[Federal Register Volume 60, Number 107 (Monday, June 5, 1995)]
[Rules and Regulations]
[Pages 29491-29504]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13061]
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DEPARTMENT OF DEFENSE
48 CFR Parts 202, 203, 206, 207, 209, 215, 217, 219, 225, 226, 228,
231, 232, 235, 237, 242, 244, 245, 247, 249, 251, 252, 253, and
Appendix C to Chapter 2
[Defense Acquisition Circular (DAC) 91-7]
Defense Federal Acquisition Regulation Supplement; Miscellaneous
Amendments
AGENCY: Department of Defense (DoD).
ACTION: Final rules.
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SUMMARY: Defense Acquisition Circular (DAC) 91-7 amends the Defense FAR
Supplement (DFARS) to revise, finalize, or add language on competitive
prototyping, contractor accounting controls, award to foreign
controlled contractors, terrorist countries, debarment and suspension,
small purchases in support of contingency operations, greatest value
sources, predetermined indirect cost rates, undefinitized contract
actions, small disadvantaged business, historically black colleges and
universities and minority institutions, Indian tribal or Alaska native
corporations, North American Free Trade Agreement, valves and machine
tools, restriction on procurement of goods, aircraft fuel cells,
lifeboat survival systems, performance outside the United States,
offset [[Page 29492]] administrative costs, preference for local and
small businesses, preference for local residents, surety bonds,
limitation on allowable individual compensation, restructuring costs
under defense contracts, indirect costs of institutions of higher
learning, research and development definitions, manufacturing science
and technology program, research and development contracting, Federally
Funded Research and Development Centers, streamlined research and
development contracting procedures test, personal services contracts,
services at installations being closed, production surveillance,
contractor insurance/pension reviews, best value--stevedoring,
returnable cylinders, reflagging or repair work, screening threshold
for contractor inventory, notification of proposed program termination
of reduction, and Government supply sources.
DATES: Effective date May 17, 1995.
FOR FURTHER INFORMATION CONTACT:
Ms. Lucile Martin, Defense Acquisition Regulations Directorate,
PDUSD(A&T)DP(DAR), 3062 Defense Pentagon, Washington, DC 20302-3062,
telephone (703) 602-0131.
SUPPLEMENTARY INFORMATION:
A. Background
This Defense Acquisition Circular (DAC) 91-7 includes 39 rules and
miscellaneous editorial amendments. Twelve of the rules in the DAC
(Item XXIII, III, VI, VII, XIV, XVIII, XX, XXII, XXVI, XXVIII, XXIX,
and XXX) were published previously in the Federal Register and thus are
not included as part of this rulemaking notice. These 12 rules are
being published in the DAC to revise the looseleaf edition of DFARS to
conform to the previously published revisions.
C. Regulatory Flexibility Act
DAC 91-7, Items, I, XXI, XXV, XXXV
The Regulatory Flexibility Act does not apply because these rules
are not significant revisions within the meaning of Public Law 98-577.
However, comments from small entities will be considered in accordance
with section 610 of the Act. Such comments must be submitted
separately. Please cite DFARS Case 95-610 in correspondence.
DAC 91-7, Items II, IV, V, VII, IX, X, XIII, XV, XVI, XVII, XXIV,
XXXII, XXXIV, XXXVI, XXXVII, XXXIX
DoD certifies that these rules will not have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act because:
Item II--The rule emphasizes existing requirements for contractors
to ensure that cost data is reliable and contract costs are properly
allocated.
Item IV--The rule only applies to solicitations and contracts with
an estimated or actual value exceeding $5,000,000.
Item V--The rule only applies to contractors and subcontractors
that are debarred, suspended, or proposed for debarment.
Item VII--The rule clarified DoD's existing policy regarding
contractor selection of subcontractors based on greatest value.
Item IX--The rule clarifies the existing regulatory language
regarding statutory restrictions on the use of undefinitized contract
actions.
Item X--The rule updates the definitions of SDB and HBCU, and
eliminates the requirement for an offeror that represents itself as an
SDB, HBCU, or MI, to maintain its status as such as the time of
contract award.
Item XIII--The rule implements statutory restrictions on the
acquisition of machine tool accessories of foreign manufacture.
Item XV--The rule implements statutory restrictions on the
acquisition of fuel cells of foreign manufacture.
Item XVI--The rule implements statutory restrictions on the
acquisition of lifeboat survival systems of foreign manufactures or
assembly.
Item XVII--The rule only applies to contracts that exceed $500,000
and involve performance outside the United States.
Item XXIV--The rule prohibits DoD from placing certain limitations
on the reimbursement of indirect costs to institutions of higher
learning.
Item XXXII--The rule merely simplifies the method used by the
Government to determine when on-site production surveillance will be
performed on a contract.
Item XXXIV--The rule is consistent with the policy at FAR 15.605
regarding selection of a source whose proposal offers the greatest
value to the Government.
Item XXXVI--The rule implements statutory restrictions on foreign
performance of certain reflagging or repair work.
Item XXXVII--The rule merely raises the dollar threshold for
Government screening of excess contractor inventory prior to disposal.
Item XXXIX--The rule uses standard commercial terms for payment
within 30 days, for contractor purchases from Government supply
sources.
DAC 91-7, Items XI, XII, XIX, XXVII, XXXI, XXXIII, XXXVIII
The Regulatory Flexibility Act applies. A final regulatory analysis
has been performed and is available by writing the Defense Acquisition
Regulations Directorate, ATTN: Ms. Michele Peterson, PDUSD(A&T)DP(DAR),
3062 Defense Pentagon, Washington, DC 20301-3062.
D. Paperwork Reduction Act
DAC 91-7, Items I, II, V, VII, IX, X, XI, XV, XVI, XIX, XXI, XXIV, XXV,
XXXI, XXXII, XXXIV, XXXV, XXXVI, XXXVII, XXXVIII, XXXIX
The Paperwork Reduction Act does not apply because the revisions in
this rulemaking notice do not contain and/or affect information
collection requirements which require the approval of OMB under 44
U.S.C. 3501 et seq.
DAC 91-7, Items IV, XII, XIII, XVII, XXVII, XXXIII
The Paperwork Reduction Act applies. OMB has improved the
information collection requirements. The following OMB control numbers
apply:
Item IV--No. 0704-0372
Item XII--No. 0704-0361
Item XIII--No. 0704-0350
Item XVII--No. 0704-0355
Item XXVII--No. 0704-0188 and 0704-0264
Item XXXIII--No. 0704-0250
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
Defense Acquisition Circular (DAC) 91-7 amends the Defense FAR
Supplement (DFARS) 1991 edition, prescribes procedures to be followed,
and provides informational interest items. The amendments, procedures,
and information are summarized as follows:
Item I--Competitive Prototyping
This final rule deletes the language at DFARS 207.105(b)(2)(v),
which addressed competitive prototyping for major acquisition programs
as required by 10 U.S.C. 2438. Section 3006 of the Federal Acquisition
Streamlining Act of 1994 (Pub. L. 103-355) repealed 10 U.S.C. 2438.
Item II--Contractor Accounting Controls
This final rule amends DFARS 209.104-1, 232.503-6, 242.302, and
253.209-1, and adds a new subpart at 242.75, to provide policies and
procedures applicable to contractor [[Page 29493]] accounting systems
and related internal controls. Contractors receiving cost-reimbursement
or incentive type contracts, or contracts which provide for progress
payments based on costs or on a percentage or stage of completion, must
maintain an accounting system and related internal controls which
provide reasonable assurance that (1) Applicable laws and regulations
are complied with; (2) the accounting system and cost data are
reliable; (3) risk of misallocations and mischarges are minimized; and
(4) contract allocations and charges are consistent with invoice
procedures.
Item III--Award to Foreign Controlled Contractors
This final rule was issued by Departmental Letter 94-013, effective
September 29, 1994. The rule revises and finalizes the interim rule
published as Item VII of DAC 91-5. The rule implements 10 U.S.C. 2536,
which prohibits award of a DoD contract under a national security
program to an entity controlled by a foreign government, if access to
proscribed information is required to perform the contract. The final
rule differs from the interim rule in that it (1) revises the
definition of ``entity controlled by a foreign government'' at DFARS
252.209-7002 as required by Section 842 of the Fiscal Year 1994 Defense
Authorization Act (Pub. L. 103-160); (2) revises the definition of
``effectively owned or controlled'' at 252.209-7002 for clarity; (3)
revises the definition of ``foreign government'' at 252.209-7002 for
consistency with the regulations at 31 CFR Chapter V, issued by the
Treasury Department Office of Foreign Assets Control; and (4) makes
minor clarifying revisions at 209.101, 209.104-1(g)(ii), 225.702, and
252.209-7002(b).
Item IV--Terrorist Countries
The interim rule issued by Departmental Letter 94-014 on September
29, 1994, is converted to a final rule without change. The rule
implements Section 843 of the Fiscal Year 1994 Defense Authorization
Act (Public Law 103-160). Section 843 requires offerors and contractors
under DoD solicitations and contracts exceeding $5,000,000 to report
commercial transactions conducted with the government of a terrorist
country. The rule adds new language at DFARS 209.104-1(g)(iii), a new
provision at 252.209-7003, and a new clause at 252.209-7004. The rule
also revises the provision at 252.209-7001 for consistency with the
terminology used in the new provision and clause.
Item V--Debarment and Suspension
This final rule adds a new subsection at DFARS 209.405-1 to place
restrictions on the issuance of orders under indefinite quantity and
Federal Supply Schedule contracts in instances where the contractor has
been debarred, suspended, or proposed for debarment. The rule also
clarifies that the restriction at FAR 9.405-1(b), against renewal or
extension of existing contracts or consent to subcontracts with
contractors debarred, suspended, or proposed for debarment, also
applies to the exercise of options.
Item VI--Small Purchases in Support of Contingency Operations
This final rule was issued by Departmental Letter 94-015, effective
September 29, 1994. The rule amends DFARS 213.000, 213.101, 213.404,
and 213.505 to fully implement DoD's authority to use simplified
procedures for acquisitions in support of contingency operations. The
rule provides for the use of simplified procedures for acquisitions of
$100,000 or less, for contracts to be awarded and performed outside the
United States in support of a contingency operation as defined in 10
U.S.C. 101(a)(13).
Item VII--Greatest Value Sources
This final rule (1) adds language at DFARS 215.806-1(a) (1) to
clarify DoD policy regarding the selection of subcontractors based on
greatest value; (2) adds language at 244.202-2 regarding consideration
of greatest value when consent to subcontract is required; and (3)
revises Section C-207.5 of Appendix C to establish more definitive
criteria for Government personnel to consider when evaluating
contractor vendor rating systems during a Contractor Purchasing System
Review.
Item VIII--Predetermined Indirect Cost Rates
This final rule was issued by Departmental Letter 94-018, effective
October 18, 1994. The rule adds language at DFARS 216.307, 242.705-3,
and 252.216-7002 to implement revisions made to OMB Circular A-21, Cost
Principles for Educational Institutions, on July 26, 1993. The revised
circular provides that indirect cost rates for educational institutions
may be predetermined for a period of up to four years when cost
experience and other pertinent facts are sufficient to assess the
probable level of indirect costs during subsequent accounting periods.
Item IX--Undefinitized Contract Actions
This final rule revises DFARS 217.7404-3(a)(2), 217.7404-4, and
217.7404-5 to clarify the policy and procedures implementing 10 U.S.C.
2326(b) with regard to limitations on the use of undefinitized contract
actions.
Item X--Small Disadvantaged Business, Historically Black Colleges and
Universities and Minority Institutions
The interim rule published as Item XLVII of DAC 91-6 is converted
to a final rule without change. The rule implements Subsections 811
(a), (b), and (c) of the Fiscal Year 1994 Defense Authorization Act
(Pub. L. 103-160). Subsections 811 (a) and (b) of Pub. L. 103-160
revise the definitions of historically black colleges and universities
(HBCU) and minority institutions (MI). Subsection 811(c) deletes the
requirement for an offeror, that represents itself on a DoD
solicitation as a small disadvantaged business, HBCU, or MI, to
maintain its status as such at the time of award. The implementing
DFARS language can be found at 219.301(a), 226.7005(a)(1), 252.219-
7003(a), 252.219-7006(a), 252.226-7000 (a) and (b), and 252.226-
7001(a).
Item XI--Indian Tribal or Alaska Native Corporation
The interim rule issued by Departmental Letter 94-009 on May 3,
1994, is revised and finalized. The rule implements Section 8051 of the
Fiscal Year 1994 Defense Appropriations Act (Pub. L. 103-139) and
Section 8012 of the Fiscal Year 1995 Defense Appropriations Act (Pub.
L. 103-335). Sections 8051 and 8012 provide that, notwithstanding any
other provision of law, a qualified Indian Tribal Corporation or Alaska
Native Corporation furnishing the product of a responsible small
business concern shall not be denied the opportunity to compete for and
be awarded a contract under the Small Disadvantaged Business (SDB)
preference programs. The final rule differs from the interim rule in
that it adds references to Section 8012 of Pub. L. 103-335 at DFARS
219.502-2-70(a)(1)(ii), 252.219-700(f)(2), 252.219-7002(c), and
252.219-7006(d)(2).
Item XII--North American Free Trade Agreement
The interim rule published as Item XVIII of DAC 91-6 is revised and
finalized. The rule incorporates Buy American Act and Balance of
Payment Program waivers required by the North American Free Trade
Agreement [[Page 29494]] (NAFTA) Implementation Act of 1993 (Pub. L.
103-182). The final rule differs from the interim rule in that it
amends the provision at DFARS 252.225-7035, the clause at 252.225-7036,
and the clause prescription at 225.408(a)(4)(B), to recognize the
$25,000 threshold for application of NAFTA to Canadian end products.
Item XIII--Valves and Machine Tools
This final rule adds a new provision at DFARS 252.225-7040, Machine
Tool List, and corresponding prescriptive language at 225.7004-2(b) and
225.7004-6(c). The provision at DFARS 252.225-7040 requires offerors to
identify the country of manufacture and the cost of machine tool
accessories to be provided under a contract, if the accessories are not
listed in the schedule as separate line items and are not of U.S. or
Canadian origin. This information will facilitate evaluation of machine
tool accessories by supply class, as required by 10 U.S.C. 2534, to
determine if foreign source restrictions apply.
Item XIV--Restriction on Procurement of Goods
This interim rule was issued by Departmental Letter 95-009,
effective April 10, 1995. The rule revises DFARS Subpart 225.70 and the
clauses at 252.225-7017 and 252.225-7029, to implement 10 U.S.C. 2534
as amended by Section 814 of the Fiscal Year 1995 Defense Authorization
Act (Pub. L. 103-337) and Section 4102(i) of the Federal Acquisition
Streamlining Act of 1994 (Pub. L. 103-355). Section 814 revises the
existing foreign source restrictions for machine tools and valves,
buses, chemical weapons antidote, air circuit breakers, and
antifriction bearings, by uniformly permitting acquisition of Canadian
items, and by expanding and standardizing the waiver criteria. Section
4102(I) exempts acquisitions below the simplified acquisition threshold
from these restrictions.
Item XV--Aircraft Fuel Cells
The interim rule published as Item XLIV of DAC 91-6 is revised and
finalized. The rule implements Section 8090 of the Fiscal Year 1994
Defense Appropriations Act (Pub. L. 103-139) and Section 8075 of the
Fiscal Year 1995 Defense Appropriations Act (Pub. L. 103-335). Sections
8090 and 8075 prohibit the use of fiscal year 1994 or 1995 funds to
purchase aircraft fuel cells unless such cells are produced or
manufactured in the United States by a domestic-operated entity. The
final rule differs from the interim rule in that it amends the language
at DFARS 225.7021-1 and 225.7021-3(a) to address fiscal year 1995
requirements.
Item XVI--Lifeboat Survival System
The interim rule published as Item XLVI of DAC 91-6 is revised and
finalized. The rule implements Section 8124 of the Fiscal Year 1994
Defense Appropriations Act (Pub. L. 103-139) and Section 8093 of the
Fiscal Year 1995 Defense Appropriations Act (Pub. L. 103-335). Sections
8124 and 8093 prohibit the purchase of a totally enclosed lifeboat
survival system unless 50 percent or more of the system's components
are manufactured in the United States, and 50 percent or more of the
labor in the final manufacture and assembly of the system is performed
in the United States. The final rule differs from the interim rule in
that it adds a reference to Pub. L. 103-335 at DFARS 225.7022-1.
Item XVII--Performance Outside the United States
The interim rule published as Item XXIX of DAC 91-5 is revised and
finalized. The rule implements 10 U.S.C. 2410g, which requires offerors
and contractors to provide the Government with advance notification of
contract performance outside the United States and Canada in certain
instances. The final rule differs from the interim rule in that (1)
Detailed reporting requirements are deleted from the clause at DFARS
252.225-7026; (2) DD Form 2139, which was deleted by DAC 91-5, is
reinstated with a new title and revised to include the reporting
requirements deleted from the clause at DFARS 252.225-7026; and (3)
editorial changes are made at 225.7202 and 252.225-7026(b)(3).
Item XVIII--Offset Administrative Costs
This final rule was issued by Departmental Letter 94-012, effective
September 28, 1994. The rule revises DFARS 225.7303-2 to change the
criteria for contractor recovery of offset administrative costs under
foreign military sale contracts. The change eliminates the requirement
for inclusion of specific information regarding offset costs in Letters
of Offer and Acceptance for foreign military sales. A corresponding
revision has been made to DoD 5105.38-M, Security Assistance Management
Manual.
Item XIX--Preference for Local and Small Businesses
The interim rule issued as Item XLV of DAC 91-6 is revised and
finalized. The rule implements Section 2912 of the Fiscal Year 1994
Defense Authorization Act (Pub. L. 103-160). Section 2912 requires DoD,
when entering into contracts as part of the closure or realignment of a
military installation under a base closure law, to give preference, to
the greatest extent practicable, to qualified businesses located in the
vicinity of the installation and to small business and small
disadvantaged business concerns. The final rule differs from the
interim rule in that it (1) Revises the definition of ``vicinity'' at
DFARS 226.7101 to permit modification of the definition by the agency
head; and (2) clarifies the procedures at 226.7103 to address criteria
for consideration of awards to contractors under the section 8(a)
program.
Item XX--Preference for Local Residents
This interim rule was issued by Departmental Letter 95-003,
effective January 26, 1995. The rule amends DFARS Subpart 226.71 to
implement Section 817 of the Fiscal Year 1995 Defense Authorization Act
(Pub. L. 103-337). Section 817 authorizes the Secretary of Defense to
give preference to entities that plan to hire local residents, when
entering into contracts for services to be performed at a military
installation that is affected by closure or alignment under a base
closure law.
Item XXI--Surety Bonds
This final rule amends DFARS 228.102-1 to implement Section 323 of
the Fiscal Year 1995 Defense Authorization Act (Pub. L. 103-337).
Section 323 extends the authority to issue surety bonds for certain
environmental programs through December 31, 1999.
Item XXII--Limitation on Allowable Individual Compensation
This interim rule was issued by Departmental Letter 94-019,
effective December 14, 1994. The rule amends DFARS 231.205, 231.303,
231.603, and 231.703 to implement Section 8117 of the Fiscal Year 1995
Defense Appropriations Act (Pub. L. 103-335). Section 8117 limits
allowable costs for individual compensation to $250,000 per year. This
limitation applies to contracts that are awarded after April 15, 1995,
and that are funded with Fiscal Year 1995 appropriations.
Item XXIII--Restructuring Costs Under Defense Contracts
This interim rule was issued by Departmental Letter 94-020,
effective December 29, 1994. The rule adds new sections at DFARS
231.205-70, 242.1202, and 242.1204 to implement [[Page 29495]] Section
818 of the Fiscal Year 1995 Defense Authorization Act (Pub. L. 103-
337). Section 818 restricts DoD from reimbursing restructuring costs
associated with a business combination undertaken by a defense
contractor unless certain conditions are met.
Item XXIV--Indirect Costs of Institutions of Higher Learning
The interim rule issued by Departmental Letter 94-010 on May 5,
1994, is converted to a final rule without change. The rule adds a new
section at DFARS 231.303 to implement Section 841 of the Fiscal Year
1994 Defense Authorization Act (Pub. L. 103-160). Section 481 prohibits
DoD from placing any limitation on the reimbursement of otherwise
allowable indirect costs incurred by an institution of higher learning,
unless that same limitation is applied uniformly to all other
organizations performing similar work under DoD contracts.
Item XXV--Research and Development Definitions
This final rule amends DFARS 235.001 to incorporate the definitions
of the categories of research and development found in DoD 7000.14-R,
Financial Management Regulation.
Item XXVI--Manufacturing Science and Technology Program
This interim rule was issued by Departmental Letter 95-002,
effective January 17, 1995. The rule adds language at DFARS 235.006 (a)
and (b)(iv) to implement Section 256 of the Fiscal Year 1995 Defense
Authorization Act (Pub. L. 103-337). Section 256 requires the use of
competitive procedures in awarding contracts under the Manufacturing
Science and Technology Program, and use of a cost-sharing arrangement
for these contracts unless an alternative arrangement is approved by
the Secretary of Defense.
Item XXVII--Research and Development Contracting
This final rule revises DFARS 235.010(b) to provide updated
information regarding the Defense Technical Information Center (DTIC).
The rule also adds two new clauses at DFARS 252.235-7010,
Acknowledgment of Support and Disclaimer, and DFARS 252.235-7011, Final
Scientific or Technical Report Requirement. The clause at 252.235-7010
requires contractors to include an acknowledgment of the Government's
support in the publication of any material based on or developed under
a Government contract. The clause at 252.235-7011 requires contractors
to provide DTIC with two copies of scientific or technical reports
delivered under a Government contract.
Item XXVIII--Federally Funded Research and Development Centers (FFRDCs)
This interim rule was issued by Departmental Letter 95-005,
effective March 3, 1995. The rule adds a new section at DFARS 235.017-1
to implement Section 217 of the Fiscal Year 1995 Defense Authorization
Act (Pub. L. 103-337). Section 217 allows DoD-sponsored FFRDCs that
function primarily as research laboratories to respond to solicitations
and announcements for programs which promote research, development,
demonstration, or transfer of technology.
Item XXIX--Streamlined Research and Development Contracting Procedures
Test
This final rule was issued by Departmental Letter 94-017, effective
October 4, 1994, and Departmental Letter 95-008, effective March 21,
1995. The rule adds a new subpart at DFARS 235.70 to establish
streamlined research and development contracting procedures for use by
selected DoD contracting offices under a test program. The test will be
conducted for a 20-month period extending from October 1, 1994, to May
31, 1996.
Item XXX--Personal Service Contracts
This interim rule was issued by Departmental Letter 95-001,
effective January 5, 1995. The rule adds language at DFARS 206.102(d)
and revises DFARS 237.104(b)(ii) to implement Section 712 of the Fiscal
Year 1994 Defense Authorization Act (Pub. L. 103-160) and Section 704
of the Fiscal Year 1995 Defense Authorization Act (Pub. L. 103-337).
Section 712 requires the Secretary of Defense to establish procedures
for entering into personal service contracts under 10 U.S.C. 1091 to
carry out health care responsibilities in medical/dental treatment
facilities. Section 704 provides authority for the Secretary of Defense
to enter into personal service contracts under 10 U.S.C. 1091 to
provide the services of clinical counselors, family advocacy program
staff, and victim's services representatives.
Item XXXI--Services at Installations Being Closed
The interim rule issued by Departmental Letter 94-011 on July 8,
1994, is revised and finalized. The rule implements Section 2907 of the
Fiscal Year 1994 Defense Authorization Act (Pub. L. 103-160). Section
2907 permits the Secretary of Defense to contract with local
governments for police, fire protection, airfield operation, or other
community services at military installations being closed under Title
II of the Defense Authorization Amendments and Base Closure and
Realignment Act (Pub. L. 100-526) and the Defense Base Closure and
Realignment Act of 1990 (Pub. L. 101-510). The final rule differs from
the interim rule in that it adds a new paragraph at DFARS 237.7401(d)
to clarify that Subpart 222.71, Right of First Refusal of Employment,
applies to contracts with local governments unless it conflicts with
the local government's civil service selection procedures.
Item XXXII--Production Surveillance
This final rules revises DFARS 242.1104 to simplify the criteria
for determining the extent of production surveillance to be performed
under a contract. Category 1, 2, and 3 surveillance criteria are
eliminated and replaced with streamlined surveillance requirements.
Item XXXIII--Contractor Insurance/Pension Reviews
This final rule revises DFARS 242.7302(a) to increase the dollar
threshold for performance of Contractor Insurance/Pension Reviews from
$10,000,000 to $40,000,000. The rule also adds language at 242.7302(d)
to clarify the criteria for determining a contractor's eligibility for
insurance/pension review.
Item XXXIV--Best Value--Stevedoring
The interim rule issued by Departmental Letter 94-016, effective
September 29, 1994, is converted to a final rule without change. The
rule revises DFARS 247.270-5 and 247.270-6 to permit contracting
officers to consider factors other than cost or price when evaluating
offers for stevedoring services.
Item XXXV--Returnable Cylinders
This final rule revises the clause at DFARS 252.247-7021 and the
corresponding prescriptive language at 247.305-70 to delete references
to use of the clause for acquisitions involving returnable cylinders.
The clause at DFARS 252.247-7021 now applies to returnable containers
other than cylinders as the clause at FAR 52.247-66 applies to
returnable cylinders. References to a 30-day rent-free Government use
period are also deleted from the clause to facilitate tailoring of this
time period to the circumstances of the acquisition. [[Page 29496]]
Item XXXVI--Reflagging or Repair Work
The interim rule published as Item XLIII of DAC 91-6 is revised and
finalized. The rule implements Section 315 of the Fiscal Year 1994
Defense Authorization Act (Pub. L. 103-160). Section 315 places
restrictions on the performance of reflagging or repair work on vessels
used under time charter contracts. The final rule differs from the
interim rule in that it revises the language at DFARS 247.571(c) and
252.247-7025 to further clarify the restrictions on the performance of
reflagging or repair work.
Item XXXVII--Screening Threshold
This final rule amends DFARS 245.608-70 to raise the dollar
threshold for screening serviceable and unusable contractor inventory,
with no national stock number, through the Contractor Inventory
Redistribution System. The threshold is raised form $500 to $1,000
(except for furniture) to coincide with the threshold at FAR 45.608-2.
Item XXXVIII--Notification of Proposed Program Termination or Reduction
The interim rule published as Item XXXVIII of DAC 91-6 is revised
and finalized. The rule implements Section 1372 of the Fiscal Year 1994
Defense Authorization Act (Pub. L. 103-160) as amended by Section 1142
of the Fiscal Year 1995 Defense Authorization Act (Pub. L. 103-337).
Section 1372 requires the Secretary of Defense to provide certain
notices regarding the proposed termination or substantial reduction of
major defense programs. The final rule differs from the interim rule in
that it makes clarifying revisions at DFARS 249.7003(b)(1) and 252.249-
7002(c)(1), and changes the notification periods at 249.7003(b) (2) and
(3) from 90 days to 60 days, as required by Section 1142 of Pub. L.
103-337.
Item XXXIX--Government Supply Sources
This final rule amends DFARS 251.102, adds a new section at
251.105, and amends the clause at 252.251-7000 to clarify that, when a
contractor is authorized to use Government supply sources (1) Payments
to the Government for such supplies are due within 30 days of the
Government's invoice; (2) contractors must pay interest on late
payments to the Government; and (3) a contractor's failure to pay may
result in loss of authorization to use Government supply sources.
Item XL--Editorials
(Note: The asterisked items are revisions being made only in the
looseleaf edition of DFARS.)
(a) The definition of ``contracting activity'' at DFARS Section
202.101 is amended to update the contracting activity names that appear
under the NAVY heading.
(b) The definition of ``contracting activity'' at DFARS Section
202.101 is amended by adding under the heading United States Special
Operations Command and after the word ``Headquarters,'' the words
``United States Special Operations Command'' that were inadvertently
removed in DAC 91-6.
(c) DFARS 203.502--2 is amended by revising paragraph (h)(ii) to
read ``Naval Criminal Investigative Service.''
*(d) DFARS 204.7202-2(b)(2)(iii)(B) to amended to revise ``Nay'' to
read ``Navy.''
(e) DFARS 206.302-5(c)(i)(B) is amended to revise the parenthetical
reference ``(Acquisition)'' to read ``(Acquisition & Technology).''
*(f) DFARS 215.804-3(b)(1)(B)(3) is amended to revise ``submisson''
to read ``submission.''
(g) DFARS 225.603(b)(i)(D) and (b)(ii) are amended to revise the
address for DCMAO, New York.
*(h) DFARS 225.872-5(a) is amended to revise ``bee'' to read
``been.''
(i) DFARS 225.872-5(a) is amended to reflect the correct title of
the Deputy Director of Defense Procurement (Foreign Contracting).
(j) DFARS 225.872-6(b) is amended to reflect the correct title of
the Deputy Director of Defense Procurement (Foreign Contracting).
*(k) DFARS 225.7001(c) is amended to revise ``speciality'' to read
``specialty.''
*(l) DFARS Table of Contents for section 226.71 is amended to
revise the title to read: ``Preference for Local and Small
Businesses.''
*(m) DFARS Table of Contents for section 232 is amended to reflect
the proper sequence of Subparts 232.7 and 232.8.
(n) DFARS 232.108(1)(i) is revised to update the Army finance
office designation.
(o) DFARS 235.006(b)(i)(C)(1)(iii) is revised to clarify the
references to applicable statutes.
(p) DFARS 235.015-70(d)(3)(ii) is amended by revising the word
``which'' to read ``who.''
(q) DFARS 237.7302 is amended to revise the reference ``10 U.S.C.
2304(a)(i)'' to read ``10 U.S.C. 2304(a)(1).''
*(r) DFARS 252 Table of Contents is amended to revise the title for
clause number 252.225-7018.
(s) DFARS 252.225-7009(f)(2)(iv) is amended to revise the address
for DCMAO, New York.
(t) DFARS 252.225-7010(e) is amended to revise the address for
DCMAO, New York.
(u) DFARS 252.225-7037(f)(2)(iv) is amended to revise the address
for DCMAO, New York.
*(v) DFARS 253 is amended to update DD Form 879, DD Form 1155 and
DD Form 1155C-1.
*(w) DFARS 253 is amended to delete the following obsolete forms:
DD Form 1114, DD Form 1568, DD Form 1592, and DD Form 2025. DD Form
1568 has been replaced by Standard form 1146. The other forms have no
replacement.
Interim Rules Adopted as Final Without Changes
PARTS 209 AND 252--[AMENDED]
The interim rule that was published at 59 FR 51130 on October 7,
1994, is adopted as final without change.
PARTS 219, 226, AND 252--[AMENDED]
The interim rule that was published as Item XLVII of DAC 91-6 at 59
FR 27662 on May 27, 1994, is adopted as final without change.
PART 231--[AMENDED]
The interim rule that was published at 59 FR 26143 on May 19, 1994,
is adopted as final without change.
PART 247--[AMENDED]
The interim rule that was published at 59 FR 50851 on October 6,
1994, is adopted as final without change.
Interim Rules Adopted as Final With Changes
PARTS 206, 222, 226, 237, AND 252--[AMENDED]
The interim rule that was published at 59 FR 36088 on July 15, 1994
is adopted as final with minor editorial amendments at sections
226.7200(a), 237.7400, 237.7401, 237.7402, and with the addition of
237.7401(d).
PARTS 219 AND 226--[AMENDED]
The interim rule that was published at 59 FR 12191 on March 16,
1994, as corrected at 59 FR 15501 on April 1, 1994, is adopted as final
with amendments at sections 226.7101 and 226.7103.
[[Page 29497]]
PARTS 219 AND 252--[AMENDED]
The interim rule that was published at 59 FR 24958 on May 13, 1994,
is adopted as final with revisions at 219.502-2-70, 252.219-7001,
252.219-7002, and 252.219-7006.
PARTS 225 AND 252--[AMENDED]
The interim rule that was published at 59 FR 1288 on January 10,
1994, as corrected at 59 FR 8041 on February 17, 1994 and at 59 FR
39974 on August 5, 1994, is adopted as final with amendments at
sections 225.408, 252.225-7035, and 252.225-7036.
PARTS 225 AND 252--[AMENDED]
The interim rule that was published as Item XLIV of DAC 91-6 at 59
FR 11729 on March 14, 1994, as corrected at 59 FR 38931 on August 1,
1994, is adopted as final with amendments at sections 225.7021-1 and
225.7021-3.
PARTS 225 AND 252--[AMENDED]
The interim rule that was published as Item XLVI of DAC 91-6 at 59
FR 19146 on April 22, 1994, is adopted as final with amendments at
section 225.7022-1.
PARTS 225, 252, AND 253--[AMENDED]
The interim rule that was published a Item XXIX of DAC 91-5 at 58
FR 28458 on May 13, 1993, is adopted as final with amendments at
225.7202 and 252.225-7026. In addition, DD Form 2139 is reinstated with
a new title and revised.
PARTS 247 AND 252--[AMENDED]
The interim rule was published as Item XLIV of DAC 91-6 at 59 FR
27662 on May 27, 1994, is adopted as final with amendments at 247.571,
247.573, and 252.247-7025.
PARTS 249 AND 252--[AMENDED]
The interim rule that was published as Item XXXVIII of DAC 91-6 at
59 FR 27662 on May 27, 1994, is adopted as final with amendments at
249.7003 and 252.249-7002.
List of Subjects in 48 CFR Parts 202, 203, 206, 207, 209, 215, 217,
219, 225, 226, 228, 231, 232, 235, 237, 242, 244, 245, 247, 249, 251,
252, 253, and Appendix C to Chapter 2
Government procurement.
Amendments to 48 CFR Chapter 2 (Defense Far Supplement)
48 CFR Chapter 2 (the Defense FAR Supplement) is amended as set
forth below.
1. The authority for 48 CFR parts 202, 203, 206, 207, 209, 215,
217, 291, 225, 226, 228, 231, 232, 235, 237, 242, 244, 245, 247, 249,
251, 252, 253, and Appendix C to Chapter 2 is revised to read as
follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 202--DEFINITIONS OF WORDS AND TERMS
202.101 [Amended]
2. Section 202.101 is amended by revising in the definition
entitled Contracting activity under the heading Navy, the entry
``Deputate, Acquisition Policy, Integrity and Accountability, Office of
the Assistant Secretary of the Navy (Research, Development, and
Acquisition)'' to read ``Deputy, Acquisition Policy, Integrity and
Accountability, Office of the Assistant Secretary of the Navy
(Research, Development, and Acquisition)''.
PART 203--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF
INTEREST
203.502-2 [Amended]
3. Section 203.502-2 is amended by revising in paragraph (h)(ii)
the phrase ``Naval Investigative Service'' to read ``Naval Criminal
Investigative Service.''
PART 206--COMPETITION REQUIREMENTS
206.302-5 [Amended]
4. Section 206.302-5 is amended by revising in paragraph (c)(i)(B)
the phrase ``Office of the Under Secretary of Defense for Acquisition''
to read ``Office of the Under Secretary of Defense (Acquisition &
Technology).''
5. Section 206.304 is amended by revising paragraphs (a)(4)(A)(2)
and (a)(4)(B) to read as follows:
206.304 Approval of the justification.
(a)(4)(A) * * *
(1) * * *
(2) In the case of the Under Secretary of Defense (Acquisition &
Technology) (USD(A&T)), to--
* * * * *
(B) For proposed contracts over $50 million, this authority is not
delegable, except in the case of the USD(A&T) who may delegate as
specified in paragraph (a)(4)(A)(2) of this section.
PART 207--ACQUISITION PLANNING
207.105 [Amended]
6. Section 207.105 is amended by removing paragraph (b)(2)(v).
PART 209--CONTRACTOR QUALIFICATIONS
209.103 [Amended]
7. Section 209.103(a)(i)(c) is amended by revising the reference
``Under Secretary of Defense (Acquisition)'' to read ``Under Secretary
of Defense (Acquisition & Technology).''
8. Section 209.104-1 is amended by revising paragraph (e) to read
as follows:
209.104-1 General standards.
(e) For cost-reimbursement or incentive type contracts, or
contracts which provide for progress payments based on costs or on a
percentage or stage of completion, the prospective contractor's
accounting system and related internal controls must provide reasonable
assurance that--
(i) Applicable laws and regulations are complied with;
(ii) The accounting system and cost data are reliable;
(iii) Risk of misallocations and mischarges are minimized; and
(iv) Contract allocations and charges are consistent with invoice
procedures.
* * * * *
9. Section 209.405-1 is added to read as follows:
209.405-1 Continuation of current contracts.
(a) Unless the agency head makes a written determination that a
compelling reason exists to do so, ordering activities shall not--
(i) Place orders exceeding the guaranteed minimum under indefinite
quantity contracts: or
(ii) When the agency is an optional user, place orders against
Federal Supply Schedule contracts.
(b) This includes exercise of options.
PART 215--CONTRACTING BY NEGOTIATION
10. Section 215.806-1 is amended by revising paragraph (a)(1) to
read as follows:
215.806-1 General.
* * * * *
(a)(1) Contractor and subcontractor proposals may reflect the
selection of sources whose proposals offer the greatest value to the
Government in terms of performance and other factors. If the selection
is based on greatest value rather than lowest price, the analysis
supporting subcontractor [[Page 29498]] selection should include a
discussion of the factors considered in the selection (see also FAR
15.605(c) and 215.605(c)). If the contractor's analysis is not
adequate, return it for correction of deficiencies.
* * * * *
PART 217--SPECIAL CONTRACTING METHODS
11. Section 217.7404-3 is amended by revising paragraph (a)(2) to
read as follows:
217.7404-3 Definitization schedule.
(a) * * *
(1) * * *
(2) The date on which the amount of funds obligated under the
contract action is equal to more than 50 percent of the not-to-exceed
price.
* * * * *
12. Section 217.7404-4 is revised to read as follows:
217.7404-4 Limitations on obligations.
The Government shall not obligate more than 50 percent of the not-
to-exceed price before definitization. However, if a contractor submits
a qualifying proposal before 50 percent of the not-to-exceed price has
been obligated by the Government, then the limitation on obligations
before definitization may be increased to no more than 75 percent (see
232.102-70 for coverage on provisional delivery payments).
13. Section 217.7404-5 is revised to read as follows:
217.7404-5 Exceptions.
(a) The limitations in 217.7404-2, 217.7404-3, and 217.7404-4 do
not apply to UCAs for the purchase of initial spares.
(b) The head of an agency may waive the limitations in 217.7404-2,
217.7404-3, and 217.7404-4 for UCAs if the head of the agency
determines that the waiver is necessary to support a contingency
operation.
PART 219--SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS CONCERNS
14. Section 219.502-2-70 is amended by revising paragraph
(a)(1)(ii) to read as follows:
219.502-2-70 Total set-asides for small disadvantaged business
concerns.
(a) * * *
(1) * * *
(i) * * *
(ii) In the case of an SDB regular dealer owned by an Indian tribe,
including an Alaska Native Corporation, will provide the supplies of a
small business for contracts awarded during fiscal years 1994 and 1995,
as provided in Section 8051 of Pub. L. 103-139 and Section 8012 of Pub.
L. 103-335; or,
* * * * *
PART 225--BUY AMERICAN ACT--CONSTRUCTION MATERIALS
15. Section 225.408 is amended by revising paragraph (a)(4)(B) to
read as follows:
225.408 Solicitation provision and contract clause.
(a)(1) * * *
* * * * *
(4)(A) * * *
(B)(i) Use the clause in all solicitations and contracts for the
items listed at 225.403-70, when the estimated value is $50,000 or more
and the Trade Agreements Act does not apply. Include the clause in
solicitations for multiple line items if any line item is subject to
NAFTA.
(ii) Use the clause with its Alternate I when the estimated value
is between $25,000 and $50,000.
* * * * *
225.603 [Amended]
16. Section 225.603 is amended in paragraph (b)(i)(D) by revising
the phrase ``Commander, DCMAO New York, ATTN: Customs Division,
International Logistics Office, 201 Varick Street, New York, NY 10014--
'' to read ``Commander, DCMAO New York, ATTN Customs Team, DCMDN-GNIC,
207 New York Avenue, Staten Island, NY 10305-5013--''.
225.603 [Amended]
17. Section 225.603 is amended in paragraph (b)(ii) by revising the
phrase ``Chief, Customs Division, International Logistics Office, DCMAO
New York'' to read ``Customs Team, DCMDN-GNIC, DCMAO New York''.
225.872-5 [Amended]
18. Section 225.872-5(a) is amended by revising ``Foreign
Contracting Directorate, Office of the Director of Defense
Procurement'' to read ``Deputy Director of Defense Procurement (Foreign
Contracting).''
225.872-6 [Amended]
19. Section 225.872-6(b) is amended by revising ``Foreign
Contracting Directorate, Office of the Director of Defense
Procurement'' to read ``Deputy Director of Defense Procurement (Foreign
Contracting).''
20. Section 225.7004-2 is amended by revising paragraph (b) to read
as follows:
225.7004-2 Applicability.
* * * * *
(b) Machine tool accessories classified under FSC 3460 or 3461 are
not components under 225.7004-5. Where a solicitation for machine tools
includes machine tool accessories, list known machine tool accessories
which are not separate line items in the provision at 252.225-7040,
Machine Tool List. Identify accessories which are separate line items
in the schedule. The contracting activity must exercise judgment in
determining whether an item is an accessory or a component. This
determination should be based on the use of the item in the machine
tool being purchased.
* * * * *
21. Section 225.7004-6 is amended by adding paragraph (c) to read
as follows:
225.7004-6 Contract clauses.
* * * * *
(c) Use the provision at 252.225-7040, Machine Tool List, in all
solicitations for machine tools which contain the clause at 252.225-
7017 except where--
(1) All machine tool accessories are listed as separate line items;
and
(2) The solicitation does not allow offerors to provide accessories
which are not specifically required by the specifications.
22. Section 225.7021-1 is revised to read as follows:
225.7021-1 Restriction.
In accordance with Section 8090 of the Fiscal Year 1994 Defense
Appropriations Act (Pub. L. 103-139) and Section 8075 of the Fiscal
Year 1995 Defense Appropriations Act (Pub. L. 103-335), do not purchase
aircraft fuel cells unless they are produced or manufactured in the
United States by a domestic-operated entity.
23. Section 225.7021-3 is revised to read as follows:
225.7021-3 Contract clause.
Unless a waiver has been granted in accordance with 225.7021-2, use
the clause at 252.225-7038, Restriction on Acquisition of Aircraft Fuel
Cells, in all solicitations and contracts which--
(a) Use fiscal year 1994 or 1995 funds; and
(b) Require delivery of aircraft fuel cells.
24. Section 225.7022-1 is revised to read as follows:
225.7022-1 Restriction.
In accordance with Section 8124 of the Fiscal Year 1994 Defense
Appropriations Act (Pub. L. 103-139) and Section 8093 of the Fiscal
Year 1995 Defense Appropriations Act (Pub. [[Page 29499]] L. 103-335),
do not purchase a totally enclosed lifeboat survival system, which
consists of the lifeboat and associated davits and winches, unless 50
percent or more of the components are manufactured in the United
States, and 50 percent or more of the labor in the final manufacture
and assembly of the entire system is performed in the United States.
25. Section 225.7202 is amended by revising ``OUSD(A)DP(FC)'' to
read ``OUSD(A&T)DP(FC).''
PART 226--OTHER SOCIOECONOMIC PROGRAMS
26-28. Section 226.7101 is revised to read as follows:
226.7101 Definition.
Vicinity, as used in this subpart, means the county or counties in
which the military installation to be closed or realigned is located
and all adjacent counties, unless otherwise defined by the agency head.
29. Section 226.7103 is revised to read as follows:
226.7103 Procedure.
In considering acquisitions for award through the section 8(a)
program (subpart 219.8 and FAR subpart 19.8) or in making set-aside
decisions under subpart 219.5 and FAR subpart 19.5 for acquisitions in
support of a base closure or realignment, the contracting officer
shall--
(a) Determine whether there is a reasonable expectation that offers
will be received from responsible business concerns located in the
vicinity of the military installation that is being closed or
realigned.
(b) If offers can not be expected from business concerns in the
vicinity, proceed with section 8(a) or set-aside consideration as
otherwise indicated in part 219 and FAR part 19.
(c) If offers can be expected from business concerns in the
vicinity--
(1) Consider section 8(a) only if the 8(a) contractor is located in
the vicinity.
(2) Set aside the acquisition for small disadvantaged business only
if one of the expected offers is from a small disadvantaged business
located in the vicinity.
(3) Set aside the acquisition for small business only if one of the
expected offers is from a small business located in the vicinity.
226.7200 [Amended]
30 and 31. Section 226.7200 is amended by revising in paragraph (a)
the word ``established'' to read ``establishes.''
PART 228--BONDS AND INSURANCE
32. Section 228.102-1 is amended by revising the introductory
paragraph to read as follows:
228.102-1 General.
For Defense Environmental Restoration Program construction
contracts entered into pursuant to 10 U.S.C. 2701 and executed between
December 5, 1991, and December 31, 1999--
* * * * *
PART 231--CONTRACT COST PRINCIPLES AND PROCEDURES
231.205-70 [Amended]
33. Section 231.205-70(b)(4) is amended to revise in the second
sentence the word ``repositioning'' to read ``repositionings.''
231.703 [Amended]
34. Section 231.703 is amended to revise in paragraph (1) the
reference ``231.603(a)'' to read ``231.603(1).''
PART 232--CONTRACT FINANCING
232.108 [Amended]
35. Section 232.108 is amended by revising in paragraph (1)(i) the
phrase ``Army--Chief of Contract Financing, Office of the Comptroller''
to read ``Army--Office, Assistant Secretary of the Army (Financial
Management)''.
36. Section 232.503-6 is amended by adding a new paragraph (b) to
read as follows:
232.503-6 Suspension or reduction of payments.
(b) Contractor noncompliance.
See also 242.7503.
* * * * *
PART 235--RESEARCH AND DEVELOPMENT CONTRACTING
37. Section 235.001 is revised to read as follows:
235.001 Definitions.
The following terms are defined in DoD 7000.14-R, Financial
Management Regulation. As used in this part--
Advanced development means all effort directed toward projects
which have moved into the development of hardware for test. The prime
proof of this type of effort is proof of design concept rather than the
development of hardware. Projects in this category have a potential
military application.
Basic research means all effort of scientific study and
experimentation directed toward increasing knowledge and understanding
in those fields of the physical, engineering, environmental, and life
sciences related to long-term national security needs, It provides
fundamental knowledge required for the solution of military problems.
It forms a part of the base for--
(1) Subsequent exploratory and advanced developments in defense
related technologies; and
(2) New or improved military functional capabilities in areas such
as communications, detection, tracking, surveillance, propulsion,
mobility, guidance and control, navigation, energy conversion,
materials and structures, and personnel support.
Demonstration/validation means those efforts necessary to evaluate
integrated technologies in as realistic an operating environment as
possible to assess the performance or cost reduction potential of
advanced technology. The demonstration/validation phase is system
specific and also includes advanced technology demonstrations that help
expedite technology transition from the laboratory to operational use.
Engineering and manufacturing development means those projects in
full-scale engineering development but which have not yet received
approval for production or had production funds included in the DoD
budget submission for the budget or subsequent fiscal year. This area
is characterized by major line item projects where program control is
exercised by review of individual projects.
Exploratory development means all effort directed toward the
solution of specific military problems, short of major development
projects. This type of effort may vary from fairly fundamental applied
research to quite sophisticated bread-board hardware, study,
programming, and planning efforts. It would thus include studies,
investigations, and minor development effort. The dominant
characteristic of this category of effort is that it be pointed toward
specific military problem areas with a view toward developing and
evaluating the feasibility and practicability of proposed solutions and
determining their parameters.
Management and support means all effort directed toward support of
installations and operations required for general research and
development use. This includes military construction of a general
nature unrelated to specific programs, maintenance support of
laboratories, operation and maintenance of test ranges, and maintenance
of test aircraft and ships. Costs of laboratory personnel, either in-
house or contracted, would be assigned to projects or as a line item in
the research, exploratory development, or advanced development
[[Page 29500]] program areas, as appropriate. Management and support is
not ``research and development'' except in exceptional cases. For
example, construction of recreational facilities at an installation is
not ``research and development'' work, even if the installation is used
only for research and development work.
Operational system development means those projects still in full-
scale engineering development, but which have received approval for
production through Defense Acquisition Board or other action, or
production funds have been included in the DoD budget submission for
the budget or subsequent year. All items in this area are major line
item projects which appear as RDT&E costs of weapons systems elements
in other programs. Program control is exercised by review of the
individual projects.
Research and development ordinarily covers only the following
categories--
(1) Basic research;
(2) Exploratory development;
(3) Advanced development;
(4) Demonstration/validation;
(5) Engineering and manufacturing development; and
(6) Operational system development.
38. Section 235.006 is amended by revising paragraph
(b)(i)(C)(1)(iii) to read as follows:
235.006 Contracting methods and contract type.
* * * * *
(b)(i) * * *
(C) * * *
(1) * * *
(iii) The development of a major system (as defined in FAR 34.001)
or subsystem thereof, it the contract is over $25 million, or is over
$10 million and is funded with FY90 funds (Pub. L. 101-165, Section
9048), FY91 funds (Pub. L. 101-511, Section 8038), FY92 funds (Pub. L.
102-172, Section 8037), or FY93 funds (Pub. L. 102-396, Section 9037).
* * * * *
39. Section 235.010 is revised to read as follows:
235.010 Scientific and technical reports.
(b) The Defense Technical Information Center (DTIC) is responsible
for collecting all scientific or technological observations, findings,
recommendations, and results derived from DoD endeavors, including both
in-house and contracted efforts. The DTIC has eligibility and
registration requirements for use of its services. Requests for
eligibility and registration information should be addressed to DTIC-
BCS, Cameron Station, Alexandria, VA 22304-6145.
235.015-70 [Amended]
40. Section 235.015-70(d)(3)(ii) is amended by revising the second
occurrence of the word ``which'' to read ``who.''
41. Section 235.071 is amended by adding paragraphs (c) and (d) to
read as follows:
235.071 Additional contract clauses.
(a) * * *
(b) * * *
(c) Use the clause at 252.235-7010, Acknowledgement of Support and
Disclaimer, in solicitations and contracts for research and
development.
(d) Use the clause at 252.235-7011, Final Scientific or Technical
Report, in solicitations and contracts for research and development.
42. Section 235.017-1 is added to read as follows:
235.017-1 Sponsoring agreements.
(c)(4) DoD-sponsored FFRDCs that function primarily as research
laboratories may respond to solicitations and announcements for
programs which promote research, development, demonstration, or
transfer of technology (Section 217, Pub. L. 103-337).
PART 237--SERVICE CONTRACTING
237.7302 [Amended]
43. Section 237.7302 is amended by revising in the last sentence
the reference ``10 U.S.C. 2304(a)(i)'' to read ``10 U.S.C.
2304(a)(1).''
237.7400 [Amended]
44. Section 237.7400 is amended by revising the reference ``(Pub.
L. 100-536)'' to read ``(Pub. L. 100-526).''
45. Section 237.7401 is amended in paragraph (c) by revising
``govenrment'' to read ``government;'' by revising the word ``is'' to
read ``are''; and by adding a new paragraph (d) to read as follows:
237.7401 Policy.
* * * * *
(d) Includes the requirement of subpart 222.71, Right of First
Refusal of Employment, unless it conflicts with the local government's
civil service selection procedures.
237.7402 [Amended]
46. Section 237.7402 is amended by revising the word ``subject'' to
read ``subpart.''
PART 242--CONTRACT ADMINISTRATION
47. Section 242.302 is amended by adding a new paragraph (a)(7) to
read as follows:
242.302 Contract administration functions.
(a)(4) * * *
(7) See 242.7503 for ACO responsibilities with regard to receipt of
an audit report identifying significant accounting system or related
internal control deficiencies.
* * * * *
48. Section 242.1104 is revised to read as follows:
242.1104 Surveillance requirements.
(a)(i) As a minimum, contracts will receive pre-delivery telephonic
surveillance.
(ii) Contracts in the following categories will receive pre-
delivery on-site production surveillance:
(A) Contracts assigned criticality designator A (see FAR 42.1105).
(B) Contracts specifically identified for special surveillance by
the contracting officer.
(C) Any contract where telephonic surveillance reveals actual or
anticipated delinquency unless the contract administration office, in
coordination with the contracting officer, decides that on-site
surveillance is not warranted.
49. Section 242.7302 is amended by revising paragraph (a) and by
adding paragraph (d) to read as follows:
242.7302 Requirements.
(a) A CIPR shall be conducted for each contractor whose qualifying
sales to the Government exceeded $40 million during the contractor's
preceding fiscal year. Qualifying sales are sales for which certified
cost or pricing data were required under 10 U.S.C. 2306, as implemented
in FAR 15.804 (unless exempt in accordance with FAR 15.804-3), or which
are cost-reimbursement type contracts. Sales include prime contracts,
subcontracts, and modifications to such contracts and subcontracts.
* * * * *
(d) Reviews of selected insurance and pension elements may be
conducted for contractors not meeting the criteria in paragraph (a) of
this section if significant problems have been identified.
50. A new subpart 242.75 is added to read as follows:
Sec.
242.7500 Scope of subpart.
242.7501 Definition.
242.7502 Policy.
242.7503 Procedures.
Subpart 242.75--Contractor Accounting Systems and Related Controls
242.7500 Scope of subpart.
This subpart provides policies and procedures applicable to
contractor [[Page 29501]] accounting systems and related internal
controls.
242.7501 Definition.
Internal controls means those policies and procedures established
by contractor management to provide reasonable assurance that
applicable laws and regulations are complied with and that actual and
estimated costs are equitably allocated within the accounting system.
242.7502 Policy.
Contractors receiving cost-reimbursement or incentive type
contracts, or contracts which provide for progress payments based on
costs or on a percentage or stage of completion, shall maintain an
accounting system and related internal controls throughout contract
performance which provide reasonable assurance that--
(a) Applicable laws and regulations are complied with;
(b) The accounting system and cost data are reliable;
(c) Risk of misallocations and mischarges are minimized; and
(d) Contract allocations and charges are consistent with invoice
procedures.
242.7503 Procedures.
(a) Upon receipt of an audit report identifying significant
accounting system or related internal control deficiencies, the ACO
will--
(1) Provide a copy of the report to the contractor and allow 30
days, or a reasonable extension, for the contractor to respond;
(2) If the contractor agrees with the report, the contractor has 60
days from the date of initial notification to correct any identified
deficiencies or submit a corrective action plan showing milestones and
actions to eliminate the deficiencies.
(3) If the contractor disagrees, the contractor should provide
rationale in its written response.
(4) The ACO will consider whether it is appropriate to suspend a
percentage of progress payments or reimbursement of costs proportionate
to the estimated cost risk to the Government, considering audit reports
or other relevant input, until the contractor submits a corrective
action plan acceptable to the ACO and corrects the deficiencies. (See
FAR 32.503-6 (a) and (b) and FAR 42.302(a)(7)).
PART 244--SUBCONTRACTING POLICIES AND PROCEDURES
51. Subpart 244.2 is added to read as follows:
244.2 Consent to subcontracts.
Sec.
244.202 Contracting officer's evaluation.
244.202-2 Considerations.
242.2 Consent to subcontracts.
244.202 Contracting officer's evaluation.
244.202-2 Considerations.
(a) Where other than lowest price is the basis for subcontractor
selection, has the contractor adequately substantiated the selection as
offering the greatest value to the Government?
PART 245--GOVERNMENT PROPERTY
52. Section 245.608-70 is amended by revising paragraph (a)(3) to
read as follows:
245.608-70 Contractor inventory redistribution system (CIRS).
(a) * * *
(3) Has a line item acquisition value in excess of $1,000 ($500 for
furniture) but no national stock number.
* * * * *
PART 247--TRANSPORTATION
53. Section 247.305-70 is revised to read as follows:
247.305-70 Returnable containers other than cylinders.
Use the clause at 252.247-7021, Returnable Containers Other Than
Cylinders, in solicitations and contracts for supplies involving
contractor-furnished returnable reels, spools, drums, carboys, liquid
petroleum gas containers, or other returnable containers if the
contractor is to retain title to the containers.
54. Section 247.571 is amended by revising paragraph (c); by
removing paragraph (d); and by redesignating paragraph (e) as paragraph
(d) to read as follows:
247.571 Policy.
* * * * *
(c)(1) Any vessel used under a time charter contract for the
transportation of supplies shall have any reflagging or repair work, as
defined in the clause at 252.247-7205, Reflagging or Repair Work,
performed in the United States or its territories, if the reflagging or
repair work is performed--
(i) On a vessel for which the contractor submitted an offer in
response to the solicitation for the contract; and
(ii) Prior to acceptance of the vessel by the Government.
(2) The Secretary of Defense may waive this requirement if the
Secretary determines that such waiver is critical to the national
security of the United States.
* * * * *
55. Section 247.573 is amended by revising paragraph (d) to read as
follows:
247.573 Solicitation provision and contract clauses.
* * * * *
(d) Use the clause at 252.247-7025, Reflagging or Repair Work, in
all time charter solicitations and contracts for the use of a vessel
for the transportation of supplies, unless a waiver has been granted in
accordance with 247.571(c).
PART 249--TERMINATION OF CONTRACTS
249.7003 [Amended]
56. Section 249.7003 is amended by inserting in paragraph (b)(1)
the word ``major'' between the words ``which'' and ``defense;'' by
revising in paragraph (d)(2) introductory text the number ``90'' to
read ``60;'' by revising in paragraph (b)(3) introductory text the
number ``90'' to read ``60;'' and by removing in paragraph (b)(3)
introductory text the word ``provided.''
PART 251--USE OF GOVERNMENT SOURCES BY CONTRACTORS
57. Section 251.102 is amended to revise paragraph (e) introductory
text and to add a new paragraph (f) to read as follows:
251.102 Authorization to use Government supply sources.
(e) Use the format in Table 51-1, Authorization to Purchase from
Government Supply Sources. Specify the terms of the purchase, including
contractor acceptance of any Government materiel, payment terms, and
the addresses required by paragraph (f) of the clause at 252.251-7000,
Ordering from Government Supply Sources.
* * * * *
(f) The authorizing agency shall also be responsible for promptly
considering requests of the DoD supply source for authority to refuse
to honor requisitions from a contractor which is indebted to the DoD
and has failed to pay proper invoices in a timely manner.
* * * * *
58. Section 251.105 is added to read as follows:
251.105 Payment for shipments.
Contractor payments for purchases from DoD supply sources are due
within 30 days of the date of a proper invoice (see FAR 32.902 for
definition of ``due [[Page 29502]] date'' and ``payment date;'' also
see FAR 32.905(e)).
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
252.209-7004 [Amended]
59. and 60. Section 252.209-7004 is amended by revising in
paragraph (b)(5) the symbol ``PDUSD(A&T)(DPFC)'' to read
``OUSD(A&T)DP(FC).''
61. Section 252.219-7001 is amended by revising the clause date
``(May 1994)'' ``(May 1995)''; and by revising paragraph (f)(2) to read
as follows:
252.219-7001 Notice of partial small business set-aside with
preferential consideration for small disadvantaged business concerns.
* * * * *
(f) * * *
(2) A manufacturer or regular dealer, which claims preference as
a small disadvantaged business and submits an offer in its own name,
agrees to furnish in performing this contract only end items
manufactured or produced by small disadvantaged business concerns in
the United States, except, as provided in Section 8051 of Pub. L.
103-139 and Section 8012 of Pub. L. 103-335, for contracts awarded
during fiscal years 1994 and 1995, a small disadvantaged business
manufacturer or regular dealer owned by an Indian tribe, including
an Alaska Native Corporation, agrees to furnish only end items
manufactured or produced by small business concerns in the United
States.
* * * * *
62. Section 252.219-7002 is amended by revising the clause date
``(MAY 1994)'' to read ``(MAY 1995)''; and by revising paragraph (c) to
read as follows:
252.219-7002 Notice of small disadvantaged business set-aside.
* * * * *
(c) Agreement.
A small disadvantaged business manufacturer or regular dealer,
submitting an offer in its own name, agrees to furnish in performing
this contract only end items manufactured or produced by small
disadvantaged business concerns in the United States, except, as
provided in Section 8051 of Pub. L. 103-139 and Section 8012 of Pub.
L. 103-335, for contracts awarded during fiscal years 1994 and 1995,
a small disadvantaged business manufacturer or regular dealer owned
by an Indian tribe, including an Alaska Native Corporation, agrees
to furnish only end items manufactured or produced by small business
concerns in the United States.
* * * * *
63. Section 252.219-7006 is amended by revising the clause date
``(MAY 1994)'' to read ``(MAY 1995)''; and by revising paragraph (d)(2)
to read as follows:
252.219-7006 Notice of evaluation preference for small disadvantaged
business concerns.
* * * * *
(d) * * *
(2) A small disadvantaged business, historically black college
or university, or minority institution regular dealer submitting an
offer in its own name agrees to furnish in performing this contract
only end items manufactured or produced by small disadvantaged
business concerns, historically black colleges or universities, or
minority institutions in the United States, except, as provided in
Section 8051 of Pub. L. 103-139 and Section 8012 of Pub. L. 103-335,
for contracts awarded during fiscal years 1994 and 1995, a small
disadvantaged business manufacturer or regular dealer owned by an
Indian tribe, including an Alaska Native Corporation, agrees to
furnish only end items manufactured or produced by small business
concerns in the United States.
* * * * *
252.225-7009 [Amended]
64. Section 252.225-7009 is amended to revise in paragraph
(f)(2)(iv) the phrase ``Customs Division, International Logistics
Office, 201 Varick Street, New York, New York 10014'' to read ``Customs
Team, DCMDN-GNIC, 207 New York Avenue, Staten Island, New York, 10305-
5013.''
252.225-7010 [Amended]
65. Section 252.225-7010 is amended to revise in paragraph (e)
introductory text the phrase ``Chief, Customs Division, International
Logistics Office, 201 Varick Street, New York, New York 10014'' to read
``Customs Team, DCMDN-GNIC, 207 New York Avenue, Staten Island, New
York, 10305-5013.''
66. Section 252.225-7026 is amended by revising the clause date
``(APR 1993)'' to read ``(MAY 1995)''; by revising paragraph (b)(3); by
adding a new paragraph (b)(4); and by revising paragraph (d) to read as
follows:
252.225-7026 Reporting of contract performance outside the United
States.
* * * * *
(b) * * *
(1) * * *
(2) * * *
(3) The Contractor shall submit reports required by paragraph
(a)(3) of this clause within 10 days of the end of each Government
quarter to--Deputy Director of Defense Procurement (Foreign
Contracting) OUSD(A&T)DP(FC) Washington, DC 20301-3060
(4) The Offeror/Contractor shall submit reports on DD Form 2139,
Report of Contract Performance Outside the United States. Computer-
generated reports are acceptable, provided the report contains all
information required by DD Form 2139. Copies of DD Form 2139 may be
obtained from the Contracting Officer.
(c) * * *
(d) Information required.
Information to be reported on the part of this contract
performed outside the United States (or outside the United States
and Canada for reports required by paragraphs (a)(1) and (a)(2) of
this clause) includes that for--
(i) Subcontracts;
(ii) Purchases; and
(iii) Intracompany transfers when transfers originate in a
foreign location.
67. Section 252.225-7035 is amended by revising the clause date
``(JAN 1994)'' read ``(MAY 1995)''; and by revising paragraph
(c)(2)(ii) to read as follows:
252.225-7035 Buy American Act--North American Free Trade Agreement
Implementation Act--Balance of Payments Program Certificate.
* * * * *
(c) * * *
(2) * * *
(i) * * *
(ii) The Offeror certifies that the following supplies are
qualifying country (except Canada) end products:
* * * * *
68. Section 252.225-7036 is amended by adding a new Alternate I
(MAY 1995) to read as follows:
252.225-7036 North American Free Trade Agreement Implementation Act.
* * * * *
ALTERNATE I (MAY 1995)
As prescribed in 225.408(a)(4)(B)(ii), add the following
paragraph (a)(7) to the basic clause, and substitute the following
paragraph (c) in place of paragraph (c) of the basic clause:
(a)(7) ``Canadian end product,'' means an article that--
(i) Is wholly the growth, product, or manufacturer of Canada; or
(ii) Has, in the case of an article which consists in whole or
in part of materials from another country or instrumentality, been
substantially transformed in Canada into a new and different article
of commerce with a name, character, or use distinct from that of the
article or articles from which it was transformed. The term includes
services (except transportation services) incidental to its supply;
provided, that the value of those incidental services does not
exceed that of the product itself. It does not include service
contracts as such.
(c) The Contractor agrees to deliver under this contract only
U.S. made end products unless, in its offer, it specified delivery
of qualifying country, NAFTA country, or non-NAFTA country end
products in the Buy American Act-North American Free Trade Agreement
Implementation Act-Balance of Payments Program Certificate
provision. An offer certifying that a qualifying country end product
or a Canadian end product will be supplied requires the Contractor
to supply a qualifying country end product or a Canadian end
product, whichever is certified, or, at the Contractor's option, a
U.S. made end product. [[Page 29503]]
252.225-7037 [Amended]
69. Section 252.225-7037 is amended to revise in paragraph
(f)(2)(iv) the phrase ``Customs Division, International Logistics
Office, 201 Varick Street, New York, NY 10014'' to read ``Customs Team,
DCMDN-GNIC, 207 New York Avenue, Staten Island, New York 10305-5013.''
70. Section 252.225-7040 is added to read as follows:
252.225-7040 Machine tool list.
As prescribed in 225.7004-5(c), use the following provision:
Machine Tool List (May 1995)
The Government has identified those items listed as machine tool
accessories which are not listed in the schedule as separate line
items. The Offeror must also list any accessories to be provided
which are not specifically required by the specifications. Where the
machine tool accessory is not of U.S. or Canadian origin, as defined
in the Preference for United States and Canadian Valves and Machine
Tools clause of this solicitation, indicate the country in which the
accessory was manufactured and the cost of the accessory.
------------------------------------------------------------------------
Country of
Line Item No. Accessory manufacture Cost
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
(End of provision)
71. Section 252.235-7010 is added to read as follows:
252.235-7010 Acknowledgment of support and disclaimer.
As prescribed in 235.071(c), use the following clause:
Acknowledgment of Support and Disclaimer (May 1995)
(a) The Contractor shall include an acknowledgment of the
Government's support in the publication of any material based on or
developed under this contract, stated in the following terms: This
material is based upon work supported by the (name of contracting
agency(ies)) under Contract No. (Contracting agency(ies) contract
number(s)).
(b) All material, except scientific articles or papers published
in scientific journals, must, in addition to any notices or
disclaimers by the Contractor, also contain the following
disclaimer: Any opinions, findings and conclusions or
recommendations expressed in this material are those of the
author(s) and do not necessarily reflect the views of the (name of
contracting agency(ies)).
(End of clause)
72. Section 252.235-7011 is added to read as follows:
252.235-7011 Final scientific or technical report.
As prescribed in 235.071(d), use the following clause:
Final Scientific or Technical Report (May 1995)
The Contractor shall submit two copies of the approved
scientific or technical report delivered under this contract to the
Defense Technical Information Center (DTIC), Attn: DTIC-)OC, Cameron
Station, Alexandria, VA 22304-6145. The Contractor shall include a
completed Standard Form 298, Report Documentation Page, with each
copy of the report. For submission of reports in other than paper
copy, contact the Defense Technical Information Center, Attn: DTIC-
OC, Cameron Station, Alexandria, VA 22304-6145.
(End of clause)
252.237-7022 [Amended]
73. Section 252.237-7022 is amended by revising the clause date
``(JUL 1994)'' to read ``(MAY 1995)'' and by revising at their second
occurrence the words ``the local'' to read ``such.''
74. Section 252.247-7021 is revised to read as follows:
252.247-7021 Returnable containers other than cylinders.
As prescribed in 247.305-70, use the following clause:
Returnable Containers Other Than Cylinders (May 1995)
(a) Returnable container, as used in this clause, includes
reels, spools, drums, carboys, liquid petroleum gas containers, and
other returnable containers when the Contractor retains title to the
container.
(b) Returnable containers shall remain the Contractor's property
but shall be loaned without charge to the Government for a period of
______(insert number of days) calendar days after delivery to the
f.o.b. point specified in the contract. Beginning with the first day
after the loan period expires, to and including the day the
containers are delivered to the Contractor (if the original delivery
was f.o.b. origin) or are delivered or are made available for
delivery to the Contractor's designated carrier (if the original
delivery was f.o.b. destination), the Government shall pay the
Contractor a rental of $______ (insert dollar amount for rental) per
container per day, computed separately for containers for each type,
size, and capacity, and for each point of delivery named in the
contract. No rental shall accrue to the Contractor in excess of the
replacement value per container specified in paragraph (c) of this
clause.
(c) For each container lost or damaged beyond repair while in
the Government's possession, the Government shall pay to the
Contractor the replacement value as follows, less the allocable
rental paid for that container:
----------------------------------------------------------------------
(Insert the container types, sizes, capacities, and associated
replacement values.)
These containers shall become Government property.
(d) If any lost container is located within ______ (insert
number of days) calendar days after payment by the Government, it
may be returned to the Contractor by the Government, and the
Contractor shall pay to the Government the replacement value, less
rental computed in accordance with paragraph (b) of this clause,
beginning at the expiration of the loan period specified in
paragraph (b) of this clause, and continuing to the date on which
the container was delivered to the Contractor.
(End of clause)
75. Section 252.247-7025 is revised to read as follows:
252.247-7025 Reflagging or repair work.
As prescribed in 247.573(d), use the following clause:
Reflagging or Repair Work (May 1995)
(a) Definition.
Reflagging or repair work, as used in this clause, means work
performed on a vessel--
(1) To enable the vessel to meet applicable standards to become
a vessel of the United States; or
(2) To convert the vessel to a more useful military
configuration.
(b) Requirement. Unless the Secretary of Defense waives this
requirement, reflagging or repair work shall be performed in the
United States or its territories, if the reflagging or repair work
is performed--
(1) On a vessel for which the Contractor submitted an offer in
response to the solicitation for this contract; and
(2) Prior to acceptance of the vessel by the Government.
(End of clause)
76. Section 252.249-7002 is amended by revising the clause date
``(MAY 1994)'' to read ``(MAY 1995)'' and by revising paragraph (c)(1)
to read as follows:
252.249-7002 Notification of proposed program termination or
reduction.
* * * * *
(c) * * *
(1) Each employee representative of the Contractor's employees
whose work is related to the program and who may be impacted in the
event of a termination or substantial reduction; or
* * * * *
77. Section 252.251-7000 is amended by revising the clause date
``(DEC 1991)'' to read ``(MAY 1995)''; by revising paragraph (d)(4);
and by adding a new paragraph (f) to read as follows:
252.251-7000 Ordering from Government supply sources.
* * * * *
(d) * * *
(1) * * *
(2) * * *
(3) * * * [[Page 29504]]
(4) Pay invoices from Government supply sources promptly. For
purchases made from DoD supply sources, this means within 30 days of
the date of a proper invoice (see also Defense Federal Acquisition
Regulation Supplement (DFARS) 251.105). For purposes of computing
interest for late Contractor payments, the Government's invoice is
deemed to be a demand for payment in accordance with the Interest
clause of this contract. The Contractor's failure to pay may also
result in the DoD supply source refusing to honor the requisition
(see DFARS 251.102(f)) or in the Contracting Officer terminating the
Contractor's authorization to use DoD supply sources. In the event
the Contracting Officer decides to terminate the authorization due
to the Contractor's failure to pay in a timely manner, the
Contracting Officer shall provide the Contractor with prompt written
notice of the intent to terminate the authorization and the basis
for such action. The Contractor shall have 10 days after receipt of
the Government's notice in which to provide additional information
as to why the authorization should not be terminated. Such
termination shall not provide the Contractor with an excusable delay
for failure to perform or complete the contract in accordance with
the terms of the contract, and the Contractor shall be solely
responsible for any increased costs.
(e) * * *
(f) Government invoices shall be submitted to the Contractor's
billing address, and Contractor payments shall be sent to the
Government remittance address specified below:
Contractor's Billing Address (include point of contact and telephone
number):
Government Remittance Address (include point of contact and
telephone number):
(End of clause)
PART 253--FORMS
78. Section 253.209-1 is amended by revising paragraph (a)(i)(E) to
read as follows:
253.209-1 Responsible prospective contractors.
(a) * * *
(i) * * *
(E) Accounting system and related internal controls. An
assessment by the auditor of the adequacy of the prospective
contractor's accounting system and related internal controls as
defined in 242.7501, Definition. Normally, a contracting officer
will request an accounting system review when soliciting and
awarding cost-reimbursement or incentive type contracts, or
contracts which provide for progress payments based on costs or on a
percentage or stage of completion.
* * * * *
253.215-70 [Amended]
79. At the end of section 253.215-70, Form 253.303-2139, Report of
Contract Performance Outside the United States, is added in numerical
order to the DFARS Form List.
Appendix C to Chapter 2
80. Appendix C to Chapter 2, Section C-207.5 is amended by revising
paragraph (b) to read as follows:
C-207.5 Subcontractor responsibility and vendor performance rating
system (IIG5).
(a) * * *
(b) Vendor performance rating systems. Contractor vendor
performance rating systems may be a valuable element in the
contractor's selection of subcontractors that offer the greatest
value to the Government. State in the report whether the contractor
has a vendor rating system. If the contractor has a system in place,
evaluate its effectiveness in selecting sources. Consider whether
the system--
(1) Allows consistency of comparisons among competing
subcontractors;
(2) Protects rating information;
(3) Provides appropriate documentation for each element rated;
(4) Allows adequate opportunities for new subcontractors to compete;
(5) Provides for evaluations by appropriate functional areas; and
(6) Is kept current and accurate.
[FR Doc. 95-13061 Filed 6-2-95; 8:45 am]
BILLING CODE 3810-01-M
