Federal Acquisition Circular 97-03; Introduction

SUMMARY: This document summarizes the Federal Acquisition Regulation

(FAR) rules issued by the Civilian Agency Acquisition Council and the

Defense Acquisition Regulations Council in this Federal Acquisition

Circular (FAC) 97-03. Each rule follows this document in the order

listed below. A companion document, the Small Entity Compliance Guide,

follows this FAC and may be located on the Internet at http://

www.arnet.gov/far.

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

which follow.

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 4035, GS Building,

Washington, DC 20405, 202) 501-4755. Please cite FAC 97-03 and specific

FAR case number(s).

SUPPLEMENTARY INFORMATION: Federal Acquisition Circular 97-03 amends

the Federal Acquisition Regulation (FAR) as specified below:

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Item Subject FAR case Analyst

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I................ Part 30 Deviations... 97-014 Nelson.

II............... Information 96-319 Nelson.

Technology

Management Reform

Act of 1996.

III.............. Final Overhead 95-017 Klein.

Settlement.

IV............... Reorganization of FAR 94-772 Linfield.

Part 13, Simplified

Acquisition

Procedures.

V................ Reporting Trade 97-021 Linfield.

Sanction Exemptions.

VI............... New Mexico Gross 97-018 Moss.

Receipts and

Compensating Tax.

VII.............. Compensation of 96-325 Nelson.

Certain Contractor

Personnel.

VIII............. Independent Research 95-032 Nelson.

and Development/Bid

and Proposal Costs

for Fiscal Year 1996

and Beyond.

IX............... Travel Reimbursement 97-007 Nelson.

(Interim).

X................ Protests to GAO...... 97-009 O'Neill.

XI............... Novation and Related 95-034 Klein.

Agreements.

XII.............. Commercial Bills of 97-017 Klein.

Lading, Small

Package Shipments.

XIII............. Standard Form 1406, 96-022 Klein.

Preaward Survey of

Prospective

Contractor--Quality

Assurance.

XIV.............. Technical Amendments.

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Item I--Part 30 Deviations (FAR Case 97-014)

This final rule amends FAR 1.402 to remove the prohibition against

authorizing deviations from FAR part 30, Cost Accounting Standards

Administration, except for subsections 30.201-3 and 30.201-4, or the

Cost Accounting Standards Board rules and regulations.

Item II--Information Technology Management Reform Act of 1996 (FAR Case

96-319)

The interim rule published as Item I of FAC 90-41 is converted to a

final rule. This rule implements the Information Technology Management

Reform Act of 1996 (Division E of Pub. L. 104-106). The final rule

differs from the interim rule in that it makes a clarifying revision to

paragraph (c) of the definition of ``information technology'' at FAR

2.101.

Item III--Final Overhead Settlement (FAR Case 95-017)

This final rule amends FAR parts 4, 42, and 52 to improve the

process of final settlement of contractor indirect cost rates under

cost-reimbursement contracts by (1) extending the time period within

which a contractor must submit an indirect cost rate proposal from 90

days to 6 months after the end of the contractor's fiscal year, (2)

permitting extensions to the 6-month time period for exceptional

circumstances only, and (3) providing a specific reference to the

Defense Contract Audit Agency pamphlet that contains guidance on what

generally constitutes an adequate final indirect cost rate proposal and

supporting data.

Item IV--Reorganization of FAR Part 13, Simplified Acquisition

Procedures (FAR Case 94-772)

This final rule revises FAR part 13 to reorganize its contents in a

more process-oriented manner and to emphasize the use of electronic

contracting and the Governmentwide commercial purchase card. FAR part

52 is amended to permit agency provisions and clauses to be

incorporated by reference in solicitations and contracts, if the full

text of the provisions and clauses may be accessed electronically by

prospective contractors. A new clause is added at FAR 52.213-4 for use

in simplified acquisitions; the clause is a compilation of the required

and most commonly used clauses that apply to simplified acquisitions,

and may be used in lieu of individual clauses prescribed in the FAR.

Item V--Reporting Trade Sanction Exemptions (FAR Case 97-021)

This final rule amends FAR Subpart 25.10 to eliminate requirements

for agencies to notify Congress when exercising the authority at FAR

25.1002(c) for exemption of certain procurements from trade sanctions

imposed by the President. The rule instead requires agencies to notify

the United States Trade Representative of such exemptions within 30

days after contract award.

Item VI--New Mexico Gross Receipts and Compensating Tax (FAR Case 97-

018)

This final rule amends FAR 29.401-6 to identify the Defense Special

Weapons Agency as an agency that has entered into an agreement with the

State of New Mexico regarding taxation.

Item VII--Compensation of Certain Contractor Personnel (FAR Case 96-

325)

The interim rule published as Item XI of FAC 90-45 is converted to

a final rule with a minor clarifying amendment at FAR 31.205-6(p)(1).

The rule implements Section 809 of the Fiscal

[[Page 64913]]

Year 1997 National Defense Authorization Act (Pub. L. 104-201). Section

809 places a Governmentwide ceiling of $250,000 per year on allowable

compensation costs for contractor personnel in senior management

positions under contracts awarded during fiscal year 1997.

Item VIII--Independent Research and Development/Bid and Proposal Costs

for Fiscal Year 1996 and Beyond (FAR Case 95-032)

This final rule amends the cost principle at FAR 31.205-18,

Independent Research and Development (IR&D) and Bid and Proposal (B&P)

Costs, and deletes FAR subpart 42.10, Negotiating Advance Agreements

for Independent Research and Development/Bid and Proposal Costs. The

rule removes, for fiscal year 1996 and beyond, the requirements to

calculate or negotiate a ceiling for IR&D/B&P costs. In addition, the

rule clarifies that costs incurred in preparing, submitting, and

supporting offers on potential cooperative arrangements are allowable

to the extent they are allocable, reasonable, and not otherwise

unallowable.

Item IX--Travel Reimbursement (FAR Case 97-007)

This interim rule amends FAR 31.205-46 to raise, from $25 to $75,

the maximum travel expense amount that contractor personnel may claim

without providing a supporting receipt. This change is consistent with

a recent amendment to the Federal Travel Regulation.

Item X--Protests to GAO (FAR Case 97-009)

This final rule amends the protest procedures at FAR 33.101 and

33.104 to conform with revisions made to the General Accounting Office

Bid Protest Regulations.

Item XI--Novation and Related Agreements (FAR Case 95-034)

This final rule amends FAR subpart 42.12 to expand and clarify

procedures for processing novation agreements, and for determining when

use of a novation agreement is appropriate.

Item XII--Commercial Bills of Lading, Small Package Shipments (FAR Case

97-017)

This final rule amends FAR 47.303-17 to raise the threshold for

requiring receipted freight bills for small package shipments from $25

to $100, and the maximum amount that the Government may pay for

invoiced but unsupported transportation charges from $100 to $250.

These increased amounts are considered to more accurately reflect

shipping costs in today's business environment.

Item XIII--Standard Form 1406, Preaward Survey of Prospective

Contractor--Quality Assurance (FAR Case 96-022)

This final rule revises Standard Form 1406, Preaward Survey of

Prospective Contractor--Quality Assurance, to delete references to

canceled specifications, and to conform the language in the form to the

current language in FAR part 46.

Item XIV--Technical Amendments

This document makes technical corrections to FAR 1.201-1, 19.811-1,

and 42.203. Standard Forms 33, 1435, 1436, and 1437 are reissued to

reflect changes to internal references as a result of the rewrite of

FAR part 15. Standard Form 279 is reissued to provide accounting for

purchases under the commercial test.

Dated: December 1, 1997.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Federal Acquisition Circular

Federal Acquisition Circular (FAC) 97-03 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 97-03 is effective

February 9, 1998, except for Items VI, IX, and XIV, which are effective

December 9, 1997.

Dated: November 22, 1997.

Eleanor R. Spector,

Director, Defense Procurement.

Dated: November 28, 1997.

Ida M. Ustad,

Deputy Associate Administrator, Office of Acquisition Policy, General

Services Administration.

Dated: November 18, 1997.

Tom Luedtke,

Deputy Associate Administrator for Procurement, National Aeronautics

and Space Administration.

[FR Doc. 97-31813 Filed 12-8-97; 8:45 am]

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