Source: http://www.fedgovcontracts.com/pe03-113.htm
Timestamp: 2018-03-18 22:50:32
Document Index: 769466194

Matched Legal Cases: ['art 23', 'art 5', 'art 5', 'art 7', 'art 23', 'art 13']

7/24/03 Dispatch: Federal Acquisition Circular (FAC) 2001-15 - Miscellaneous Amendments
SUBJECT: Federal Acquisition Circular (FAC) 2001-15, Miscellaneous Amendments
SOURCE: Federal Register, July 24, 2003, Vol. 68, No. 142, page 43853
SYNOPSIS: The Federal Acquisition Secretariat is issuing FAC 2001-15 to amend the Federal Acquisition Regulation (FAR) in the following areas: (1) elimination of Standard Form 129, Solicitation Mailing List Application; (2) energy-efficient standby power devices; (3) electronic listing of acquisition vehicles available for use by more than one agency; (4) compensation cost principle; (5) leadership in environmental management (Executive Order 13148); (6) selling cost principle; (7) Section 508 micropurchase exception sunset provision; and (8) technical amendments.
EFFECTIVE DATES: All items are effective August 25, 2003, except for Items (3), (7), and (8), which are effective July 24, 2003. Item (3) is effective July 24, 2003, and applies to the following procurement instruments except for those expiring on or before June 1, 2004: governmentwide acquisition contracts (GWACs), multi-agency contracts, Federal Supply Schedule (FSS) contracts, and other procurement instruments intended for multiple agency use, including blanket purchase agreements (BPAs) under FSS contracts.
Item (1), Ralph De Stefano, 202-501-1758.
Item (2), Laura Smith, 202-501-1224.
Item (3), Gerald Zaffos, 202-208-6091.
Items (4) and (6), Edward Loeb, 202-501-0650.
Item (5), Craig R. Goral, 202-501-3856.
Item (7), Angelena Moy, 703-602-1302.
SUPPLEMENTAL INFORMATION: (1) Elimination of the Standard Form (SF) 129, Solicitation Mailing List Application: This final rule removes from the FAR the requirement for contracting offices to establish and maintain manual solicitation mailing lists and the need to use the SF 129, Solicitation Mailing List Application.
The SF 129 was created to enable contracting activities to obtain information from sources to develop a solicitation mailing list. At the time the form was developed, manual processes were the only means available to assure access to adequate sources of supplies and services. However, agencies now have access to many tools that can provide the functionality of the SF 129 but in a more efficient and effective manner. Examples of vendor databases now available to contracting activities are the Central Contractor Registration (CCR) system (http://www.ccr.gov); PRO-Net (the Procurement Marketing and Access Network (http://pro-net.sba.gov)), a gateway to procurement information for and about small businesses operated by the Small Business Administration; and FedBizOpps (http://www.fedbizopps.gov), the designated single governmentwide point of entry for public access to notices of procurement actions over $25,000.
On November 6, 2002, a proposed rule was published to eliminate the manual collection of contractor data using the SF 129 (see the November 6, 2002, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Elimination of the Standard Form 129, Solicitation Mailing List Application"). Among the proposed changes were the elimination of FAR 14.205-1, Establishment of Lists; FAR 14.205-2, Removal of Names from Solicitation Mailing Lists; FAR 14.205-3, Reinstatement on Solicitation Mailing Lists; FAR 14.205-4, Excessively Long Mailing Lists; FAR 14.205-5, Release of Solicitation Mailing Lists; FAR 52.214-9, Failure to Submit Bid (which requires the removal from mailing lists of bidders that do not either submit bids or notify the issuing office they want to receive future solicitations); and FAR 53.301-129, Standard Form 129. In addition, paragraphs in various sections throughout the FAR that refer to the SF 129, bidders lists, or mailing lists, were proposed for amendment or deletion.
Three respondents submitted comments on the proposed rule. As a result of these comments, the proposed rule is finalized with minor editorial changes.
(2) Energy-Efficient Standby Power Devices: On July 31, 2001, President Bush issued Executive Order (EO) 13221 directing agencies to purchase electrical products that use no more than one watt in their standby power consuming mode (for more on EO 13221, see the August 2, 2001, FEDERAL CONTRACTS DISPATCH "Executive Order 13221, Energy Efficient Standby Power Devices"). On October 16, 2002, a proposed rule was published to amend FAR Part 23, Environment, Energy and Water Efficiency, Renewable Energy Technologies, Occupational Safety, and Drug-Free Workplace, to implement EO 13221 and to clarify the requirements for the purchase of Environmental Protection Agency (EPA)-designated products (see the October 16, 2002, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Energy-Efficient Standby Power Devices").
The most significant changes in the proposed rule were:
Add the following definition of "energy-efficient standby power devices" to FAR 2.101, Definitions: "Energy-efficient standby power devices means products that (1) include an external or internal power supply; and (2) use no more than one watt of electricity in their standby power consuming mode or meet recommended low standby levels as designated by the Department of Energy Federal Energy Management Program [FEMP]."
Revise paragraph (a) of FAR 23.203, Energy-Efficient Products, to add, "For products that consume power in a standby mode and are listed on FEMP's Standby Power Devices product listing, agencies shall (A) purchase items which meet FEMP's standby power wattage recommendation or document the reason for not purchasing such items; or (B) if FEMP has listed a product without a corresponding wattage recommendation, purchase items which use no more than one watt in their standby power consuming mode. When it is impracticable to meet the one watt requirement, agencies shall purchase items with the lowest standby wattage practicable."
Also, a new paragraph (b) would be added, which would state, "The requirements in paragraph (a) of this section only apply when the relevant product's utility and performance meet the agency's need" (the existing paragraph (b) would be redesignated as paragraph (c)).
Paragraph (c) of FAR 23.405, Procedures, required contracting officers to place a written justification in the contract file "if an acquisition of EPA-designated products above the micro-purchase threshold does not contain recovered material." FAR 23.405(c) would be revised to require a written justification "if an acquisition of EPA-designated products above the micro-purchase threshold does not meet applicable minimum recovered material content recommended by EPA guidelines."
Four respondents submitted comments on the proposed rule. As a result of the comments, the proposed rule is adopted as final with the definition of "energy-efficient standby power devices " revised to read as follows: "Energy-efficient standby power devices means products that use (1) external standby power devices, or that contain an internal standby power function; and (2) no more than one watt of electricity in their standby power consuming mode or meet recommended low standby levels as designated by the Department of Energy Federal Energy Management Program." This change was made because "products that include an external or internal power supply" in the proposed definition could be interpreted to apply to all products that use power, such as a flashlight. The final definition is almost identical to language in EO 13221, which states that its provisions apply to "commercially available, off-the-shelf products that use external standby power devices, or that contain an internal standby power function."
(3) Electronic Listing of Acquisition Vehicles Available for Use by More Than One Agency: This final rule adds a new FAR Subpart 5.6, Publicizing Multi-Agency Use Contracts, which requires contracting activities to publish in a single online database information about their governmentwide acquisition contracts (GWACs), multi-agency contracts, Federal Supply Schedule (FSS) contracts, blanket purchase agreements (BPAs) under FSS contracts, and other procurement instruments intended for use by other agencies. The directory is located at http://www.contractdirectory.gov.
This effort is part of the "Integrated Acquisition Environment" initiative being undertaken by the Bush administration as part of its "e-Government strategy" to "set in motion a transformation of government around citizen needs." The Integrated Acquisition Environment is a compilation of various acquisition-related databases that will eventually be available through a single portal. Some of the databases are the Central Contractor Registration (CCR) (http://www.ccr.gov/), Federal Business Opportunities (FedBizOpps) (http://www.fedbizopps.gov/), Service Contract Act and Davis-Bacon Act wage determinations, and contract award information in the Federal Procurement Data System (FPDS).
The development of an "e-catalog" of multi-agency contract vehicles is intended to gather in one place information that has been scattered about the Internet (or been unavailable) to "simplify vendor selection and facilitate government buying."
On February 15, 2002, a proposed FAR change was published to facilitate the development of that e-catalog by adding FAR Subpart 5.6, consisting of a single section: FAR 5.601, Governmentwide Database of Contracts (see the February 15, 2002, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Electronic Listing of Acquisition Vehicles Available for Use By More Than One Agency"). The proposed FAR 5.601 would provide the Internet address for the database, require contracting activities to enter 16 data items into the database within ten days of award of a procurement instrument intended for use by multiple agencies, and require contracting activities to enter the 16 data items into the database by a specific date (to be determined) for all existing contracts and other procurement instruments intended for multiple agency use. Also, the proposed rule requested comments on "alternatively identifying the database in FAR Part 7 [Acquisition Planning], to indicate its potential use in acquisition planning..."
On May 9, 2003, Office of Federal Procurement Policy (OFPP) Administrator Angela Styles announced the roll-out of the on-line interagency e-catalog "Contract Directory" at http://www.contractdirectory.gov, and asked agencies that manage interagency contracts to populate the database (see the May 9, 2003, FEDERAL CONTRACTS DISPATCH "Office of Federal Procurement Policy (OFPP); Inter-Agency Contract Directory"). Ms. Styles directed contracting activities "to provide the information identified at the Contract Directory website for each inter-agency procurement they manage by October 31, 2003, for existing instruments that expire after June 1, 2004, and within 10 days of award of a new instrument. Entering information on inter-agency instruments expiring before June 1, 2004, will be optional." Therefore, the final rule would have to comply with OFPP's direction.
Twelve respondents submitted comments on the proposed rule. Based on those comments, the proposed rule is adopted as final with two significant changes:
The second sentence of paragraph (b)(1) of FAR 7.105, Contents of Written Acquisition Plans, is revised to add a requirement that contracting officers and program managers consider the sources contained in the Contract Directory as prospective sources of supplies and services.
Paragraph (b)(2)(iv) of FAR 10.002, Procedures, is revised to encourage querying the Contract Directory during market research for information relevant to agency acquisitions.
In addition, an additional data item has been added to the original 16 data items proposed for reporting to the Contract Directory: the Data Universal Numbering System (DUNS) number of the contractor, because DUNS numbers are the common contractor-identifier among government acquisition databases -- for example, DUNS numbers are required for contractors that register in the CCR.
(4) Compensation Cost Principle: This final rule amends FAR 31.205-6, Compensation for Personal Services, to improve its clarity without changing its meaning by removing unnecessary and duplicative language.
On April 23, 2002, a proposed rule was published that would revise FAR 31.205-6 as follows:
In paragraph (a), the list of specific types of compensation would be removed because it is unnecessary.
Paragraph (b)(2)(i) would be moved to new paragraph (a)(6) and expanded to cover members of "limited liabilities companies" because their compensation also requires special consideration.
Paragraph (b) would be revised to consolidate all the reasonableness provisions, including those dealing with labor-management agreements currently addressed in paragraph (c), which would be deleted.
Delete the language in paragraph (b)(1) that places the burden of demonstrating reasonableness on the contractor because it is redundant of language currently in paragraph (a) of FAR 31.201-3, Determining Reasonableness.
Paragraph (h) would become new paragraph (g), and it would be revised to emphasize that backpay for underpaid work is allowable if required by a negotiated settlement, order, or court decree.
Other changes would be made to clarify, improve the structure, and remove redundancies throughout the cost principle.
In addition, the proposed rule would add to FAR 31.001, Definitions, the following definition for "compensation for personal services": "all remuneration paid currently or accrued, in whatever form and whether paid immediately or deferred, for services rendered by employees to the contractor."
Three respondents submitted comments on the proposed rule. Based on those comments, the proposed rule is adopted as final except for several editorial changes. Probably the most significant change is the retention of paragraph (c) but marking it as "Reserved" with no text. Deleting paragraph (c) would have required the redesignation of paragraphs (d) through (p) as paragraphs (c) through (o), respectively. However, the paragraph designations, especially paragraph (j) for pensions, have been cited in many court cases, government contracts, and other documents over the years, and all the respondents expressed concerns that the redesignation would create confusion. (EDITOR'S NOTE: For more on the proposed rule, see the April 23, 2002, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Compensation for Personal Services.")
(5) Leadership in Environmental Management (EO 13148): This final rule amends FAR Part 23, Environment, Energy and Water Efficiency, Renewable Energy Technologies, Occupational Safety, and Drug-Free Workplace, and the related clauses in FAR 52.223, to implement Executive Order (EO) 13148 of April 21, 2000, Greening the Government through Leadership in Environmental Management (see the April 26, 2000, FEDERAL CONTRACTS DISPATCH "'Greening the Government' Executive Orders").
EO 13148 directed each federal agency to make sure "that all necessary actions are taken to integrate environmental accountability into agency day-to-day decisionmaking and long-term planning processes, across all agency missions, activities, and functions." It provided requirements and goals for agencies related to environmental management and compliance; right-to-know and pollution prevention; release reduction of toxic chemicals; use reduction of toxic chemicals, hazardous substances, and other pollutants; and reduction in ozone-depleting substances. Also, it revoked EO 12843 of April 21, 1993, Procurement Requirements and Policies for Federal Agencies for Ozone-Depleting Substances; EO 12856 of August 3, 1993, Federal Compliance with Right-To-Know Laws and Pollution Prevention Requirements; and EO 12969 of August 8, 1995, Federal Acquisition and Community Right-To-Know, because EO 13148 superseded them.
On August 29, 2002, a proposed rule was published that would:
Two respondents submitted comments and, as a result, the proposed rule is adopted as final with minor editorial revisions. (EDITOR'S NOTE: For more on the proposed rule, see the August 29, 2002, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Implementation of Executive Order 13148, Greening the Government through Leadership in Environmental Management.")
(6) Selling Cost Principle: This final rule amends FAR 31.205-38, Selling Costs, to increase its clarity and to remove excessive wording and details.
On August 29, 2002, a proposed rule was published that would reformat FAR 31.205-38 and revise it as follows:
Remove the list of selling activities from paragraph (a); revise paragraph (d) and then move it to become the second sentence ("The costs of any selling efforts other than those addressed in this cost principle are unallowable"); and revise the last sentence of paragraph (b) and then move it to become the last sentence of paragraph (a) ("Costs of activities that are correctly classified and disallowed under cost principles referenced in paragraph (b) are not to be reconsidered for reimbursement under any other provision of this subsection").
Revise paragraph (b) by combining the list of selling activities removed from paragraph (a) and combining them with the more detailed guidance about the allowability of these costs in paragraphs (b) and (c)(1).
Remove paragraph (c)(2), which addresses foreign selling costs, because there is no longer any reason to distinguish between the allowability of foreign and domestic selling costs involving direct selling and other market planning efforts.
Remove paragraph (e), which addresses the identification and segregation of unallowable selling costs, because it is duplicative of the guidance in FAR 31.201-6, Accounting for Unallowable Costs, and paragraph (c) of FAR 31.204, Application of Principles and Procedures.
One respondent submitted comments on the proposed rule and, as a result, the proposed rule is adopted as final with minor editorial changes. The most significant of the editorial changes is the deletion of the proposed last sentence of paragraph (a) because its objective is adequately achieved by the revised paragraph (b), which directs the reader to other specific cost principles governing the allowability of the identified categories of costs, and the second sentence of the revised paragraph (a), which makes any selling efforts other than those addressed in the cost principle unallowable.
The introduction to the final rule encourages industry to "continue to identify those individual cost principles which it views as problematic and to provide specific proposals for appropriate revisions. It should be noted that the continuing Defense Procurement and Acquisition Policy initiative to reduce accounting and administrative burdens in the cost principles, without jeopardizing the government's interests, has resulted in significant changes or deletions involving more than 20 different cost principles to date, including the recent major revisions to the relocation cost principle (FAR 31.205-35) that made employee 'tax gross-ups' and spouse employment assistance payments allowable for the first time, as well as increased the maximum allowable lump-sum amount for miscellaneous expenses from $1,000 to $5,000. In addition, cost principle streamlining cases are currently in process regarding compensation (FAR 31.205-6), training and education (FAR 31.205-44), depreciation (FAR 31.205-11), expanded relocation lump-sum (FAR 31.205-35), and travel (FAR 31.205-46
EDITOR'S NOTE: For more on the proposed rule, see the August 29, 2002, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Selling Cost Principle."
The streamlining case "currently in process regarding compensation (FAR 31.205-6)" is actually finalized as Item 4 of this FAC (see above).
For more on the "recent major revisions to the relocation cost principle (FAR 31.205-35)", see the June 27, 2002, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Circular (FAC) 2001-08, Miscellaneous Amendments," specifically Item 3.
(7) Section 508 Micropurchase Exception Sunset Provision: This final rule adopts without change the interim rule in FAC 2001-11 (Item (2)) that amended the first sentence in paragraph (a) of FAR 39.204, Exceptions, to extend the electronic and information technology (EIT) (Section 508 of the Rehabilitation Act Amendments of 1998) micropurchase exception from January 1, 2003, to October 1, 2004.
Section 508 requires federal agencies to develop, procure, maintain, and use electronic and information technology (EIT) that allows federal employees and members of the public with disabilities to have access to information and data that is comparable to the access to information and data by those who are not individuals with disabilities, unless it would be an undue burden on the agency (for more on Section 508, see the December 21, 2000, FEDERAL CONTRACTS DISPATCH "Architectural and Transportation Barriers Compliance Board; Electronic and Information Technology Accessibility Standards").
The FAR implementation of Section 508 provided an exception for micro-purchases until January 1, 2003 (see the April 25, 2001, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Circular (FAC) 97-27, Electronic and Information Technology Accessibility"). The FAR Council fully expected that many products would conform to the standards within that timeframe and be marketed and labeled by the manufacturer accordingly. However, industry is providing products at varying levels of conformance to the standards, and product packaging does not currently provide Section 508 conformance information, in most cases. Therefore, on December 31, 2002, an interim rule was published extending the expiration of the micropurchase exception from January 1, 2003, to October 1, 2004, and comments were invited (see the December 31, 2002, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Circular (FAC) 2001-11, Extensions of FAR Subpart 13.5 and Section 508 Micro-Purchase Exception").
Four respondents submitted comments on the interim rule and provided views on labeling products for micropurchases made using the government purchase card, and one respondent addressed how it accomplished its internal Section 508 training. In response, the introduction to the final rule states, "We applaud industry's efforts to build accessibility features into their products and their participation in making information about product features available by completing the VPAT [Voluntary Product Accessibility Template]. We encourage industry to continue to work toward a solution that will assist the government purchase cardholder, who may have little technical knowledge regarding Section 508, in purchasing products and services that meet the applicable accessibility standards...We are hopeful that a solution can be found that will be agreeable to both industry and the government."
(8) Technical Amendments: The following technical amendments are made:
In FAR 19.1005, Applicability, the five-digit North American Industrial Classification System (NAICS) codes identifying the "Designated Industry Groups" (DIGs) covered by the Small Business Competitiveness Demonstration Program, are replaced by more detailed six-digit NAICS codes, and several Product and Service Codes (PSCs) are added to identify specific sub-industries.
In FAR 52.212-1, Instructions to Offerors -- Commercial Items, the DOD Single Stock Point internet address is changed from http://assist.daps.mil to http://dodssp.daps.mil.