Federal Acquisition Regulation; Liquidated Damages

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 11, 19, 52, and 53

[FAC 97-05; FAR Cases 89-042 and 97-300; Item III]

RINs 9000-AD20 and 9000-AH53

Federal Acquisition Regulation; Liquidated Damages

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

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

ACTION: Proposed and interim rules adopted as final with changes.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed to convert the proposed and

interim rules to final with changes. This final rule amends the Federal

Acquisition Regulation (FAR) to clarify policy on liquidated damages

and commercial subcontracting plans and to implement OFPP Policy Letter

95-1, Subcontracting Plans for Companies Supplying Commercial Items.

The interim rule published as FAR case 89-042 at 54 FR 30708, July 21,

1989, has been merged with this final rule. This regulatory action was

not subject to Office of Management and Budget review under Executive

Order 12866, dated September 30, 1993, and is not a major rule under 5

U.S.C. 804.

EFFECTIVE DATE: August 21, 1998.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS

Building, Washington, DC 20405, (202) 501-4755, for information

pertaining to status or publication schedules. For clarification of

content, contact Ms. Victoria Moss, Procurement Analyst, at (202) 501-

4764. Please cite FAC 97-05, FAR case 97-300.

SUPPLEMENTARY INFORMATION:

A. Background

An interim rule, under FAR Case 89-042 (Liquidated Damages), was

published on July 21, 1989 (54 FR 30708), to require a prime contractor

to pay liquidated damages upon a finding of a lack of good faith effort

to meet small business subcontracting goals. The rule implemented

Section 304 of the Business Opportunity Development Reform Act of 1988,

Pub. L. 100-656. The interim rule is hereby adopted as final with

changes and merged with this final rule.

A proposed rule containing revisions to the interim rule was

published on April 11, 1997 (62 FR 17960). The revisions in the

proposed rule resulted from the public comments received on the interim

rule, and from the requirements of OFPP Policy Letter 95-1,

Subcontracting Plans for Companies Supplying Commercial Items.

Eight sources submitted comments in response to the proposed rule.

All comments were considered in developing this final rule.

B. Regulatory Flexibility Act

The Department of Defense, the General Services Administration, and

the National Aeronautics and Space Administration certify that this

final rule will not have a significant economic impact on a substantial

number of small entities within the meaning of the Regulatory

Flexibility Act, 5 U.S.C. 601, et seq., because small business concerns

are exempt from subcontracting plan requirements.

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 11, 19, 52, and 53

Government procurement.

Dated: June 11, 1998.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Interim Rule Adopted as Final with Changes

Accordingly, the interim rule published as FAR Case 89-042 amending

48 CFR Parts 19 and 52, which was published at 54 FR 30708, July 21,

1989, is hereby adopted as final and merged with this final rule with

the following changes:

1. The authority citation for 48 CFR Parts 11, 19, 52, and 53

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).

PART 11--DESCRIBING AGENCY NEEDS

2. Section 11.501 is revised to read as follows:

11.501 General.

This subpart provides policies and procedures for the use of

liquidated damages clauses in solicitations and contracts for supplies,

services, and construction, except for the Liquidated Damages--

Subcontracting Plan clause at 52.219-16, which may be applied pursuant

to 19.705-7.

PART 19--SMALL BUSINESS PROGRAMS

3. Section 19.701 is revised to read as follows:

19.701 Definitions.

Commercial plan means a subcontracting plan (including goals) that

covers the offeror's fiscal year and that applies to the entire

production of commercial items sold by either the entire company or a

portion thereof (e.g., division, plant, or product line).

Failure to make a good faith effort to comply with the

subcontracting plan means willful or intentional failure to perform in

accordance with the requirements of the subcontracting plan, or willful

or intentional action to frustrate the plan.

Individual contract plan means a subcontracting plan that covers

the entire contract period (including option periods), applies to a

specific contract, and has goals that are based on the offeror's

planned subcontracting in support of the specific contract, except that

indirect costs incurred for common or joint purposes may be allocated

on a prorated basis to the contract.

Master plan means a subcontracting plan that contains all the

required elements of an individual contract plan, except goals, and may

be incorporated into individual contract plans, provided the master

plan has been approved.

Small business subcontractor means any concern that--

(a) In connection with subcontracts of $10,000 or less, has a

number of employees, including its affiliates, that does not exceed 500

persons; and

(b) In connection with subcontracts exceeding $10,000, has a number

of employees or average annual receipts, including its affiliates, that

does not exceed the size standard under 19.102 for the product or

service it is providing on the subcontract.

Subcontract means any agreement (other than one involving an

employer-employee relationship) entered into by a Government prime

contractor or subcontractor calling for supplies and/or services

required for performance of the contract, contract modification, or

subcontract.

4. Section 19.702 is amended by revising paragraph (a) introductory

text,

[[Page 34065]]

the first sentences of (a)(1) and (a)(2); and paragraph (b)(4) to read

as follows:

19.702 Statutory requirements.

* * * * *

(a) Except as stated in paragraph (b) of this section, Section 8(d)

of the Small Business Act (15 U.S.C. 637(d)) imposes the following

requirements regarding subcontracting with small businesses and small

business subcontracting plans:

(1) In negotiated acquisitions, each solicitation of offers to

perform a contract or contract modification, that individually is

expected to exceed $500,000 ($1,000,000 for construction) and that has

subcontracting possibilities, shall require the apparently successful

offeror to submit an acceptable subcontracting plan. * * *

(2) In sealed bidding acquisitions, each invitation for bids to

perform a contract or contract modification, that individually is

expected to exceed $500,000 ($1,000,000 for construction) and that has

subcontracting possibilities, shall require the bidder selected for

award to submit a subcontracting plan. * * *

(b) * * *

(4) For modifications to contracts within the general scope of the

contract that do not contain the clause at 52.219-8, Utilization of

Small, Small Disadvantaged and Women-Owned Small Business Concerns (or

equivalent prior clauses, e.g., contracts awarded before the enactment

of Pub. L. 95-507).

* * * * *

5. Section 19.703 is amended in paragraph (a)(2) by removing ``13

CFR 124.601--124.610'' and inserting in its place ``13 CFR 124.601

through 124.610''; and in paragraph (b) by revising the first sentence

to read as follows:

19.703 Eligibility requirements for participating in the program.

* * * * *

(b) A contractor acting in good faith may rely on the written

representation of its subcontractor regarding the subcontractor's

status as a small business concern, a small disadvantaged business

concern, or a women-owned small business concern. * * *

6. Section 19.704 is amended--

(a) By redesignating paragraphs (a)(2) through (a)(6) as (a)(7)

through (a)(11), respectively, and adding new paragraphs (a)(2) through

(a)(6);

(b) In newly designated (a)(8) by removing the word ``will'' the

second time it appears;

(c) By revising newly designated paragraphs (a)(9), 10) and (11),

the first sentence of paragraph (b), and (c); and

(d) By adding paragraph (d). The revised and added text reads as

follows:

19.704 Subcontracting plan requirements.

(a) * * *

(2) A statement of the total dollars planned to be subcontracted

and a statement of the total dollars planned to be subcontracted to

small, small disadvantaged and women-owned small business concerns;

(3) A description of the principal types of supplies and services

to be subcontracted and an identification of the types planned for

subcontracting to small, small disadvantaged and women-owned small

business concerns;

(4) A description of the method used to develop the subcontracting

goals;

(5) A description of the method used to identify potential sources

for solicitation purposes;

(6) A statement as to whether or not the offeror included indirect

costs in establishing subcontracting goals, and a description of the

method used to determine the proportionate share of indirect costs to

be incurred with small, small disadvantaged and women-owned small

business concerns;

* * * * *

(9) Assurances that the offeror will include the clause at 52.219-

8, Utilization of Small, Small Disadvantaged and Women-Owned Small

Business Concerns (see 19.708(a)), in all subcontracts that offer

further subcontracting opportunities, and that the offeror will require

all subcontractors (except small business concerns) that receive

subcontracts in excess of $500,000 ($1,000,000 for construction) to

adopt a plan that complies with the requirements of the clause at

52.219-9, Small, Small Disadvantaged and Women-Owned Small Business

Subcontracting Plan (see 19.708(b));

(10) Assurances that the offeror will--

(i) Cooperate in any studies or surveys as may be required;

(ii) Submit periodic reports so that the Government can determine

the extent of compliance by the offeror with the subcontracting plan;

(iii) Submit Standard Form (SF) 294, Subcontracting Report for

Individual Contracts, and SF 295, Summary Subcontract Report, following

the instructions on the forms or as provided in agency regulations; and

(iv) Ensure that its subcontractors agree to submit SF 294 and SF

295; and

(11) A description of the types of records that will be maintained

concerning procedures adopted to comply with the requirements and goals

in the plan, including establishing source lists; and a description of

the offeror's efforts to locate small, small disadvantaged and women-

owned small business concerns and to award subcontracts to them.

(b) Contractors may establish, on a plant or division-wide basis, a

master plan (see 19.701) that contains all the elements required by the

clause at 52.219-9, Small, Small Disadvantaged and Women-Owned Small

Business Subcontracting Plan, except goals. * * *

(c) For multiyear contracts or contracts containing options, the

cumulative value of the basic contract and all options is considered in

determining whether a subcontracting plan is necessary (see 19.705-

2(a)). If a plan is necessary and the offeror is submitting an

individual contract plan, the plan shall contain all the elements

required by paragraph (a) of this section and shall contain separate

statements and goals for the basic contract and for each option.

(d) A commercial plan (as defined in 19.701) is the preferred type

of subcontracting plan for contractors furnishing commercial items. The

contractor shall--

(1) Submit the commercial plan to either the first contracting

officer awarding a contract subject to the plan during the contractor's

fiscal year, or, if the contractor has ongoing contracts with

commercial plans, to the contracting officer responsible for the

contract with the latest completion date. The contracting officer shall

negotiate the commercial plan for the Government. The approved

commercial plan shall remain in effect during the contractor's fiscal

year for all Government contracts in effect during that period; and

(2) Submit a new commercial plan, 30 working days before the end of

the fiscal year, to the contracting officer responsible for the

uncompleted Government contract with the latest completion date. The

contractor must provide to each contracting officer responsible for an

ongoing contract subject to the plan, the identity of the contracting

officer that will be negotiating the new plan. When the new commercial

plan is approved, the contractor shall provide a copy of the approved

plan to each contracting officer responsible for an ongoing contract

that is subject to the plan.

19.705-1 [Amended]

7. Section 19.705-1 is amended in the first sentence by removing

``award fee'' and inserting ``award-fee'' in its place.

[[Page 34066]]

8. Section 19.705-4 is amended--

(a) By revising the first and second sentences of paragraph (b);

(b) By revising paragraph (c);

(c) By revising paragraph (d)(1); and

(d) By redesignating paragraphs (d)(3) through (d)(6) as (d)(4)

through (d)(7), respectively, and adding a new paragraph (d)(3); and by

revising newly designated (d)(5). The new and revised text reads as

follows:

19.705-4 Reviewing the subcontracting plan.

* * * * *

(b) If, under a sealed bid solicitation, a bidder submits a plan

that does not cover each of the 11 required elements (see 19.704), the

contracting officer shall advise the bidder of the deficiency and

request submission of a revised plan by a specific date. If the bidder

does not submit a plan that incorporates the required elements within

the time allotted, the bidder shall be ineligible for award. * * *

(c) In negotiated acquisitions, the contracting officer shall

determine whether the plan is acceptable based on the negotiation of

each of the 11 elements of the plan (see 19.704). Subcontracting goals

should be set at a level that the parties reasonably expect can result

from the offeror expending good faith efforts to use small, small

disadvantaged, and women-owned small business subcontractors to the

maximum practicable extent. The contracting officer shall take

particular care to ensure that the offeror has not submitted

unreasonably low goals to minimize exposure to liquidated damages and

to avoid the administrative burden of substantiating good faith

efforts. Additionally, particular attention should be paid to the

identification of steps that, if taken, would be considered a good

faith effort. No goal should be negotiated upward if it is apparent

that a higher goal will significantly increase the Government's cost or

seriously impede the attainment of acquisition objectives. An incentive

subcontracting clause (see 52.219-10, Incentive Subcontracting

Program), may be used when additional and unique contract effort, such

as providing technical assistance, could significantly increase

subcontract awards to small, small disadvantaged or women-owned small

businesses.

(d) * * *

(1) Obtain information available from the cognizant contract

administration office, as provided for in 19.706(a), and evaluate the

offeror's past performance in awarding subcontracts for the same or

similar products or services to small, small disadvantaged and women-

owned small business concerns. If information is not available on a

specific type of product or service, evaluate the offeror's overall

past performance and consider the performance of other contractors on

similar efforts.

* * * * *

(3) Ensure that the subcontracting goals are consistent with the

offeror's cost or pricing data or information other than cost or

pricing data.

* * * * *

(5) Evaluate subcontracting potential, considering the offeror's

make-or-buy policies or programs, the nature of the supplies or

services to be subcontracted, the known availability of small, small

disadvantaged and women-owned small business concerns in the

geographical area where the work will be performed, and the potential

contractor's long-standing contractual relationship with its suppliers.

* * * * *

9. Section 19.705-6 is amended by revising the introductory text

and paragraphs (b) and (g) to read as follows:

19.705-6 Postaward responsibilities of the contracting officer.

After a contract or contract modification containing a

subcontracting plan is awarded, the contracting officer who approved

the plan is responsible for the following:

* * * * *

(b) Forwarding a copy of each commercial plan and any associated

approvals to the Assistant Regional Administrator for Procurement

Assistance in the SBA region where the contractor's headquarters is

located.

* * * * *

(g) Taking action to enforce the terms of the contract upon receipt

of a notice under 19.706(f).

10. Section 19.705-7 is amended by revising paragraphs (b) and (c);

the last sentence of paragraph (d) and paragraph (f); and by adding

paragraph (h) to read as follows:

19.705-7 Liquidated damages.

* * * * *

(b) The amount of damages attributable to the contractor's failure

to comply shall be an amount equal to the actual dollar amount by which

the contractor failed to achieve each subcontracting goal.

(c) If, at completion of the basic contract or any option, or in

the case of a commercial plan, at the close of the fiscal year for

which the plan is applicable, a contractor has failed to meet its

subcontracting goals, the contracting officer shall review all

available information for an indication that the contractor has not

made a good faith effort to comply with the plan. If no such indication

is found, the contracting officer shall document the file accordingly.

If the contracting officer decides in accordance with paragraph (d) of

this subsection that the contractor failed to make a good faith effort

to comply with its subcontracting plan, the contracting officer shall

give the contractor written notice specifying the failure, advising the

contractor of the possibility that the contractor may have to pay to

the Government liquidated damages, and providing a period of 15 working

days (or longer period as necessary) within which to respond. The

notice shall give the contractor an opportunity to demonstrate what

good faith efforts have been made before the contracting officer issues

the final decision, and shall further state that failure of the

contractor to respond may be taken as an admission that no valid

explanation exists.

(d) * * * However, when considered in the context of the

contractor's total effort in accordance with its plan, the following,

though not all inclusive, may be considered as indicators of a failure

to make a good faith effort: a failure to attempt to identify, contact,

solicit, or consider for contract award small, small disadvantaged or

women-owned small business concerns; a failure to designate and

maintain a company official to administer the subcontracting program

and monitor and enforce compliance with the plan; a failure to submit

Standard Form (SF) 294, Subcontracting Report for Individual Contracts,

or SF 295, Summary Subcontract Report, in accordance with the

instructions on the forms or as provided in agency regulations; a

failure to maintain records or otherwise demonstrate procedures adopted

to comply with the plan; or the adoption of company policies or

procedures that have as their objectives the frustration of the

objectives of the plan.

* * * * *

(f) With respect to commercial plans approved under the clause at

52.219-9, Small, Small Disadvantaged and Women-Owned Small Business

Subcontracting Plan, the contracting officer that approved the plan

shall--

(1) Perform the functions of the contracting officer under this

subsection on behalf of all agencies with contracts covered by the

commercial plan;

(2) Determine whether or not the goals in the commercial plan were

achieved and, if they were not achieved, review all available

information for an indication that the contractor has not

[[Page 34067]]

made a good faith effort to comply with the plan, and document the

results of the review;

(3) If a determination is made to assess liquidated damages, in

order to calculate and assess the amount of damages, the contracting

officer shall ask the contractor to provide--

(i) Contract numbers for the Government contracts subject to the

plan;

(ii) The total Government sales during the contractor's fiscal

year; and

(iii) The amount of payments made under the Government contracts

subject to that plan that contributed to the contractor's total sales

during the contractor's fiscal year; and

(4) When appropriate, assess liquidated damages on the Government's

behalf, based on the pro rata share of subcontracting attributable to

the Government contracts. For example: The contractor's total actual

sales were $50 million and its actual subcontracting was $20 million.

The Government's total payments under contracts subject to the plan

contributing to the contractor's total sales were $5 million, which

accounted for 10 percent of the contractor's total sales. Therefore,

the pro rata share of subcontracting attributable to the Government

contracts would be 10 percent of $20 million, or $2 million. To

continue the example, if the contractor failed to achieve its small

business goal by 1 percent, the liquidated damages would be calculated

as 1 percent of $2 million, or $20,000. The contracting officer shall

make similar calculations for each category of small business where the

contractor failed to achieve its goal and the sum of the dollars for

all of the categories equals the amount of the liquidated damages to be

assessed. A copy of the contracting officer's final decision assessing

liquidated damages shall be provided to other contracting officers with

contracts subject to the commercial plan.

* * * * *

(h) Every contracting officer with a contract that is subject to a

commercial plan shall include in the contract file a copy of the

approved plan and a copy of the final decision assessing liquidating

damages, if applicable.

11. Section 19.706 is amended in paragraph (a) by removing the

paragraph designation ``(a)''; by removing paragraph (b); by

redesignating (a)(1) through (a)(6) as (a) through (f), respectively;

in newly designated (e) by removing ``and'' at the end; in newly

designated (f) by removing the period at the end and inserting ``;

and''; and by adding (g) to read as follows:

19.706 Responsibilities of the cognizant administrative contracting

officer.

* * * * *

(g) Immediate notice that performance under a contract is complete,

that the goals were or were not met, and, if not met, whether there is

any indication of a lack of a good faith effort to comply with the

subcontracting plan.

12. Section 19.708 is amended by revising paragraph (b)(2); in the

first sentence of (c)(1) by removing ``(see 19.702(a)(1))'' and

inserting in its place ``(see 19.702)''; and in the second sentence of

(c)(2) by removing ``award fee'' and inserting in its place ``award-

fee''. The revised text reads as follows:

19.708 Solicitation provisions and contract clauses.

* * * * *

(b) ** * *

(2) The contracting officer shall insert the clause at 52.219-16,

Liquidated Damages--Subcontracting Plan, in all solicitations and

contracts containing the clause at 52.219-9, Small, Small Disadvantaged

and Women-Owned Small Business Subcontracting Plan, or the clause with

its Alternate I or II.

* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

13. Section 52.219-9 is amended by revising the clause date and

paragraphs (b), (d)(2)(i), (d)(9), (d)(10), the first sentence of

(d)(11) introductory text, and the second sentence of (d)(11)(vi); in

the second sentence of (e)(1) by revising ``contractor's'' to read

``Contractor's''; and by revising (f) introductory text and (g). The

revised text reads as follows:

52.219-9 Small, Small Disadvantaged and Women-Owned Small Business

Subcontracting Plan.

* * * * *

SMALL, SMALL DISADVANTAGED AND WOMEN-OWNED SMALL BUSINESS

SUBCONTRACTING PLAN (AUG 1998)

* * * * *

(b) Definitions. As used in this clause--

Commercial item means a product or service that satisfies the

definition of commercial item in section 2.101 of the Federal

Acquisition Regulation.

Commercial plan means a subcontracting plan (including goals)

that covers the offeror's fiscal year and that applies to the entire

production of commercial items sold by either the entire company or

a portion thereof (e.g., division, plant, or product line).

Individual contract plan means a subcontracting plan that covers

the entire contract period (including option periods), applies to a

specific contract, and has goals that are based on the offeror's

planned subcontracting in support of the specific contract, except

that indirect costs incurred for common or joint purposes may be

allocated on a prorated basis to the contract.

Master plan means a subcontracting plan that contains all the

required elements of an individual contract plan, except goals, and

may be incorporated into individual contract plans, provided the

master plan has been approved.

Subcontract means any agreement (other than one involving an

employer-employee relationship) entered into by a Federal Government

prime Contractor or subcontractor calling for supplies or services

required for performance of the contract or subcontract.

* * * * *

(d) * * *

(2) * * *

(i) Total dollars planned to be subcontracted for an individual

contract plan; or the offeror's total projected sales, expressed in

dollars, and the total value of projected subcontracts to support

the sales for a commercial plan;

* * * * *

(9) Assurances that the offeror will include the clause in this

contract entitled ``Utilization of Small, Small Disadvantaged and

Women-Owned Small Business Concerns'' in all subcontracts that offer

further subcontracting opportunities, and that the offeror will

require all subcontractors (except small business concerns) that

receive subcontracts in excess of $500,000 ($1,000,000 for

construction of any public facility) to adopt a subcontracting plan

that complies with the requirements of this clause.

(10) Assurances that the offeror will--

(i) Cooperate in any studies or surveys as may be required;

(ii) Submit periodic reports so that the Government can

determine the extent of compliance by the offeror with the

subcontracting plan;

(iii) Submit Standard Form (SF) 294, Subcontracting Report for

Individual Contracts, and/or SF 295, Summary Subcontract Report,

following the instructions on the forms or as provided in agency

regulations; and

(iv) Ensure that its subcontractors agree to submit SF 294 and

SF 295.

(11) A description of the types of records that will be

maintained concerning procedures that have been adopted to comply

with the requirements and goals in the plan, including establishing

source lists; and a description of the offeror's efforts to locate

small, small disadvantaged and women-owned small business concerns

and award subcontracts to them. * * *

* * * * *

(vi) * * * Contractors having commercial plans need not comply

with this requirement.

* * * * *

(f) A master plan on a plant or division-wide basis that

contains all the elements required by paragraph (d) of this clause,

except goals, may be incorporated by reference as a part of the

subcontracting plan

[[Page 34068]]

required of the offeror by this clause; provided--

* * * * *

(g) A commercial plan is the preferred type of subcontracting

plan for contractors furnishing commercial items. The commercial

plan shall relate to the offeror's planned subcontracting generally,

for both commercial and Government business, rather than solely to

the Government contract. Commercial plans are also preferred for

subcontractors that provide commercial items under a prime contract,

whether or not the prime contractor is supplying a commercial item.

* * * * *

(End of clause)

* * * * *

14. Section 52.219-16 is amended by revising the clause date,

paragraph (b), the first sentence of (c), and paragraph

(d) to read as follows:

52.219-16 Liquidated Damages--Subcontracting Plan.

* * * * *

LIQUIDATED DAMAGES--SUBCONTRACTING PLAN (AUG 1998)

* * * * *

(b) Performance shall be measured by applying the percentage

goals to the total actual subcontracting dollars or, if a commercial

plan is involved, to the pro rata share of actual subcontracting

dollars attributable to Government contracts covered by the

commercial plan. If, at contract completion or, in the case of a

commercial plan, at the close of the fiscal year for which the plan

is applicable, the Contractor has failed to meet its subcontracting

goals and the Contracting Officer decides in accordance with

paragraph (c) of this clause that the Contractor failed to make a

good faith effort to comply with its subcontracting plan,

established in accordance with the clause in this contract entitled

``Small, Small Disadvantaged and Women-Owned Small Business

Subcontracting Plan,'' the Contractor shall pay the Government

liquidated damages in an amount stated. The amount of probable

damages attributable to the Contractor's failure to comply shall be

an amount equal to the actual dollar amount by which the Contractor

failed to achieve each subcontract goal.

(c) Before the Contracting Officer makes a final decision that

the Contractor has failed to make such good faith effort, the

Contracting Officer shall give the Contractor written notice

specifying the failure and permitting the Contractor to demonstrate

what good faith efforts have been made and to discuss the matter. *

* *

(d) With respect to commercial plans, the Contracting Officer

who approved the plan will perform the functions of the Contracting

Officer under this clause on behalf of all agencies with contracts

covered by the commercial plan.

* * * * *

(End of clause)

PART 53--FORMS

53.219 [Amended]

15. Section 53.219 is amended in paragraphs (a) and (b) by removing

``(REV. 10/96)'' and inserting ``(Rev. 8/98)'', and by revising the

citation ``19.704(a)(5)'' to read ``19.704(a)(10)''

16. Section 53.301-294 is revised to read as follows:

53.301-294 Standard Form 294, Subcontracting Report for Individual

Contracts.

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[[Page 34069]]

[GRAPHIC] [TIFF OMITTED] TR22JN98.011

[[Page 34070]]

[GRAPHIC] [TIFF OMITTED] TR22JN98.012

17. Section 53.301-295 is revised to read as follows:

[[Page 34071]]

53.301-295 Standard Form 295, Subcontract Report.

[GRAPHIC] [TIFF OMITTED] TR22JN98.013

[[Page 34072]]

[GRAPHIC] [TIFF OMITTED] TR22JN98.014

[FR Doc. 98-16114 Filed 6-19-98; 8:45 am]

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