17184 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Proposed Rules

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 12 and 52

[FAR Case 94–791]

Federal Acquisition Regulation;

Subcontracts for Commercial Items;

Correction

AGENCIES: Department of Defense (DOD),

General Services Administration (GSA),

and National Aeronautics and Space

Administration (NASA).

ACTION: Proposed rule correction.

SUMMARY: In related actions Federal

Acquisition Regulation (FAR) case 94–

790 proposed to implement statutory

authorities for the acquisition of

commercial items and components by

Federal Government agencies as well as

contractors and subcontractors and FAR

case 94–791 proposed a complete list of

laws determined to be inapplicable to

Executive agency contracts and

subcontracts for commercial items and

clauses applicable to subcontracts for

the acquisition of commercial items.

Neither of these cases addressed the

statutory authority for the Comptroller

General to examine the records of

contractors. This amendment corrects

that omission.

DATES: Comments should be submitted

on or before May 22, 1995 to be

considered in the formulation of a final

rule.

ADDRESSES: Interested parties should

submit written comments to: General

Services Administration, FAR

Secretariat (VRS), 18th & F Streets, NW,

Room 4037, Washington, DC 20405.

Please cite FAR case 94–791 in all

correspondence related to this case.

FOR FURTHER INFORMATION CONTACT:

Colonel Laurence M. Trowel,

Commercial Items Team Leader, at (703)

695–3858 in reference to this correction.

For general information, contact the

FAR Secretariat, Room 4037, GS

Building, Washington, DC 20405 (202)

501–4755. Please cite FAR case 94–791

correction.

SUPPLEMENTARY INFORMATION:

A. Background

FAR cases 94–790, Acquisition of

Commercial Items, and 94–791,

Subcontracts for Commercial Items,

were published as proposed rules with

request for comment at 60 FR 11198;

March 1, 1995 and 60 FR 15220; March

22, 1995, respectively. In addition to

these changes, the Federal Acquisition

Streamlining Act (FASA) of 1994 also

consolidated audit provisions and made

other related revisions to the

Government’s authority to examine

records of contractors by amending 10

U.S.C. 2313 (section 2201(a)) and by

adding 41 U.S.C. 254d (section 2251(a)).

These audit related sections were

proposed to be implemented by FAR

case 94–740 published at 59 FR 66408;

December 23, 1994. The proposed

language contained in FAR case 94–740

includes the authority for both the

Comptroller General and Agency

examination of records in a single

clause. However, the clause will only be

included in contracts for the acquisition

of commercial items, when an exception

to the requirement for cost or pricing

data under FAR 15.804–1(a) does not

apply. As a result, contracts for

commercial items that qualify for the

exception to the requirements for cost or

pricing data will not contain language

providing the Comptroller General the

authority to examine records as required

by 10 U.S.C. 2313(c) and 41 U.S.C.

254d(c). To remedy this oversight, we

propose to make the following

amendments to FAR case 94–791:

• Revise the clause at 52.212–5,

Contract Terms and Conditions

Required to Implement Statutes or

Executive Orders—Commercial Items,

by adding a new paragraph (d) to

address the Comptroller General

authority granted in the two statutes.

The balance of the clause remains

unchanged from that published in the

Federal Register at 60 FR 11198. This

revision will provide the Comptroller

General the authority to examine

records when:

(1) The contract was awarded by other

than sealed bid;

(2) The contract is above the

simplified acquisition threshold; and

(3) The clause at 52.215–2, Audit and

Records—Negotiation, is not included

in the contract. When cost or pricing

data is required, the contracting officer

will incorporate the appropriate Part 15

clauses, to include the clause proposed

at 52.215–2, Audit and Records—

Negotiation (see FAR Case 94–740). This

clause provides for both the Comptroller

General and Agency authority to

examine records. The Commercial Items

Team has chosen to revise the clause at

52.212–5 to add coverage for the

Comptroller General specifically

tailored to the acquisition of commercial

items rather than cite the applicable

portions of the clause at 52.215–2. This

approach will clearly and more simply

establish the Comptroller General’s right

to examine records for contracts for

commercial items.

• Revise FAR 12.403, Applicability of

certain laws to subcontracts for the

acquisition of commercial items, to

include 10 U.S.C. 2313(c) and 41 U.S.C.

254d(c) in the list of laws not applicable

to subcontracts for commercial items.

Paragraph (c) of these laws (which relate

to the Comptroller General’s authority)

will not be applicable when the

subcontractor is not required to submit

cost or pricing data. When cost or

pricing data is required, the clause at

52.215–2 will appear in both the prime

and subcontract and authority to

examine records of subcontractors will

apply.

B. Corrections

1.At 60 FR 15221; March 22, 1995, in

the third column section 12.403 is

correctly revised to read as follows:

12.403 Applicability of certain laws to

subcontracts for the acquisition of

commercial items.

(a) The following laws are not

applicable to subcontracts under either

a contract for the acquisition of

commercial items or a subcontract for

the acquisition of commercial items:

(1) 15 U.S.C. 644(d), Requirements

relative to labor surplus areas under the

Small Business Act (see 48 CFR (FAR)

part 19, subpart 19.2);

(2) 41 U.S.C. 43, Walsh-Healey Act

(see 48 CFR (FAR) part 22, subpart

22.6);

(3) 41 U.S.C. 253d, Validation of

Proprietary Data Restrictions (see 48

CFR (FAR) part 27, subpart 27.4);

(4) 41 U.S.C. 254(a) and 10 U.S.C.

2306(b), Contingent Fees (see 48 CFR

(FAR) part 3, subpart 3.4);

(5) 41 U.S.C. 254d(c) and 10 U.S.C.

2313(c), Examination of Records of

Contractor, when a subcontractor is not

required to provide cost or pricing data

(see (FAR) part 15, subpart 15.1);

(6) 41 U.S.C. 416(a)(6), Minimum

Response Time for Offers under Office

of Federal Procurement Policy Act (see

48 CFR (FAR) part 5, subpart 5.2);

(7) 41 U.S.C. 418a, Rights in

Technical Data (see 48 CFR (FAR) part

27, subpart 27.4);

(8) 41 U.S.C. 701 et seq., Drug-Free

Workplace Act of 1988 (see 48 CFR

(FAR) 23.5);

(9) 46 U.S.C. 1241(b), Transportation

in American Vessels of Government

Personnel and Certain Cargo (see 48

CFR (FAR) part 47, subpart 47.5);

(10) 49 U.S.C. 40118, Fly American

provisions (see 48 CFR (FAR) part 47,

subpart 47.4);

(11) Pub. L. 90–469, William Langer

Jewel Bearing Plant Special Act (see 48

CFR (FAR) part 8, subpart 8.2);
Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Proposed Rules 17185

(12) 10 U.S.C. 2301, note, as amended

by Section 2091, Pub. L. 103–355,

Payment Protections for Subcontractors

and Suppliers (see 48 CFR (FAR) parts

28 and 32, subparts 28.1 and 32.1);

(13) 10 U.S.C. 2241, note (Pub. L.

102–396, Section 9005, as amended by

Pub. L. 103–139, Section 8005),

Limitations on Procurement of Food,

Clothing, and Specialty Metals Not

Produced in the United States (See 48

CFR (DFARS) part 225, subpart 225.70);

(14) 10 U.S.C. 2320, Rights in

Technical Data (see 48 CFR (DFARS)

part 227, subpart 227.4);

(15) 10 U.S.C. 2321, Validation of

Proprietary Data Restrictions. (see 48

CFR (DFARS) part 227, subpart 227.4);

(16) 10 U.S.C. 2327, note (Pub. L.

103–160, Section 843), Reporting

Requirement Regarding Dealings with

Terrorist Countries (see 48 CFR

(DFARS) part 209, subpart 209.1);

(17) 10 U.S.C. 2391, note (Pub. L.

101–510, Section 4201(a)(1)(B)),

Notification of Substantial Impact on

Employment (see 48 CFR (DFARS) part

249, subpart 249.70);

(18) 10 U.S.C. 2393, Prohibition

Against Doing Business with Certain

Offerors or Contractors (see 48 CFR

(DFARS) part 209, subpart 209.4);

(19) 10 U.S.C. 2501, note (Pub. L.

103–160, Section 1372), Notification of

Proposed Program Termination (see 48

CFR (DFARS) part 249, subpart 249.70);

(20) 10 U.S.C. 2534, Miscellaneous

Limitations on the Procurement of

Goods other than United States Goods

(see 48 CFR (DFARS) part 225, subparts

225.7004, 225.7007, 225.7010, and

225.7016);

(21) 10 U.S.C. 2631, Cargo Preference

Act (see 48 CFR (DFARS) 247.5); and

(22) National Defense Authorization

Acts, Appropriations Acts, and Other

Statutory Restrictions on Foreign

Purchases as follows: Pub. L. 100–202,

Section 8088, Polyacrylonitrile Based

Carbon Fiber; Pub. L. 101–511, Section

8041, Anchor and Mooring Chain; Pub.

L. 102–172, Section 8111, Carbon, Alloy

and Armor Steel Plates; Pub. L. 102–

396, Section 9108, Four Ton Dolly Jacks;

Pub. L. 102–484, Section 832, Anti

friction Bearings; Pub. L. 103–139,

Section 8090, Aircraft Fuel Cells; Pub.

L. 103–139, Section 8124, Totally

Enclosed Lifeboat Survival Systems;

Pub. L. 103–335, Section 8023,

Supercomputers; Pub. L. 103–335,

Section 8050, Multibeam Sonar

Mapping Systems; Pub. L. 103–335,

Section 8115, Ship Propellers; and Pub.

L. 103–335, Section 8120, 120 mm

Mortars and Ammunition.

(b) Certain requirements of the

following laws have been eliminated for

subcontracts under either a contract for

the acquisition of commercial items or

subcontract for the acquisition of

commercial items:

(1) 33 U.S.C. 1368, Requirement for a

certificate and clause under the Federal

Water Pollution Control Act (see 48 CFR

(FAR) part 23, subpart 23.1);

(2) 40 U.S.C. 327 et seq., Requirement

for a certificate and clause under the

Contract Work Hours and Safety

Standards Act (see 48 CFR (FAR) part

22, subpart 22.3);

(3) 41 U.S.C. 423e(1)(B), Requirement

for certain certifications under the

Procurement Integrity Act (see 48 CFR

(FAR) part 3, subpart 3.1); and

(4) 42 U.S.C. 7606, Requirements for

a certificate and clause under the Clean

Air Act (see 48 CFR (FAR) part 23,

subpart 23.1).

(c) The applicability of the following

laws have been modified in regards to

subcontracts under either a contract for

the acquisition of commercial items or

a subcontract for the acquisition of

commercial items:

(1) 41 U.S.C. 253g and 10 U.S.C. 2402,

Prohibition on Limiting Subcontractor

Direct Sales to the United States (see 48

CFR (FAR) part 3, subpart 3.5);

(2) 41 U.S.C. 254(d) and 10 U.S.C.

2306a, Truth in Negotiations Act (see 48

CFR (FAR) part 15, subpart 15.8); and

(3) 41 U.S.C. 422, Cost Accounting

Standards (see 48 CFR (FAR) part 99).

(d) The FAR prescription, provision

or clause for each of these statutes has

been revised in the appropriate part to

reflect their proper application to the

acquisition of commercial items.

2. At 60 FR 15222; March 22, 1995,

in the second column section 52.212–5

is correctly revised to read as follows:

52.212–5 Contract Terms and Conditions

Required To Implement Statutes or

Executive Orders—Commercial Items.

As prescribed in 12.302(b)(4), insert

the following clause:

Contract Terms and Conditions Required to

Implement Statutes or Executive Orders—

Commercial Items (Date)

(a) The Contractor agrees to comply with

the following FAR clauses, which are

incorporated in this contract by reference, to

implement provisions of law or executive

orders applicable to acquisitions of

commercial items:

(1) 52.219–8, Utilization of Small Business

Concerns and Small Disadvantaged Business

Concerns (15 U.S.C. 637 (d)(2) and (3));

(2) 52.222–3, Convict Labor (E.O. 11755);

and

(3) 52.233–3, Protest After Award (31 U.S.C

3553 and 40 U.S.C. 759).

(b) The Contractor agrees to comply with

the following FAR and FIRMR clauses in this

paragraph (b) that are indicated as being

incorporated in this contract by reference to

implement provisions of law or executive

orders applicable to acquisitions of

commercial items or components:

lll (1) 52.203–6, Restrictions on

Subcontractor Sales to the Government, with

Alternate I (41 U.S.C. 253g and 10 U.S.C.

2402).

lll (2) 52.203–10, Price or Fee

Adjustment for Illegal or Improper Activity

(41 U.S.C. 423).

lll (3) 52.219–14, Limitation on

Subcontracting (15 U.S.C. 637(a)(14)).

lll (4) 52.222–26, Equal Opportunity

(E.O. 11246).

lll (5) 52.222–35, Affirmative Action

for Special Disabled and Vietnam Era

Veterans (38 U.S.C. 2012).

lll (6) 52.222–36, Affirmative Action

for Handicapped Workers (29 U.S.C. 793).

lll (7) 52.222–37, Employment Reports

on Special Disabled Veterans and Veterans of

the Vietnam Era (38 U.S.C. 2012).

lll (8) 52.225–3, Buy American Act—

Supplies (41 U.S.C. 10).

lll (9) 52.225–9, Buy American Act—

Trade Agreements Act—Balance of Payments

Program (41 U.S.C. 10, 19 U.S.C. 2501–2582).

lll (10) 52.225–17, Buy American

Act—Supplies Under European Community

Sanctions for End Products (E.O. 12849).

lll (11) 52.225–18, European

Community Sanctions for End Products (E.O.

12849).

lll (12) 52.225–19, European

Community Sanctions for Services (E.O.

12849).

lll (13) 52.225–21, Buy American

Act—North American Free Trade Agreement

Implementation Act—Balance of Payments

Program (41 U.S.C 10, Pub. L. 103–187).

lll (14) 52.247–64, Preference for

Privately Owned US Flagged Commercial

Vessels (46 U.S.C. 1241).

lll (15) 201–39.5202–3, Procurement

Authority (FIRMR). (This acquisition is being

conducted under lll delegation of GSA’s

exclusive procurement authority for FIP

resources. The specific GSA DPA case

number is lll).

(c) The Contractor agrees to comply with

the following FAR clauses in this paragraph

(c), applicable to commercial services, that

are indicated as being incorporated in this

contract by reference to implement

provisions of law or executive orders

applicable to acquisitions of commercial

items or components:

lll (1) 52.222–41, Service Contract Act

of 1965, As amended (41 U.S.C. 351, et seq.).

lll (2) 52.222–42, Statement of

Equivalent Rates for Federal Hires (29 U.S.C.

206 and 41 U.S.C. 351, et seq.).

lll (3) 52.222–43, Fair Labor Standards

Act and Service Contract Act—Price

Adjustment (Multiple Year and Option

Contracts) (29 U.S.C. 206 and 41 U.S.C. 351

et seq.).

lll (4) 52.222–44, Fair Labor Standards

Act and Service Contract Act—Price

Adjustment (29 U.S.C. 206 and 41 U.S.C. 351

et seq.).

lll (5) 52.222–47, SCA Minimum

Wages and Fringe Benefits Applicable to

Successor Contract Pursuant to Predecessor

Contractor Collective Bargaining Agreement

(CBA) (41 U.S.C. 351 et seq.).

(d) Comptroller General Examination of

Record. The Contractor agrees to comply
17186 Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 / Proposed Rules

with the provisions of this paragraph (d) if

this contract was awarded using other than

sealed bid, is in excess of the simplified

acquisition threshold, and does not contain

the clause at 52.215–2, Audit and Records—

Negotiation:

(1) The Comptroller General of the United

States, or an authorized representative of the

Comptroller General, shall have access to and

right to examine any of the Contractor’s

directly pertinent records involving

transactions related to this contract.

(2) The Contractor shall make available at

its offices at all reasonable times the records,

materials, and other evidence for

examination, audit, or reproduction, until 3

years after final payment under this contract

or for any shorter period specified in Subpart

4.7, Contractor Records Retention, of the

Federal Acquisition Regulation, or for any

longer period required by statute or by other

clauses of this contract. If this contract is

completely or partially terminated, the

records relating to the work terminated shall

be made available for 3 years after any

resulting final termination settlement.

Records relating to appeals under the

disputes clause or to litigation or the

settlement of claims arising under or relating

to this contract shall be made available until

such appeals, litigation, or claims are finally

resolved.

(3) As used in this clause, records include

books, documents, accounting procedures

and practices, and other data, regardless of

type and regardless of form. This does not

require the Contractor to create or maintain

any record that the Contractor does not

maintain in the ordinary course of business

or pursuant to a provision of law.

(e) Notwithstanding the requirements of

the clauses in paragraphs (a), (b), (c) or (d)

of this clause, the Contractor is not required

to include any FAR clause, other than those

listed below, in a subcontract for commercial

items or commercial components—

(1) 52.222–26, Equal Opportunity (E.O.

11246);

(2) 52.222–35, Affirmative Action for

Special Disabled and Vietnam Era Veterans

(38 U.S.C. 2012(a)); and

(3) 52.222–36, Affirmative Action for

Handicapped Workers (29 U.S.C. 793).

(End of clause)

Dated: March 29, 1995.

Edward C. Loeb,

Deputy Project Manager for Implementation

of the Federal Acquisition Streamlining Act

of 1994.

[FR Doc. 95–8145 Filed 4–3–95; 8:45 am]

BILLING CODE 6820–34–P