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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: October 1, 2003

SUBJECT: Federal Acquisition Circular (FAC) 2001-16, Miscellaneous Amendments

SOURCE: Federal Register, October 1, 2003, Vol. 68, No. 190, page 56667

AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA)

ACTION: Final and Interim Rules

SYNOPSIS: The Federal Acquisition Secretariat is issuing FAC 2001-16 to amend the Federal Acquisition Regulation (FAR) in the following areas: (1) Central Contractor Registration; (2) electronic commerce in federal procurement; (3) unique contract and order identifier numbers; (4) procurements for defense against or recovery from terrorism or nuclear, biological, chemical or radiological attack, and temporary emergency procurement authority; (5) notification of contract financing overpayments; (6) Caribbean Basin Country -- Dominican Republic; (7) prohibited sources; (8) economic planning, employee morale, and travel cost principles; and (9) technical amendments.

DATES: All items are effective October 1, 2003, except for items (5), (6), (7), and (8), which are effective October 31, 2003.

Comments on the interim rule that is item (3) must be submitted on or before October 31, 2003.

ADDRESSES: Comments on item (3) must be submitted to General Services Administration, FAR Secretariat (MVA), 1800 F Street, NW, Room 4035, Attn: Laurie Duarte, Washington, DC 20405; or by e-mail to farcase.2002-025@gsa.gov. Cite "FAC 2001-16, FAR case 2002-025" in correspondence related to the interim rule.

FOR FURTHER INFORMATION CONTACT: The following analysts:

      Items (1) and (5), Jeritta Parnell, 202-501-4082.

      Items (2), (6), and (7), Cecelia Davis, 202-219-0202.

      Items (3) and (4), Gerald Zaffos, 202-208-6091.

      Item (8), Edward Loeb, 202-501-0650.

For general information, contact the FAR Secretariat, Room 4035, GS Building, Washington, DC 20405, 202-501-4755.

SUPPLEMENTAL INFORMATION: (1) Central Contractor Registration: This final rule adds a new FAR Subpart 4.11, Central Contractor Registration, and implementing clauses to require contractors to be registered in the Central Contractor Registration (CCR) database to be eligible for award of any contract, basic agreement, basic ordering agreement, or blanket purchase agreement on or after October 1, 2003. In addition, the rule requires contracting officers to modify existing contracts in which the period of performance extends beyond December 31, 2003, to require contractors to register in the CCR database by December 31, 2003. (EDITOR'S NOTE: The CCR is at http://www.ccr.gov.)

A proposed rule was published on April 3, 2003, that would require contractor registration by October 1, 2003, and require contracting officers to modify existing contracts by September 30, 2003 (see the April 3, 2003, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Central Contractor Registration"). Thirty-one respondents submitted comments and as a result, the deadline for modifying existing contracts is extended to December 31, 2003; three of the five exceptions to this requirement are clarified; one additional exception is authorized; and various editorial changes are made.

The following are the changes made by this final rule (with differences between the proposed and final versions explained):


(2) Electronic Commerce in Federal Procurement: This rule finalizes the May 16, 2001, interim rule that adopted FedBizOpps (http://www.fedbizopps.gov) as the "governmentwide point of entry" (GPE) -- the universal electronic public access to governmentwide procurement opportunities (for more on the interim rule being finalized, see the May 16, 2001, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Circular (FAC) 97-26, Miscellaneous Amendments").

The May 16, 2001, interim rule established October 1, 2001, as the required date for posting synopses of upcoming procurement opportunities on FedBizOpps, but also required that synopses be published in the Commerce Business Daily (CBD) until January 1, 2002, as well. This final rule eliminates all references to the CBD as well as the October 1, 2001, and January 1, 2002, deadlines.

The most significant difference between the interim and final versions of this rule is in paragraph (g) of FAR 5.203, Publicizing and Response Time -- the interim rule failed to modify the timeframes for presumption of publication ("6 days if electronically transmitted through the GPE or other means") even though FedBizOpps will provide a near-instantaneous display of notices. Therefore, FAR 5.203(g) has been amended to shorten the time for presumption of publication to one day.


(3) Unique Contract and Order Identifier Numbers: This interim rule amends FAR 4.602, Federal Procurement Data System, to add a paragraph (e) which requires each agency to assign a unique procurement instrument identifier (PIID) for every contract, purchase order, basic ordering agreement (BOA), basic agreement, and blanket purchase agreement (BPA) reported to the Federal Procurement Data System -- Next Generation (FPDS-NG); and to have in place, no later than October 1, 2003 (the date FPDS-NG becomes operational), a process that will ensure that each PIID reported to FPDS is unique, governmentwide, and will remain so for at least 20 years from the date of contract award.


(4) Procurements for Defense Against or Recovery From Terrorism or Nuclear, Biological, Chemical or Radiological Attack, and Temporary Emergency Procurement Authority: This rule finalizes the January 27,2003, interim rule that implemented Sections 852 through 856 and Section 858 of the Homeland Security Act (Public Law 107-296) by revising the definition of "micro-purchase threshold" in FAR 2.101, Definitions, to increase the threshold to $7,500, and the definition of "simplified acquisition threshold" from $100,000 to $200,000 ($300,000 for contracts awarded and performed outside the United States), for "acquisitions of supplies or services that, as determined by the head of the agency, are to be used to facilitate defense against or recovery from terrorism or nuclear, biological, chemical, or radiological attack" (for more on the interim rule being finalized, see the January 27, 2003, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Circular (FAC) 2001-12, Procurements for Defense Against or Recovery From Terrorism or Nuclear, Biological, Chemical or Radiological Attack").

In addition, the interim rule further implemented Public Law 107-296 by:

Five respondents submitted comments on the interim rule. As a result of the comments, paragraph (b)(2)(vi) of FAR 10.002, Procedures, which had listed the querying of government databases as a market research technique, is changed to "government and commercial databases."

Also finalized without change is the August 30, 2002, interim rule that implemented Section 836 of the Fiscal Year 2002 National Defense Authorization Act (Public Law 107-107) by increasing, for any procurement that facilitates the defense of the United States against terrorism or biological or chemical attack until September 30, 2003, the micro-purchase threshold from $2,500 to $15,000 when made by or for DOD; increasing the simplified acquisition threshold from $100,000 to $250,000 when the purchase is made by or for DOD inside the U.S. in support of a contingency operation; and increasing the simplified acquisition threshold from $200,000 to $500,000 for purchases made by or for DOD outside the U.S. in support of a contingency operation (for more on the interim rule, see the August 30, 2002, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Circular (FAC) 2001-09, Miscellaneous Amendments").

No comments were received on the interim rule, so it is finalized without changes. However, since the September 30, 2003, expiration of Section 836 has passed, and Congress has not passed an authorization act for Fiscal Year 2004 that extends Section 836, this final rule is moot, at least for now.


(5) Notification of Contract Financing Overpayments: This rule adopts as final, with one change, the August 29, 2002, proposed rule that would revise FAR 52.232-25, Prompt Payment; FAR 52.232-26, Prompt Payment for Fixed-Price Architect-Engineer Contracts; and FAR 52.232-27, Prompt Payment for Construction Contracts, to require a contractor to notify the contracting officer if the contractor becomes aware of an invoice overpayment. In addition, the proposed rule would have added the following language as new FAR 12.215 Notification of Overpayment, and to FAR 32.008, Notification of Overpayment:

"If the contractor notifies the contracting officer of a duplicate contract financing or invoice payment or that the government has otherwise overpaid on a contract financing or invoice payment, the contracting officer must provide instructions to the contractor, in coordination with the cognizant payment office, regarding disposition of the overpayment.

Two respondents submitted comments. As a result of those comments, the final language in FAR 12.215 and FAR 32.008 is revised to add the word "promptly" and "timely" as follows: "...the contractor officer must promptly provide instructions to the contractor, in coordination with the cognizant payment office, regarding timely disposition of the overpayment." (EDITOR'S NOTE: For more on the proposed rule being finalized, see the August 29, 2002, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Notification of Contract Financing Overpayments".)


(6) Caribbean Basin Country -- Dominican Republic: This final rule adds the Dominican Republic to the definition of "Caribbean Basin country," thus making its products eligible under acquisitions subject to the Trade Agreements Act. This change is made at the direction of the U.S. Trade Representative (USTR). (EDITOR'S NOTE: The Trade Agreements Act applies to acquisitions for supplies or services if the estimated value of the acquisition is $169,000, and to construction if the estimated value of the acquisition is $6,481,000. For more on the Trade Agreements Act, see FAR Subpart 25.4, Trade Agreements.)

This change is made to FAR 25.003, Definitions, and FAR 52.225-5, Trade Agreements. In addition, the statement in paragraph (a)(2) of FAR 25.400, Scope of Subpart, that Dominican Republic products are not to be granted duty-free entry is deleted.


(7) Prohibited Sources: This rule finalizes, with changes, the March 20, 2002, proposed rule that would revise FAR 25.701, Restrictions, and FAR 52.225-13, Restrictions on Certain Foreign Purchases, to remove Serbia, the Taliban-controlled regions of Afghanistan, and Iraq from the list of prohibited sources and points the contracting officer to lists of entities and individuals subject to economic sanctions. This change implements Executive Order 13192, Lifting and Modifying Measures With Respect to the Federal Republic of Yugoslavia (Serbia and Montenegro), and other regulations of the Department of the Treasury that enforce economic sanctions imposed by the president (for more on the proposed rule being finalized, see the March 20, 2002, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Prohibited Sources").

One respondent submitted comments on the proposed rule, and the proposed rule is adopted as final with minor changes. Both FAR 25.701 and FAR 52.225-13 contain the current Internet address to lists of entities and individuals subject to economic sanctions (http://www.epls.gov/TerList1.html), and refer contracting officers to the Office of Foreign Assets Control (OFAC) website at http://www.treas.gov/ofac for more information about the restrictions as well as updates to restrictions.

EDITOR'S NOTE: On June 27, 2003, DOD issued a FAR deviation making these changes and others directly related to provisions in the Homeland Security Act and the Fiscal Year 2002 National Defense Authorization Act regarding the temporary increases in the micro-purchase threshold and simplified acquisition threshold (see Item (4) above). For more on DOD's FAR deviation, see the June 27, 2003, FEDERAL CONTRACTS DISPATCH "Department of Defense; Federal Acquisition Regulation (FAR) Class Deviation Regarding Prohibited Sources."


(8) Economic Planning, Employee Morale, and Travel Cost Principles: This rule adopts as final, with changes, the August 29, 2002, proposed rule that would amend FAR 31.205-12, Economic Planning Costs; FAR 31.205-13, Employee Morale, Health, Welfare, Food Service, and Dormitory Costs and Credits; and FAR 31.205-46, Travel Costs, to increase clarity and readability. The differences between the proposed and final versions of this rule provide additional clarification to the cost principles. The rule does not change the allowability of the costs. (EDITOR'S NOTE: For more on the proposed rule being finalized, see the August 29, 2002, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Economic Planning, Employee Morale, and Travel Cost Principles.")

The introduction to FAC 2001-16 states that these changes are "of particular interest to contractors and contracting officers who use cost analysis to price contracts and modifications, and who determine or negotiate reasonable costs in accordance with a clause of a contract, e.g., price revision of fixed-price incentive contracts, terminated contracts, or indirect cost rates."


(9) Technical Amendments: The following technical amendments are made:


FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2003 by Panoptic Enterprises. All Rights Reserved.

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