.-flag

vessel;

c. In the definition ‘‘Privately owned

U.S.-flag commercial vessel’’

redesignate paragraphs (a) through (d) as

(1) through (4).

The added text reads as follows:

47.501 Definitions.

As used in this subpart—

* * * * *

PART 48—VALUE ENGINEERING

114. Amend section 48.001 as follows:

a. Add an introductory paragraph;

b. Remove ‘‘, as used in this part,’’

from the definitions ‘‘Acquisition

savings’’, ‘‘Collateral costs’’, ‘‘Collateral

savings’’, ‘‘Contracting office’’,

‘‘Contractor’s development and

implementation costs’’, and ‘‘Value

engineering proposal’’;

c. In the definition ‘‘Acquisition

savings’’ redesignate paragraphs (a)

through (c) as (1) through (3),

respectively;

d. Revise the newly designated

paragraph (1);

e. In the newly designated paragraphs

(2) and (3), remove ‘‘which’’ and add

‘‘that’’ in their places;

f. In the definition ‘‘Future unit cost

reduction’’, ‘‘Instant contract’’, ‘‘Sharing

base’’, ‘‘Sharing period’’, and ‘‘Unit’’,

remove ‘‘, as used in this part,’’;

g. In the definition ‘‘Future unit cost

reduction’’, redesignate paragraphs (a)

and (b) as (1) and (2), respectively; and

in the newly designated paragraph (2)

remove ‘‘which’’ and add ‘‘that’’ in its

place;

h. Revise the definition ‘‘Government

costs’’; and

i. Remove the definitions ‘‘Value

engineering’’ and ‘‘Value engineering

change proposal (VECP)’’.

The added and revised text reads as

follows:

48.001 Definitions.

As used in this part—

* * * * *

Acquisition savings ***

(1) Instant contract savings, that are

the net cost reductions on the contract

under which the VECP is submitted and

accepted, and that are equal to the

instant unit cost reduction multiplied

by the number of instant contract units

affected by the VECP, less the

contractor’s allowable development and

implementation costs;

* * * * *

Government costs means those agency

costs that result directly from

developing and implementing the

VECP, such as any net increases in the

cost of testing, operations, maintenance,

and logistics support. The term does not

include the normal administrative costs

of processing the VECP or any increase

in instant contract cost or price resulting

from negative instant contract savings,

except that for use in 52.248–3, see the

definition at 52.248–3(b).

* * * * *

PART 49—TERMINATION OF

CONTRACTS

115. Amend section 49.001 as follows:

a. Add an introductory paragraph;

b. Remove ‘‘, as used in this part,’’

from the definitions ‘‘Claim’’,

‘‘Continued portion of the contract’’,

‘‘Other work’’, and ‘‘Settlement

proposal’’;

c. Remove the definitions ‘‘Effective

date of termination’’ and ‘‘Termination

contracting officer’’; and

d. Revise the definition ‘‘Settlement

agreement’’.

The added and revised text reads as

follows:

49.001 Definitions.

As used in this part—

* * * * *

Settlement agreement means a written

agreement in the form of a contract

modification settling all or a severable

portion of a settlement proposal.

* * * * *

PART 50—EXTRAORDINARY

CONTRACTUAL ACTIONS

116. Amend section 50.001 by adding

an introductory paragraph; and

removing ‘‘, as used in this part,’’ from

the definitions ‘‘Approving authority’’

and ‘‘Secretarial level’’. The added text

reads as follows:

50.001 Definitions.

As used in this part—

* * * * *

PART 52—SOLICITATION PROVISIONS

AND CONTRACT CLAUSES

52.101 [Amended]

117. Amend section 52.101 in the

heading of paragraph (a) by removing

‘‘Definitions’’ and adding ‘‘Definition’’

in its place; and by removing the

definitions ‘‘Alternate’’, ‘‘Contract

clause’’ or ‘‘clause’’, ‘‘Solicitation

provision’’ or ‘‘provision’’, and

‘‘Substantially as follows’’ or

‘‘substantially the same as’’.

118. Amend section 52.202–1 as

follows:

a. Revise the introductory paragraph,

the date of the clause, and paragraphs

(a) and (d) of the clause;

b. Remove paragraph (f) and

redesignate paragraph (e) as (f), and add

a new paragraph (e);

c. In the newly designated paragraph

(f)(2), remove ‘‘(e)(1)’’ and add ‘‘(f)(1)’’

in its place; and in the newly designated

(f)(3) remove ‘‘(e)(1) or (e)(2)’’ and add

‘‘(f)(1) or (f)(2)’’ in its place; and

d. In Alternate I of the clause, remove

‘‘(Apr 1984)’’ and add ‘‘(Mar 2001)’’ in

its place; and remove ‘‘paragraph (c)’’

and add ‘‘paragraph (g)’’ in its place.

The revised and new text reads as

follows:

52.202–1 Definitions.

As prescribed in section 2.201, insert

the following clause:

DEFINITIONS (MAR 2001)

(a) Agency head or head of the agency

means the Secretary (Attorney General,

Administrator, Governor, Chairperson, or

other chief official, as appropriate) of the

agency, unless otherwise indicated,

including any deputy or assistant chief

official of the executive agency.

* * * * *

(d) Component means any item supplied to

the Government as part of an end item or of

another component, except that for use in

52.225–9, and 52.225–11 see the definitions

in 52.225–9(a) and 52.225–11(a).

(e) Contracting Officer means a person with

the authority to enter into, administer, and/

or terminate contracts and make related

determinations and findings. The term

includes certain authorized representatives of

the Contracting Officer acting within the

limits of their authority as delegated by the

Contracting Officer.

* * * * *

(End of clause)

52.212–3 [Amended]

119. Amend section 52.212–3 in the

heading of the clause by removing

‘‘(OCT 2000)’’ and adding ‘‘(MAR

2001)’’ in its place; and in paragraph (a)

in the definition ‘‘Women-owned small

business concern’’ by removing from

paragraph (1) ‘‘Which’’ and ‘‘women or’’

Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations 2135

and adding ‘‘That’’ and ‘‘women; or’’ in

their places, respectively.

120. Amend section 52.214–21 by

revising the date of the provision and

the first sentence in paragraph (a).

52.214–21 Descriptive Literature.

* * * * *

DESCRIPTIVE LITERATURE (MAR 2001)

(a) Descriptive Literature, as used in this

provision, means information (e.g., cuts,

illustrations, drawings, and brochures) that is

submitted as part of a bid. * * *

* * * * *

121. Amend section 52.215–1 by

revising the date of the provision; and

in paragraph (a) of the provision by

revising the definition ‘‘In writing’’ or

‘‘written’’ to read as follows:

52.215–1 Instructions to Offerors—

Competitive Acquisition.

* * * * *

INSTRUCTIONS TO OFFERORS—

COMPETITIVE ACQUISITION (MAR 2001)

(a) * * *

In writing, writing, or written means any

worded or numbered expression that can be

read, reproduced, and later communicated,

and includes electronically transmitted and

stored information.

* * * * *

52.219–1 [Amended]

122. Amend section 52.219–1 in the

provision heading by removing ‘‘(OCT

2000)’’ and adding ‘‘(MAR 2001)’’ in its

place; and in paragraph (c) under the

definition ‘‘Women-owned small

business concern’’, by removing from

paragraph (1) ‘‘Which’’ and ‘‘women or’’

and adding ‘‘That’’ and ‘‘women; or’’ in

their places, respectively.

123. Amend section 52.219–23 by

revising the date of the clause; and in

paragraph (a) of the clause by revising

the definition ‘‘Minority institution’’ to

read as follows:

52.219–23 Notice of Price Evaluation

Adjustment for Small Disadvantaged

Business Concerns.

* * * * *

NOTICE OF PRICE EVALUATION

ADJUSTMENT FOR SMALL

DISADVANTAGED BUSINESS CONCERNS

(MAR 2001)

(a) * * *

Minority institution means an institution of

higher education meeting the requirements of

Section 1046(3) of the Higher Education Act

of 1965 (20 U.S.C. 1067k, including a

Hispanic-serving institution of higher

education, as defined in Section 316(b)(1) of

the Act (20 U.S.C. 1101a)).

* * * * *

52.223–6 [Amended]

124.–125. Amend section 52.223–6 in

the clause heading by removing ‘‘(JAN

1997)’’ and adding ‘‘(MAR 2001)’’ in its

place; and in the definition ‘‘drug-free

workplace’’ by removing ‘‘at which’’

and adding ‘‘where’’ in its place.

126. Amend section 52.223–11 by

revising the date of the clause and

paragraph (a) of the clause to read as

follows:

52.223–11 Ozone-Depleting Substances.

* * * * *

OZONE-DEPLETING SUBSTANCES (MAR

2001)

(a) Definition. Ozone-depleting substance,

as used in this clause, means any substance

the Environmental Protection Agency

designates in 40 CFR part 82 as—

(1) Class I, including, but not limited to,

chlorofluorocarbons, halons, carbon

tetrachloride, and methyl chloroform; or

(2) Class II, including, but not limited to,

hydrochlorofluorocarbons.

* * * * *

127. Revise section 52.226–2 to read

as follows:

52.226–2 Historically Black College or

University and Minority Institution

Representation.

As prescribed in 26.304, insert the

following provision:

HISTORICALLY BLACK COLLEGE OR

UNIVERSITY AND MINORITY

INSTITUTION REPRESENTATION (MAR

2001)

(a) Definitions. As used in this provision—

Historically black college or university

means an institution determined by the

Secretary of Education to meet the

requirements of 34 CFR 608.2. For the

Department of Defense, the National

Aeronautics and Space Administration, and

the Coast Guard, the term also includes any

nonprofit research institution that was an

integral part of such a college or university

before November 14, 1986.

Minority institution means an institution of

higher education meeting the requirements of

Section 1046(3) of the Higher Education Act

of 1965 (20 U.S.C. 1067k, including a

Hispanic-serving institution of higher

education, as defined in Section 316(b)(1) of

the Act (20 U.S.C. 1101a)).

(b) Representation. The offeror represents

that it—

[ ] is [ ] is not a historically black college

or university;

[ ] is [ ] is not a minority institution.

(End of provision)

52.232–25, 52.232–26, and 52.232–27

[Amended]

128. Amend sections 52.232–25,

52.232–26, and 52.232–27 in the clause

headings by removing ‘‘(JUN 1997)’’ and

adding ‘‘(MAR 2001)’’ in its place; and

in the third sentence of the

undesignated introductory paragraph by

removing ‘‘section 32.902’’ and adding

‘‘sections 2.101 and 32.902’’ in its place.

129. Amend section 52.242–3 in the

clause heading by removing ‘‘(OCT

1995)’’ and adding ‘‘(MAR 2001)’’ in its

place; and by revising paragraph (c) to

read as follows:

52.242–3 Penalties for Unallowable Costs.

* * * * *

(c) The Contractor shall not include in

any proposal any cost that is

unallowable, as defined in Subpart 2.1

of the FAR, or an executive agency

supplement to the FAR.

* * * * *

130. Amend section 52.246–3 as

follows:

a. In the clause heading, remove

‘‘(APR 1984)’’ and add ‘‘(MAR 2001)’’ in

its place;

b. In the heading of paragraph (a), add

‘‘As used in this clause—’’ after the

word ‘‘Definitions’’;

c. In the definition ‘‘Contractor’s

managerial personnel,’’ remove ‘‘, as

used in this clause,’’, and in paragraph

(2) remove ‘‘at which’’ and add ‘‘where’’

in its place; and

d. In the definition ‘‘Supplies,’’

remove ‘‘, as used in this clause,’’.

131. Amend section 52.246–6 as

follows:

a. In the clause heading, remove ‘‘(Jan

1986)’’ and add ‘‘(Mar 2001)’’ in its

place;

b. In the heading of paragraph (a), add

‘‘As used in this clause—’’ after the

word ‘‘Definitions.’’;

c. In the definition ‘‘Contractor’s

managerial personnel,’’ remove ‘‘, as

used in this clause,’’, and in paragraph

(2) remove ‘‘at which’’ and add ‘‘where’’

in its place; and

d. In the definition ‘‘Materials,’’

remove ‘‘, as used in this clause,’’.

132. Amend section 52.246–8 as

follows:

a. In the clause heading, remove

‘‘(Apr 1984)’’ and add ‘‘(Mar 2001)’’ in

its place;

b. In the heading of paragraph (a), add

‘‘As used in this clause—’’ after the

word ‘‘Definitions.’’;

c. In the definition ‘‘Contractor’s

managerial personnel,’’ remove ‘‘, as

used in this clause,’’, and in paragraph

(2) remove ‘‘at which’’ and add ‘‘where’’

in its place; and

d. In the definition ‘‘Work,’’ remove ‘‘,

as used in this clause,’’.

133. Amend section 52.246–17 by

revising the introductory paragraph, the

date of the clause, and paragraph (a) of

the clause to read as follows:

2136 Federal Register / Vol. 66, No. 7 / Wednesday, January 10, 2001 / Rules and Regulations

52.246–17 Warranty of Supplies of a

Noncomplex Nature.

As prescribed in 46.710(a)(1), insert a

clause substantially as follows:

WARRANTY OF SUPPLIES OF A

NONCOMPLEX NATURE (MAR 2001)

(a) Definitions. As used in this clause—

Acceptance means the act of an authorized

representative of the Government by which

the Government assumes for itself, or as an

agent of another, ownership of existing

supplies, or approves specific services as

partial or complete performance of the

contract.

Supplies means the end items furnished by

the Contractor and related services required

under this contract. The word does not

include ‘‘data.’’

* * * * *

134. Amend section 52.246–18 by

revising the introductory paragraph, the

date of the clause, and paragraph (a) of

the clause to read as follows:

52.246–18 Warranty of Supplies of a

Complex Nature.

As prescribed in 46.710(b)(1), insert a

clause substantially as follows:

WARRANTY OF SUPPLIES OF A COMPLEX

NATURE (MAR 2001)

(a) Definitions. As used in this clause—

Acceptance means the act of an authorized

representative of the Government by which

the Government assumes for itself, or as an

agent of another, ownership of existing and

identified supplies, or approves specific

services rendered, as partial or complete

performance of the contract.

Supplies means the end items

furnished by the Contractor and related

services required under this contract.

The word does not include ‘‘data.’’

* * * * *

135. Amend section 52.246–19 by

revising the introductory paragraph, the

date of the clause, and paragraph (a) of

the clause to read as follows:

52.246–19 Warranty of Systems and

Equipment under Performance

Specifications or Design Criteria.

As prescribed in 46.710(c)(1), the

contracting officer may insert a clause

substantially as follows:

WARRANTY OF SYSTEMS AND

EQUIPMENT UNDER PERFORMANCE

SPECIFICATIONS OR DESIGN CRITERIA

(MAR 2001)

(a) Definitions. As used in this clause—

Acceptance means the act of an authorized

representative of the Government by which

the Government assumes for itself, or as an

agent of another, ownership of existing and

identified supplies, or approves specific

services rendered, as partial or complete

performance of the contract.

Defect means any condition or

characteristic in any supplies or services

furnished by the Contractor under the

contract that is not in compliance with the

requirements of the contract.

Supplies means the end items furnished by

the Contractor and related services required

under this contract. Except when this

contract includes the clause entitled

Warranty of Data, supplies also mean ‘‘data.’’

* * * * *

136. Amend section 52.246–20 by

revising the introductory paragraph and

the date of the clause; and in paragraph

(a) of the clause by removing the

paragraph heading ‘‘Definitions’’ and

adding ‘‘Definition’’ in its place; and by

removing the definition ‘‘Correction’’.

The revised text reads as follows:

52.246–20 Warranty of Services.

As prescribed in 46.710(d), insert a

clause substantially as follows:

WARRANTY OF SERVICES (MAR 2001)

* * * * *

[FR Doc. 01–11 Filed 1–9–01; 8:45 am]

BILLING CODE 6820–EP–P

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 30 and 52

[FAC 97–22; FAR Case 2000–301; Item II]

RIN 9000–AI79

Federal Acquisition Regulation;

Applicability, Thresholds and Waiver

of Cost Accounting Standards

Coverage

AGENCIES: Department of Defense (DoD),

General Services Administration (GSA),

and National Aeronautics and Space

Administration (NASA).

ACTION: Final rule.

SUMMARY: The Civilian Agency

Acquisition Council and the Defense

Acquisition Regulations Council

(Councils) have agreed on a final rule

amending the Federal Acquisition

Regulation (FAR) to implement Section

802 of the National Defense

Authorization Act for Fiscal Year 2000

and the Cost Accounting Standards

(CAS) Board’s final rule, Applicability,

Thresholds and Waiver of Cost

Accounting Standards Coverage. The

FAR rule revises CAS applicability

requirements, dollar thresholds, and

waiver requirements.

DATES: Effective Date: January 10, 2001.

FOR FURTHER INFORMATION CONTACT: The

FAR Secretariat, Room 4035, GS

Building, Washington, DC, 20405, (202)

501–4755, for information pertaining to

status or publication schedules. For

clarification of content, contact Ms.

Linda Nelson, Procurement Analyst, at

(202) 501–1900. Please cite FAC 97–22,

FAR case 2000–301.

SUPPLEMENTARY INFORMATION:

A. Background

Section 802 of the National Defense

Authorization Act for Fiscal Year 2000

(Pub. L. 106–65)—

• Revised, at 41 U.S.C. 422(f)(2)(B),

the categories of contracts and

subcontracts that are exempt from all

CAS requirements;

• Required the Administrator for

Federal Procurement Policy to revise the

rules and procedures issued under 41

U.S.C. 422(f) to increase the dollar

threshold for full CAS coverage from

$25 million to $50 million; and

• Revised 41 U.S.C. 422(f) to permit

the head of an executive agency to

waive the applicability of CAS under

certain conditions.

In response to Public Law 106–65, the

CAS Board in the Office of Federal

Procurement Policy published an

interim rule in the Federal Register on

February 7, 2000 (65 FR 5990). The CAS

Board rule, Applicability, Thresholds

and Waiver of Cost Accounting

Standards Coverage, amended the

regulations at 48 CFR part 9903 to

implement Section 802. After analysis

of public comments, the CAS Board

converted its interim rule to a final rule,

with no change, and published the final

rule in the Federal Register on June 9,

2000 (65 FR 36768).

DoD, GSA, and NASA published an

interim rule in the Federal Register at

65 FR 36028, June 6, 2000. One

respondent submitted public comments

on the interim rule. The Councils

considered all comments before

agreeing to convert the interim rule to

a final rule without change.

This FAR rule—

• Amends the provision at FAR

52.230–1, Cost Accounting Standards

Notices and Certification, to remove the

requirement that a contractor or

subcontractor must have received at

least one CAS-covered contract

exceeding $1 million (‘‘trigger contract’’)

to be subject to ‘‘full CAS coverage,’’

since the CAS Board removed this

‘‘trigger contract’’ amount from its

corresponding solicitation provision,

Cost Accounting Standards Notices and

Certification, at 48 CFR 9903.201–3. The

CAS Board added a new ‘‘trigger

contract’’ dollar amount of $7.5 million

at paragraph (b)(7) of 48 CFR 9903.201–

1, CAS applicability, which is already

referenced at FAR 30.201–1;

• Revises FAR 30.201–4(b)(1),

Disclosure and consistency of cost

accounting practices, and amends the

provision at FAR 52.230–1 to reflect

changes made by the CAS Board to