Federal Acquisition Regulation; Service Contract Funding

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DEPARTMENT OF DEFENSE

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 32 and 37

[FAC 90-30; FAR Case 94-766; Item V]

RIN 9000-AG56

Federal Acquisition Regulation; Service Contract Funding

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: This final rule is issued pursuant to the Federal Acquisition

Streamlining Act of 1994 (the Act) to implement a new authority for

funding of service contracts of certain executive branch agencies. This

regulatory action was subject to Office of Management and Budget review

under Executive Order 12866, dated September 30, 1993.

EFFECTIVE DATE: August 21, 1995.

FOR FURTHER INFORMATION CONTACT:

Mr. John Galbraith, Finance and Payment Team Leader, at (703) 697-6710,

in reference to this FAR case. For general information, contact the FAR

Secretariat, room 4037, GS Building, Washington, DC 20405 (202) 501-

4755. Please cite FAC 90-30, FAR case 94-766.

SUPPLEMENTARY INFORMATION:

A. Background

The Federal Acquisition Streamlining Act of 1994 (the Act), Pub. L.

103-355, provides authorities that streamline the acquisition process

and minimize burdensome Government-unique requirements. Major changes

in the acquisition process as a result of the Act's implementation

include changes in the areas of Commercial Item Acquisition, Simplified

Acquisition Procedures, the Truth in Negotiations Act, and introduction

of the Federal Acquisition Computer Network (FACNET).

Section 1073 of the Federal Acquisition Streamlining Act of 1994

(Public Law 103-355) provided new authority for executive branch

agencies other than the Department of Defense, United States Coast

Guard, and National Aeronautics and Space Administration to write

service contracts that cross fiscal years, and to fund those contracts

with one fiscal year's funds. Consult agency supplements for similar

authorities that may exist for the Department of Defense, United States

Coast Guard, and the National Aeronautics and Space Administration.

This new authority will allow most agencies to simplify the contracting

for, and administration of, service contracts by allowing single, fully

funded contract actions, in lieu of multiple contracts or complex

obligation arrangements. This new authority significantly simplifies

and streamlines the contracting process in this area. To implement this

authority, the FAR Council is amending FAR sections 32.703-3 and

37.106.

B. Regulatory Flexibility Act

The final rule does not constitute a significant FAR revision

within the meaning of FAR 1.501 and Pub. L. 98-577 and public comment

is not required. Therefore, the Regulatory Flexibility Act does not

apply. However, comments from small entities concerning the affected

subpart will be considered in accordance with 5 U.S.C. 610. Such

comments must be submitted separately and cite 5 U.S.C. 601, et seq.

(FAC 90-30, FAR case 94-766), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 32 and 37

Government procurement.

Dated: July 17, 1995.

Capt. Barry L. Cohen, SC, USN,

Project Manager for the Implementation of the Federal Acquisition

Streamlining Act of 1994.

Therefore, 48 CFR Parts 32 and 37 are amended as set forth below:

PART 32--CONTRACT FINANCING

1. The authority citation for 48 CFR Parts 32 and 37 continues to

read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

2. Section 32.703-3 is revised to read as follows:

32.703-3 Contracts crossing fiscal years.

(a) A contract that is funded by annual appropriations may not

cross fiscal years, except in accordance with statutory authorization

(see 41 U.S.C. 11a, 31 U.S.C. 1308, 42 U.S.C. 2459a and 41 U.S.C. 253l

(see paragraph (b) of this section)), or when the contract calls for an

end product that cannot feasibly be subdivided for separate performance

in each fiscal year (e.g., contracts for expert or consultant

services).

(b) 41 U.S.C. 253l, as amended by Section 1073 of the Federal

Acquisition Streamlining Act of 1994 (Pub. L. 103-355), authorizes

heads of executive agencies other than the Department of Defense,

United States Coast Guard, and the National Aeronautics and Space

Administration (41 U.S.C. 252(a)(1)), to enter into a basic contract,

options, or orders under that contract for procurement of severable

services for a period that begins in one fiscal year and ends in the

next fiscal year if the period of the basic contract, options or orders

under that contract does not exceed one year each. Funds made available

for a fiscal year may be obligated for the total amount of an action

entered into under this authority (see 37.106(b)). Consult agency

supplements for similar authorities that may exist for the Department

of Defense, United States Coast Guard, or the National Aeronautics and

Space Administration.

PART 37--SERVICE CONTRACTING

3. Section 37.106 is revised to read as follows:

37.106 Funding and term of service contracts.

(a) When contracts for services are funded by annual

appropriations, the term of contracts so funded shall not extend beyond

the end of the fiscal year of the appropriation except when authorized

by law (see paragraph (b) of this section for certain service

contracts, 32.703-2 for contracts conditioned upon availability of

funds, and 32.703-3 for contracts crossing fiscal years).

(b) 41 U.S.C. 253l, as amended by Section 1073 of the Federal

Acquisition Streamlining Act of 1994 (Pub. L. 103-355), authorizes the

head of any executive agency except the Department of Defense, United

States Coast Guard, and the National Aeronautics and Space

Administration (41 U.S.C. 252(a)(1)), to enter into a basic contract,

options, or orders under that contract for procurement of severable

services for a period that begins in one fiscal year and ends in the

next fiscal year if the period of the basic contract, options or orders

under that contract does not exceed one year each. Funds made available

for a fiscal year may be obligated for the total amount of an action

entered into under this authority (see 32.703-3(b)). Consult agency

supplements for similar authorities that may exist for the Department

of Defense, United States

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Coast Guard, or the National Aeronautics and Space Administration.

[FR Doc. 95-17938 Filed 7-20-95; 8:45 am]

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