[Federal Register Volume 60, Number 64 (Tuesday, April 4, 1995)]
[Proposed Rules]
[Pages 17184-17186]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-8145]
[[Page 17183]]
_______________________________________________________________________
Part VI
Department of Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Parts 12 and 52
Federal Acquisition Regulation, Subcontracts for Commercial Items;
Proposed Rule; Correction
Federal Register / Vol. 60, No. 64 / Tuesday, April 4, 1995 /
Proposed Rules
[[Page 17184]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 12 and 52
[FAR Case 94-791]
Federal Acquisition Regulation; Subcontracts for Commercial
Items; Correction
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule correction.
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SUMMARY: In related actions Federal Acquisition Regulation (FAR) case
94-790 proposed to implement statutory authorities for the acquisition
of commercial items and components by Federal Government agencies as
well as contractors and subcontractors and FAR case 94-791 proposed a
complete list of laws determined to be inapplicable to Executive agency
contracts and subcontracts for commercial items and clauses applicable
to subcontracts for the acquisition of commercial items. Neither of
these cases addressed the statutory authority for the Comptroller
General to examine the records of contractors. This amendment corrects
that omission.
DATES: Comments should be submitted on or before May 22, 1995 to be
considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to:
General Services Administration, FAR Secretariat (VRS), 18th & F
Streets, NW, Room 4037, Washington, DC 20405.
Please cite FAR case 94-791 in all correspondence related to this
case.
FOR FURTHER INFORMATION CONTACT: Colonel Laurence M. Trowel, Commercial
Items Team Leader, at (703) 695-3858 in reference to this correction.
For general information, contact the FAR Secretariat, Room 4037, GS
Building, Washington, DC 20405 (202) 501-4755. Please cite FAR case 94-
791 correction.
SUPPLEMENTARY INFORMATION:
A. Background
FAR cases 94-790, Acquisition of Commercial Items, and 94-791,
Subcontracts for Commercial Items, were published as proposed rules
with request for comment at 60 FR 11198; March 1, 1995 and 60 FR 15220;
March 22, 1995, respectively. In addition to these changes, the Federal
Acquisition Streamlining Act (FASA) of 1994 also consolidated audit
provisions and made other related revisions to the Government's
authority to examine records of contractors by amending 10 U.S.C. 2313
(section 2201(a)) and by adding 41 U.S.C. 254d (section 2251(a)). These
audit related sections were proposed to be implemented by FAR case 94-
740 published at 59 FR 66408; December 23, 1994. The proposed language
contained in FAR case 94-740 includes the authority for both the
Comptroller General and Agency examination of records in a single
clause. However, the clause will only be included in contracts for the
acquisition of commercial items, when an exception to the requirement
for cost or pricing data under FAR 15.804-1(a) does not apply. As a
result, contracts for commercial items that qualify for the exception
to the requirements for cost or pricing data will not contain language
providing the Comptroller General the authority to examine records as
required by 10 U.S.C. 2313(c) and 41 U.S.C. 254d(c). To remedy this
oversight, we propose to make the following amendments to FAR case 94-
791:
Revise the clause at 52.212-5, Contract Terms and
Conditions Required to Implement Statutes or Executive Orders--
Commercial Items, by adding a new paragraph (d) to address the
Comptroller General authority granted in the two statutes. The balance
of the clause remains unchanged from that published in the Federal
Register at 60 FR 11198. This revision will provide the Comptroller
General the authority to examine records when:
(1) The contract was awarded by other than sealed bid;
(2) The contract is above the simplified acquisition threshold; and
(3) The clause at 52.215-2, Audit and Records--Negotiation, is not
included in the contract. When cost or pricing data is required, the
contracting officer will incorporate the appropriate Part 15 clauses,
to include the clause proposed at 52.215-2, Audit and Records--
Negotiation (see FAR Case 94-740). This clause provides for both the
Comptroller General and Agency authority to examine records. The
Commercial Items Team has chosen to revise the clause at 52.212-5 to
add coverage for the Comptroller General specifically tailored to the
acquisition of commercial items rather than cite the applicable
portions of the clause at 52.215-2. This approach will clearly and more
simply establish the Comptroller General's right to examine records for
contracts for commercial items.
Revise FAR 12.403, Applicability of certain laws to
subcontracts for the acquisition of commercial items, to include 10
U.S.C. 2313(c) and 41 U.S.C. 254d(c) in the list of laws not applicable
to subcontracts for commercial items. Paragraph (c) of these laws
(which relate to the Comptroller General's authority) will not be
applicable when the subcontractor is not required to submit cost or
pricing data. When cost or pricing data is required, the clause at
52.215-2 will appear in both the prime and subcontract and authority to
examine records of subcontractors will apply.
B. Corrections
1.At 60 FR 15221; March 22, 1995, in the third column section
12.403 is correctly revised to read as follows:
12.403 Applicability of certain laws to subcontracts for the
acquisition of commercial items.
(a) The following laws are not applicable to subcontracts under
either a contract for the acquisition of commercial items or a
subcontract for the acquisition of commercial items:
(1) 15 U.S.C. 644(d), Requirements relative to labor surplus areas
under the Small Business Act (see 48 CFR (FAR) part 19, subpart 19.2);
(2) 41 U.S.C. 43, Walsh-Healey Act (see 48 CFR (FAR) part 22,
subpart 22.6);
(3) 41 U.S.C. 253d, Validation of Proprietary Data Restrictions
(see 48 CFR (FAR) part 27, subpart 27.4);
(4) 41 U.S.C. 254(a) and 10 U.S.C. 2306(b), Contingent Fees (see 48
CFR (FAR) part 3, subpart 3.4);
(5) 41 U.S.C. 254d(c) and 10 U.S.C. 2313(c), Examination of Records
of Contractor, when a subcontractor is not required to provide cost or
pricing data (see (FAR) part 15, subpart 15.1);
(6) 41 U.S.C. 416(a)(6), Minimum Response Time for Offers under
Office of Federal Procurement Policy Act (see 48 CFR (FAR) part 5,
subpart 5.2);
(7) 41 U.S.C. 418a, Rights in Technical Data (see 48 CFR (FAR) part
27, subpart 27.4);
(8) 41 U.S.C. 701 et seq., Drug-Free Workplace Act of 1988 (see 48
CFR (FAR) 23.5);
(9) 46 U.S.C. 1241(b), Transportation in American Vessels of
Government Personnel and Certain Cargo (see 48 CFR (FAR) part 47,
subpart 47.5);
(10) 49 U.S.C. 40118, Fly American provisions (see 48 CFR (FAR)
part 47, subpart 47.4);
(11) Pub. L. 90-469, William Langer Jewel Bearing Plant Special Act
(see 48 CFR (FAR) part 8, subpart 8.2); [[Page 17185]]
(12) 10 U.S.C. 2301, note, as amended by Section 2091, Pub. L. 103-
355, Payment Protections for Subcontractors and Suppliers (see 48 CFR
(FAR) parts 28 and 32, subparts 28.1 and 32.1);
(13) 10 U.S.C. 2241, note (Pub. L. 102-396, Section 9005, as
amended by Pub. L. 103-139, Section 8005), Limitations on Procurement
of Food, Clothing, and Specialty Metals Not Produced in the United
States (See 48 CFR (DFARS) part 225, subpart 225.70);
(14) 10 U.S.C. 2320, Rights in Technical Data (see 48 CFR (DFARS)
part 227, subpart 227.4);
(15) 10 U.S.C. 2321, Validation of Proprietary Data Restrictions.
(see 48 CFR (DFARS) part 227, subpart 227.4);
(16) 10 U.S.C. 2327, note (Pub. L. 103-160, Section 843), Reporting
Requirement Regarding Dealings with Terrorist Countries (see 48 CFR
(DFARS) part 209, subpart 209.1);
(17) 10 U.S.C. 2391, note (Pub. L. 101-510, Section 4201(a)(1)(B)),
Notification of Substantial Impact on Employment (see 48 CFR (DFARS)
part 249, subpart 249.70);
(18) 10 U.S.C. 2393, Prohibition Against Doing Business with
Certain Offerors or Contractors (see 48 CFR (DFARS) part 209, subpart
209.4);
(19) 10 U.S.C. 2501, note (Pub. L. 103-160, Section 1372),
Notification of Proposed Program Termination (see 48 CFR (DFARS) part
249, subpart 249.70);
(20) 10 U.S.C. 2534, Miscellaneous Limitations on the Procurement
of Goods other than United States Goods (see 48 CFR (DFARS) part 225,
subparts 225.7004, 225.7007, 225.7010, and 225.7016);
(21) 10 U.S.C. 2631, Cargo Preference Act (see 48 CFR (DFARS)
247.5); and
(22) National Defense Authorization Acts, Appropriations Acts, and
Other Statutory Restrictions on Foreign Purchases as follows: Pub. L.
100-202, Section 8088, Polyacrylonitrile Based Carbon Fiber; Pub. L.
101-511, Section 8041, Anchor and Mooring Chain; Pub. L. 102-172,
Section 8111, Carbon, Alloy and Armor Steel Plates; Pub. L. 102-396,
Section 9108, Four Ton Dolly Jacks; Pub. L. 102-484, Section 832, Anti
friction Bearings; Pub. L. 103-139, Section 8090, Aircraft Fuel Cells;
Pub. L. 103-139, Section 8124, Totally Enclosed Lifeboat Survival
Systems; Pub. L. 103-335, Section 8023, Supercomputers; Pub. L. 103-
335, Section 8050, Multibeam Sonar Mapping Systems; Pub. L. 103-335,
Section 8115, Ship Propellers; and Pub. L. 103-335, Section 8120, 120
mm Mortars and Ammunition.
(b) Certain requirements of the following laws have been eliminated
for subcontracts under either a contract for the acquisition of
commercial items or subcontract for the acquisition of commercial
items:
(1) 33 U.S.C. 1368, Requirement for a certificate and clause under
the Federal Water Pollution Control Act (see 48 CFR (FAR) part 23,
subpart 23.1);
(2) 40 U.S.C. 327 et seq., Requirement for a certificate and clause
under the Contract Work Hours and Safety Standards Act (see 48 CFR
(FAR) part 22, subpart 22.3);
(3) 41 U.S.C. 423e(1)(B), Requirement for certain certifications
under the Procurement Integrity Act (see 48 CFR (FAR) part 3, subpart
3.1); and
(4) 42 U.S.C. 7606, Requirements for a certificate and clause under
the Clean Air Act (see 48 CFR (FAR) part 23, subpart 23.1).
(c) The applicability of the following laws have been modified in
regards to subcontracts under either a contract for the acquisition of
commercial items or a subcontract for the acquisition of commercial
items:
(1) 41 U.S.C. 253g and 10 U.S.C. 2402, Prohibition on Limiting
Subcontractor Direct Sales to the United States (see 48 CFR (FAR) part
3, subpart 3.5);
(2) 41 U.S.C. 254(d) and 10 U.S.C. 2306a, Truth in Negotiations Act
(see 48 CFR (FAR) part 15, subpart 15.8); and
(3) 41 U.S.C. 422, Cost Accounting Standards (see 48 CFR (FAR) part
99).
(d) The FAR prescription, provision or clause for each of these
statutes has been revised in the appropriate part to reflect their
proper application to the acquisition of commercial items.
2. At 60 FR 15222; March 22, 1995, in the second column section
52.212-5 is correctly revised to read as follows:
52.212-5 Contract Terms and Conditions Required To Implement Statutes
or Executive Orders--Commercial Items.
As prescribed in 12.302(b)(4), insert the following clause:
Contract Terms and Conditions Required to Implement Statutes or
Executive Orders--Commercial Items (Date)
(a) The Contractor agrees to comply with the following FAR
clauses, which are incorporated in this contract by reference, to
implement provisions of law or executive orders applicable to
acquisitions of commercial items:
(1) 52.219-8, Utilization of Small Business Concerns and Small
Disadvantaged Business Concerns (15 U.S.C. 637 (d)(2) and (3));
(2) 52.222-3, Convict Labor (E.O. 11755); and
(3) 52.233-3, Protest After Award (31 U.S.C 3553 and 40 U.S.C.
759).
(b) The Contractor agrees to comply with the following FAR and
FIRMR clauses in this paragraph (b) that are indicated as being
incorporated in this contract by reference to implement provisions
of law or executive orders applicable to acquisitions of commercial
items or components:
______ (1) 52.203-6, Restrictions on Subcontractor Sales to the
Government, with Alternate I (41 U.S.C. 253g and 10 U.S.C. 2402).
______ (2) 52.203-10, Price or Fee Adjustment for Illegal or
Improper Activity (41 U.S.C. 423).
______ (3) 52.219-14, Limitation on Subcontracting (15 U.S.C.
637(a)(14)).
______ (4) 52.222-26, Equal Opportunity (E.O. 11246).
______ (5) 52.222-35, Affirmative Action for Special Disabled
and Vietnam Era Veterans (38 U.S.C. 2012).
______ (6) 52.222-36, Affirmative Action for Handicapped Workers
(29 U.S.C. 793).
______ (7) 52.222-37, Employment Reports on Special Disabled
Veterans and Veterans of the Vietnam Era (38 U.S.C. 2012).
______ (8) 52.225-3, Buy American Act--Supplies (41 U.S.C. 10).
______ (9) 52.225-9, Buy American Act--Trade Agreements Act--
Balance of Payments Program (41 U.S.C. 10, 19 U.S.C. 2501-2582).
______ (10) 52.225-17, Buy American Act--Supplies Under European
Community Sanctions for End Products (E.O. 12849).
______ (11) 52.225-18, European Community Sanctions for End
Products (E.O. 12849).
______ (12) 52.225-19, European Community Sanctions for Services
(E.O. 12849).
______ (13) 52.225-21, Buy American Act--North American Free
Trade Agreement Implementation Act--Balance of Payments Program (41
U.S.C 10, Pub. L. 103-187).
______ (14) 52.247-64, Preference for Privately Owned US Flagged
Commercial Vessels (46 U.S.C. 1241).
______ (15) 201-39.5202-3, Procurement Authority (FIRMR). (This
acquisition is being conducted under ______ delegation of GSA's
exclusive procurement authority for FIP resources. The specific GSA
DPA case number is ______).
(c) The Contractor agrees to comply with the following FAR
clauses in this paragraph (c), applicable to commercial services,
that are indicated as being incorporated in this contract by
reference to implement provisions of law or executive orders
applicable to acquisitions of commercial items or components:
______ (1) 52.222-41, Service Contract Act of 1965, As amended
(41 U.S.C. 351, et seq.).
______ (2) 52.222-42, Statement of Equivalent Rates for Federal
Hires (29 U.S.C. 206 and 41 U.S.C. 351, et seq.).
______ (3) 52.222-43, Fair Labor Standards Act and Service
Contract Act--Price Adjustment (Multiple Year and Option Contracts)
(29 U.S.C. 206 and 41 U.S.C. 351 et seq.).
______ (4) 52.222-44, Fair Labor Standards Act and Service
Contract Act--Price Adjustment (29 U.S.C. 206 and 41 U.S.C. 351 et
seq.).
______ (5) 52.222-47, SCA Minimum Wages and Fringe Benefits
Applicable to Successor Contract Pursuant to Predecessor Contractor
Collective Bargaining Agreement (CBA) (41 U.S.C. 351 et seq.).
(d) Comptroller General Examination of Record. The Contractor
agrees to comply [[Page 17186]] with the provisions of this
paragraph (d) if this contract was awarded using other than sealed
bid, is in excess of the simplified acquisition threshold, and does
not contain the clause at 52.215-2, Audit and Records--Negotiation:
(1) The Comptroller General of the United States, or an
authorized representative of the Comptroller General, shall have
access to and right to examine any of the Contractor's directly
pertinent records involving transactions related to this contract.
(2) The Contractor shall make available at its offices at all
reasonable times the records, materials, and other evidence for
examination, audit, or reproduction, until 3 years after final
payment under this contract or for any shorter period specified in
Subpart 4.7, Contractor Records Retention, of the Federal
Acquisition Regulation, or for any longer period required by statute
or by other clauses of this contract. If this contract is completely
or partially terminated, the records relating to the work terminated
shall be made available for 3 years after any resulting final
termination settlement. Records relating to appeals under the
disputes clause or to litigation or the settlement of claims arising
under or relating to this contract shall be made available until
such appeals, litigation, or claims are finally resolved.
(3) As used in this clause, records include books, documents,
accounting procedures and practices, and other data, regardless of
type and regardless of form. This does not require the Contractor to
create or maintain any record that the Contractor does not maintain
in the ordinary course of business or pursuant to a provision of
law.
(e) Notwithstanding the requirements of the clauses in
paragraphs (a), (b), (c) or (d) of this clause, the Contractor is
not required to include any FAR clause, other than those listed
below, in a subcontract for commercial items or commercial
components--
(1) 52.222-26, Equal Opportunity (E.O. 11246);
(2) 52.222-35, Affirmative Action for Special Disabled and
Vietnam Era Veterans (38 U.S.C. 2012(a)); and
(3) 52.222-36, Affirmative Action for Handicapped Workers (29
U.S.C. 793).
(End of clause)
Dated: March 29, 1995.
Edward C. Loeb,
Deputy Project Manager for Implementation of the Federal Acquisition
Streamlining Act of 1994.
[FR Doc. 95-8145 Filed 4-3-95; 8:45 am]
BILLING CODE 6820-34-P
