Federal Acquisition Circular 90-39 Introduction

SUMMARY: This document summarizes the Federal Acquisition Regulation

(FAR) rules which follow it in the order listed below. The Civilian

Agency Acquisition Council and the Defense Acquisition Regulations

Council are issuing Federal Acquisition Circular (FAC) 90-39 to amend

the FAR.

DATES: For effective dates and comment dates, see separate documents

which follow. Please cite FAC 90-39 and the appropriate FAR case

number(s) in all correspondence related to the following documents.

FOR FURTHER INFORMATION CONTACT: The analyst whose name appears (in the

table below) in relation to each FAR case or subject area. For general

information, contact the FAR Secretariat, Room 4037, GS Building,

Washington, DC 20405, (202) 501-4755. Please cite FAC 90-39 and

specific FAR case number(s).

SUPPLEMENTARY INFORMATION: Federal Acquisition Circular 90-39 amends

the Federal Acquisition Regulation (FAR) as specified below:

------------------------------------------------------------------------

Item- Subject- FAR case- Analyst

------------------------------------------------------------------------

I-......... Double-Sided Copying-.. 92-050- De Stefano. -

II-........ National Industrial 95-004- O'Neill. -

Security Program

Operating Manual

(NISPOM) -.

III-....... Justification and 96-302- De Stefano. -

Approval Thresholds-.

IV-........ Implementation of 93-606- O'Such. -

Memorandum of

Understanding Between

the United States of

America and the

European Economic

Community on

Government Procurement

and Sanctions Imposed

on the European

Community -.

V-......... Postponement of Bid 91-095- De Stefano.

Openings or Closing

Dates.

VI-........ Armed Services Pricing 95-027- Olson. -

Manual-.

VII-....... Predetermined Indirect 94-011- De Stefano. -

Cost Rates-.

VIII-...... Small Business Size 94-600- Klein. -

Standards-.

IX-........ Master Subcontracting 92-039- Klein. -

Plans-.

X-......... Small Business 92-302- Klein. -

Competitiveness

Demonstration Program -

.

XI-........ Use of Convict Labor-.. 93-615- O'Neill.

XII-....... Ozone Executive Order-. 93-307- De Stefano.

XIII-...... Uruguay Round (1996 95-304- O'Such. -

Code) -.

XIV-....... Implementation of the 93-310- O'Such. -

North American Free

Trade Agreement

Implementation Act -.

XV-........ Caribbean Basin 95-030- O'Such. -

Countries -.

XVI-....... Fluctuating Exchange 92-048- O'Such. -

Rates-.

XVII-...... Irrevocable Letters of 95-301- O'Neill. -

Credit and

Alternatives to Miller

Act Bonds-.

XVIII-..... Part 31 Agency 94-606- Olson. -

Supplements -.

XIX-....... Records Retention-..... 93-020- Olson.

XX-........ Legislative Lobbying 93-006- Olson. -

Costs -.

XXI-....... Travel Costs-.......... 93-022- Olson

XXII-...... Prompt Payment Overseas 92-046- Olson. -

-.

XXIII-..... Alternate Dispute 91-062/92-301- O'Neill. --

Resolution/Federal

Courts Administration

Act -.

XXIV-...... Defense Production Act 93-304- O'Neill. -

Amendments-.

XXV-....... Child Care Services-... 91-106- Klein.

XXVI-...... Quick-Closeout 95-009- Klein. -

Procedures-.

XXVII-..... Quality Assurance 92-031- Klein. -

Actions--Electronic -

Screening-.

XXVIII-.... Quality Assurance 92-027- Klein. -

Nonconformances -.

XXIX-...... Solicitation 95-603- O'Neill.

Provisions--Contract

Clauses-.

XXX-....... Contract Award--Sealed 91-031- O'Neill. -

Bidding--Construction -

.

XXXI-...... Small Business 93-305- O'Neill. -

Innovation Research

Rights in Data -.

XXXII-..... Inspection Clauses-- 92-001- Klein -

Fixed Price.

XXXIII-.... Termination for 91-102- Klein. -

Convenience -.

N/A-....... Corrections and

Technical Amendments

(1) Revision to FAR 92-617- O'Such. -

Utility Matrix (Loose-

leaf edition only) -.

(2) Table of Standard N/A- N/A.

Forms and OMB

Expiration Dates -.

------------------------------------------------------------------------

-Item I--Double-Sided Copying (FAR Case 92-050)

The interim rule published as Item I of FAC 90-27, and amended by

Item III of FAC 90-29, is revised and finalized. The interim rule added

FAR Subpart 4.3 and a clause at 52.204-4 to encourage offerors and

contractors to maximize the use of double-sided copying on recycled

paper, in accordance with Executive Order 12873. FAC 90-29 amended FAR

4.304 to eliminate the requirement for use of the clause at 52.204-4 in

acquisitions at or below the simplified acquisition threshold. The

final rule contains additional changes at 4.301 and 52.204-4 to

implement Executive Order 12995, which amended Executive Order 12873 to

revise the minimum recycled content standards for printing and writing

paper.

[[Page 31613]]

Item II--National Industrial Security Program Operating Manual

(NISPOM) (FAR Case 95-004)

This final rule amends FAR Subparts 4.4 and 27.2 and the clause at

52.204-2 to (1) replace references to the ``Defense Industrial Security

Program'' with references to the ``National Industrial Security

Program''; and (2) replace references to the ``DoD Industrial Security

Manual for Safeguarding Classified Information'' with references to the

``National Industrial Security Program Operating Manual.'' The National

Industrial Security Program has been established in accordance with

Executive Order 12829.

Item III--Justification and Approval Thresholds (FAR Case 96-302)

This final rule amends FAR 6.304 to implement Section 4102 of the

Fiscal Year 1996 Defense Authorization Act (Public Law 104-106).

Section 4102 amends 10 U.S.C. 2304(f)(1)(B) and 41 U.S.C. 253(f)(1)(B)

to raise the dollar thresholds at which approval for the use of other

than full and open competition must be obtained from the competition

advocate, the head of the procuring activity, or the senior procurement

executive. Section 4102 provides for approval of the justification for

other than full and open competition by (1) the competition advocate,

for proposed contracts over $500,000, but not exceeding $10,000,000;

(2) the head of the procuring activity, or designee, for proposed

contracts over $10,000,000, but not exceeding $50,000,000; and (3) the

senior procurement executive, for proposed contracts over $50,000,000.

Item IV--Implementation of Memorandum of Understanding Between the

United States of America and the European Economic Community on

Government Procurement and Sanctions Imposed on the European Community

(FAR Case 93-606)

The interim rule published in FAC 90-18, and amended in FACs 90-19

and 90-36, is converted to a final rule without change. The rule

amended FAR Parts 14, 15, 17, 25, and 52 to (1) implement Executive

Order 12849 which, based on a Memorandum of Understanding between the

United States and the European Community, waives the Buy American Act

in certain situations; and (2) implement certain trade sanctions

imposed on the European Community.

Item V--Postponement of Bid Openings or Closing Dates (FAR Case 91-

095)

This final rule amends FAR 14.402-3, and 15.412 and the provisions

at 52.214-7, 52.214-23, 52.214-32, 52.214-33, 52.215-10, and 52.215-36

to clarify policy regarding rescheduling of the time for receipt of

bids or proposals when an emergency or unanticipated event interrupts

normal processes at a Government installation. An editorial revision is

made at 15.411(a).

Item VI--Armed Services Pricing Manual (FAR Case 95-027)

This final rule amends FAR 15.805-1 to replace the Armed Services

Pricing Manual, as the reference guide for pricing and negotiation

personnel, with five desk references jointly prepared by the Air Force

Institute of Technology and the Federal Acquisition Institute.

Item VII--Predetermined Indirect Cost Rates (FAR Case 94-011)

This final rule amends FAR 42.705-3 and the clause at 52.216-15 to

implement revisions to OMB Circular A-21 that permit predetermined

indirect cost rates for educational institutions to be established for

periods of up to four years. An editorial revision is made at

16.307(i).

Item VIII--Small Business Size Standards (FAR Case 94-600)

This final rule revises the table at FAR 19.102 to reflect size

standards published by the Small Business Administration.

Item IX--Master Subcontracting Plans (FAR Case 92-039)

This final rule amends FAR 19.704 and the clause at 52.219-9 to

permit master subcontracting plans to be written for a three-year

period, and to emphasize that it is incumbent upon contractors to

maintain and update master plans.

Item X--Small Business Competitiveness Demonstration Program (FAR

Case 92-302)

The interim rule published as Item XIII of FAC 90-23 is converted

to a final rule without change. The rule amended FAR Subpart 19.10 to

(1) extend the Small Business Competitiveness Demonstration Program

through September 30, 1996; (2) specify that agencies may reinstate the

use of small business set-asides as necessary to meet assigned goals,

but only within the organizational unit(s) that failed to meet the

small business goals; and (3) revise the description of architectural

and engineering services as a designated industry group.

Item XI--Use of Convict Labor (FAR Case 93-615)

This final rule amends FAR Subpart 22.2 and the clause at 52.222-3

to reflect changes in the statutory restrictions on employment of

convict labor in the performance of Government contracts. The

amendments (1) remove all references to 18 U.S.C. 4082(c)(2), which now

only applies to offenses committed prior to November 1, 1987; (2)

reflect the addition of the Commonwealth of the Northern Mariana

Islands to the jurisdictions covered by Executive Order 11755; and (3)

include further information regarding the requirements of Executive

Order 11755, as amended by Executive Order 12608.

Item XII--Ozone Executive Order (FAR Case 93-307)

The interim rule published as Item III of FAC 90-27 is revised and

finalized. The rule implements Executive Order 12843 and Environmental

Protection Agency Clean Air Act regulations (40 CFR Part 82). The final

rule differs from the interim rule in that it (1) amends FAR Subpart

23.8 and the clause at 52.223-11 to replace the definitions of ``class

I substance'' and ``class II substance'' with a definition of ``ozone-

depleting substance''; and (2) amends the clause at 52.223-11 to

clarify that labeling of ozone-depleting substances shall be in

accordance with 42 U.S.C. 7671j and 40 CFR Part 82.

Item XIII--Uruguay Round (1996 Code) (FAR Case 95-304)

The interim rule published in FAC 90-36 is converted to a final

rule without further change. The rule amends FAR Parts 25 and 52 to

implement the renegotiated Government Procurement Agreement (1996 Code)

(Uruguay Round). This agreement is implemented in statute by the

Uruguay Round Agreement Act, Public Law 103-465, which amends the Trade

Agreements Act of 1979 (19 U.S.C. 2501-2582).

Item XIV--Implementation of the North American Free Trade Agreement

Implementation Act (FAR Case 93-310)

This interim rule amends the rule published in FAC 90-19 to

implement the North American Free Trade Agreement (NAFTA)

Implementation Act. This interim rule (1) adds language at FAR

25.402(g) to address the applicability of NAFTA to the acquisition of

services; (2) adds language at 27.208 to address the use of patented

technology when the patent holder is from a NAFTA country; (3) amends

the provision at 52.225- 20 to clarify procedures for evaluation of

[[Page 31614]]

offers; (4) adds an alternate to the provision at 52.225-20 and the

clause at 52.225-21 for use in acquisitions between $25,000 and

$50,000; and (5) adds a new clause at 52.225-22 for use in construction

contracts awarded outside the United States with an estimated value of

$6,500,000 or more.

Item XV--Caribbean Basin Countries (FAR Case 95-030)

This final rule amends FAR 25.402(b) to reflect the U.S. Trade

Representative's extension, through September 30, 1996, of the

designation of Caribbean Basin products as eligible products under the

Trade Agreements Act.

Item XVI--Fluctuating Exchange Rates (FAR Case 92-048)

This final rule revises FAR 25.501 and adds a new provision at

52.225-4 to address procedures for evaluation of offers priced in a

foreign currency.

Item XVII--Irrevocable Letters of Credit and Alternatives to Miller Act

Bonds (FAR Case 95-301)

This interim rule amends FAR Part 28 and the clause at 52.228-2,

and adds new clauses at 52.228-13 and 52.228-14 to (1) provide for use

of irrevocable letters of credit as an alternative to corporate or

individual sureties as security for Miller Act bonds on construction

contracts exceeding $100,000; and (2) provide alternative payment

protections for construction contracts between $25,000 and $100,000,

which are no longer subject to the Miller Act, in accordance with

Section 4104(b) of the Federal Acquisition Streamlining Act of 1994

(Public Law 103-355).

Item XVIII--Part 31 Agency Supplements (FAR Case 94-606)

This final rule amends FAR 31.101 to remove the requirement for

Civilian Agency Acquisition Council approval of agency supplements to

FAR Part 31. Approval requirements for class deviations from Part 31

remain unchanged.

Item XIX--Records Retention (FAR Case 93-020)

This final rule amends the cost principle at 31.201-2 to explicitly

state that contractors must maintain adequate cost records in order to

be reimbursed for costs claimed.

Item XX--Legislative Lobbying Costs (FAR Case 93-006)

This final rule amends FAR 31.205-22, and deletes 31.205-50, to

clarify the cost principle pertaining to legislative lobbying costs.

Item XXI--Travel Costs (FAR Case 93-022)

This final rule amends the cost principle at FAR 31.205- 46 to

specify the documentation required to support travel costs incurred by

contractors under Government contracts. These documentation

requirements are consistent with similar requirements already imposed

by Section 274 of the Internal Revenue Code for travel costs claimed

for Federal tax purposes.

Item XXII--Prompt Payment Overseas (FAR Case 92-046)

The interim rule published as Item XIII of FAC 90-20, and further

amended by Item III of FAC 90-29, is converted to a final rule without

change. The rule amended FAR 32.901 and the clauses at 52.232-25,

52.232-26, and 52.232-27 to reflect the applicability of the Prompt

Payment Act to contracts awarded and performed outside the United

States.

Item XXIII--Alternate Dispute Resolution/Federal Courts Administration

Act (FAR Cases 91-062 and 92-301)

The interim rules are converted to final rules without change. The

rules were published as Item XIV of FAC 90-20 and Item III of FAC 90-

10. The rules amend the claim certification procedures and the

Alternative Means of Dispute Resolution (ADR) procedures in FAR Part

33, and implement section 907(a) of the Federal Courts Administration

Act of 1992 (Public Law 102-572).

Item XXIV--Defense Production Act Amendments (FAR Case 93-304)

The interim rule published as Item XXIV of FAC 90-23 is converted

to a final rule without change. The rule added FAR Subpart 34.1 and a

clause at 52.234-1 to provide policy and procedures for the testing,

qualification, and use of industrial resources manufactured or

developed with assistance provided under Title III of the Defense

Production Act of 1950.

Item XXV--Child Care Services (FAR Case 91-106)

The interim rule published as Item XXVII of FAC 90-23 is converted

to a final rule without change. The rule amended FAR Subpart 37.1 to

require contracting officers to ensure that contracts for child care

services include requirements for criminal history background checks of

employees in accordance with 42 U.S.C. 13041.

Item XXVI--Quick-Closeout Procedures (FAR Case 95-009)

This final rule amends FAR 42.708 and the clauses at 52.216-7 and

52.216-13 to permit maximum use of quick contract closeout procedures.

The rule (1) permits use of quick closeout procedures if total

unsettled indirect costs allocable to any one contract do not exceed

$1,000,000; (2) and permits contracting officers to waive the 15

percent restriction on unsettled indirect costs, based upon a risk

assessment that considers certain factors.

Item XXVII--Quality Assurance Actions--Electronic Screening (FAR Case

92-031)

This final rule amends FAR 46.101 to add definitions of ``latent

defect'' and ``patent defect.''

Item XXVIII--Quality Assurance Nonconformances (FAR Case 92-027)

This final rule amends FAR Subpart 46.1 to provide standard

terminology and guidance pertaining to supplies and services that do

not meet contract requirements.

Item XXIX--Solicitation Provisions--Contract Clauses (FAR Case 95-603)

This final rule amends the provision at FAR 52.211-1 to delete the

statement that copies of specifications may be obtained from General

Services Administration Business Service Centers. Specifications are no

longer available from these centers.

Item XXX--Contract Award--Sealed Bidding--Construction (FAR Case 91-

031)

This final rule amends the provision at FAR 52.214-19 to advise

offerors that, for construction solicitations, the Government may

reject bids as nonresponsive if the prices are materially unbalanced.

This amendment is consistent with the existing language in the

provisions at 52.214-10 and 52.215- 16, which are used in solicitations

for other than construction.

Item XXXI--Small Business Innovation Research Rights in Data (FAR Case

93-305)

The interim rule published as Item XIX of FAC 90-20 is converted to

a final rule without change. The rule amended the clause at FAR 52.227-

20 to increase a small business concern's data rights retention period

from two to four years, in accordance with the Small Business

Innovation Research Program Policy Directive published by the Small

Business Administration.

[[Page 31615]]

Item XXXII--Inspection Clauses--Fixed Price (FAR Case 92-001)

This final rule amends the clauses at FAR 52.246-2, 52.246-4,

52.246-7, 52.246-12, and 52.246-13 to replace the phrase ``without

additional charge'' with the phrase ``at no increase in contract

price'' for clarity.

Item XXXIII--Termination for Convenience (FAR Case 91-102)

This final rule amends the clause at 52.249-2 to clarify language

pertaining to settlement of contract termination costs and rights of

appeal under the Disputes clause.

Corrections and Technical Amendments (Loose-leaf edition only)

Revisions to FAR Utility Matrix (FAR Case 92-617)

Section 52.301, Solicitation provisions and contract clauses

(Matrix), is amended in the Utility Services column. The matrix is not

carried in the Code of Federal Regulations and, therefore, not

published in the Federal Register. Subscribers to the loose-leaf

edition will receive matrix changes in FAC 90-39.

Table of Standard Forms and OMB Expiration Dates

Under the provisions of the Paperwork Reduction Act of 1995 (44

U.S.C. Chapter 35), the Federal Acquisition Regulation (FAR)

Secretariat has obtained Office of Management and Budget (OMB)

clearance of all information collection requirements contained in the

FAR. In lieu of reissuing Standard and Optional Forms to reflect

extended OMB approval dates, and to reduce costs of reprinting forms,

FAR users should make appropriate pen-and-ink changes on any listed

forms containing expiration dates that differ from the entries

published below:

Table of Standard Forms and OMB Expiration Dates

------------------------------------------------------------------------

OMB

Standard form Edition control Expiration

No. date

------------------------------------------------------------------------

SF 24.............. Rev. 1/90.................. 9000-0045 9/30/98

SF 25.............. Rev. 1/90.................. 9000-0045 9/30/98

SF 25A............. Rev. 1/90.................. 9000-0045 9/30/98

SF 25B............. Rev. 10/83................. 9000-0045 9/30/98

SF 28.............. Rev. 1/90.................. 9000-0001 9/30/98

SF 34.............. Rev. 1/90.................. 9000-0045 9/30/98

SF 35.............. Rev. 1/90.................. 9000-0045 9/30/98

SF 119............. Rev. 1/90.................. 9000-0003 9/30/98

SF 129............. Rev. 6/90.................. 9000-0002 10/31/97

SF 254............. Rev. 11/92................. 9000-0004 3/31/99

SF 255............. Rev. 11/92................. 9000-0005 4/30/99

SF 273............. Rev. 8/90.................. 9000-0045 9/30/98

SF 274............. Rev. 8/90.................. 9000-0045 9/30/98

SF 275............. Rev. 8/90.................. 9000-0045 9/30/98

SF 294............. Rev. 10/95................. 9000-0006 3/31/98

SF 295............. Rev. 10/95................. 9000-0007 3/31/98

SF 1403............ Rev. 9/88.................. 9000-0011 10/31/97

SF 1404............ Rev. 9/88.................. 9000-0011 10/31/97

SF 1405............ Rev. 9/88.................. 9000-0011 10/31/97

SF 1406............ Rev. 9/88.................. 9000-0011 10/31/97

SF 1407............ Rev. 9/88.................. 9000-0011 10/31/97

SF 1408............ Rev. 9/88.................. 9000-0011 10/31/97

SF 1411............ Rev. 10/95................. 9000-0013 9/30/98

SF 1413............ Rev. 6/89.................. 9000-0014 4/30/98

SF 1416............ Rev. 1/90.................. 9000-0045 9/30/98

SF 1417............ Rev. 8/90.................. 9000-0037 9/30/98

SF 1423............ Rev. 12/88................. 9000-0015 5/31/98

SF 1424............ Rev. 7/89.................. 9000-0015 5/31/98

SF 1426............ Rev. 7/89.................. 9000-0015 5/31/98

SF 1427............ Rev. 7/89.................. 9000-0015 5/31/98

SF 1428............ Rev. 7/89.................. 9000-0015 5/31/98

SF 1429............ Rev. 7/89.................. 9000-0015 5/31/98

SF 1430............ Rev. 7/89.................. 9000-0015 5/31/98

SF 1431............ Rev. 7/89.................. 9000-0015 5/31/98

SF 1432............ Rev. 7/89.................. 9000-0015 5/31/98

SF 1433............ Rev. 7/89.................. 9000-0015 5/31/98

SF 1434............ Rev. 7/89.................. 9000-0015 5/31/98

SF 1435............ Rev. 7/89.................. 9000-0012 5/31/98

SF 1436............ Rev. 7/89.................. 9000-0012 5/31/98

SF 1437............ Rev. 7/89.................. 9000-0012 5/31/98

SF 1438............ Rev. 7/89.................. 9000-0012 5/31/98

SF 1439............ Rev. 7/89.................. 9000-0012 5/31/98

SF 1440............ Rev. 7/89.................. 9000-0012 5/31/98

SF 1443............ Rev. 10/82................. 9000-0010 8/31/96

SF 1444............ Rev. 10/87................. 9000-0089 4/30/99

SF 1445............ Rev. 10/87................. 9000-0089 4/30/99

SF 1446............ Rev. 10/87................. 9000-0089 4/30/99

SF 1448............ 10/95 edition.............. 9000-0013 9/30/98

SF 1449............ 10/95 edition.............. 9000-0136 9/30/98

------------------------------------------------------------------------

[[Page 31616]]

Dated: June 4, 1996.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Federal Acquisition Circular Number 90-39

Federal Acquisition Circular (FAC) 90-39 is issued under the

authority of the Secretary of Defense, the Administrator of General

Services, and the Administrator for the National Aeronautics and Space

Administration.

Unless otherwise specified, all Federal Acquisition Regulation

(FAR) and other directive material contained in FAC 90-39 is effective

August 19, 1996, except for Item XV which was effective September 30,

1995, and Items I, IV, VI, VIII, X, XII through XIV, XVII, XXII through

XXV, and XXXI, which are effective June 20, 1996.

Dated: May 16, 1996.

Eleanor R. Spector,

Director, Defense Procurement.

Dated: May 16, 1996.

Ida M. Ustad,

Deputy Associate Administrator for Acquisition Policy, General Services

Administration.

Dated: May 6, 1996.

L.W. Bailets,

Acting Associate Administrator for Procurement National Aeronautics and

Space Administration.

[FR Doc. 96-14515 Filed 6-19-96; 8:45 am]

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