Federal Acquisition Circular 97-04; 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) 97-04. 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 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 the analyst whose name appears in the table below in

relation to each FAR case or subject area. Please cite FAC 97-04 and

specific FAR case number(s).

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Item Subject FAR case Analyst

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I............. Use of Data Universal 95-307 Moss.

Numbering System as

the Primary

Contractor

Identification.

II............ Federal Compliance 92-054B Linfield.

With Right-To-Know

Laws and Pollution

Prevention

Requirements.

III........... Review of Procurement 97-601 Linfield.

Integrity Clauses.

IV............ Certificate of 96-002 Moss.

Competency.

V............. Applicability of Cost 97-020 Nelson.

Accounting Standards

(CAS) Coverage.

VI............ OMB Circular No. A-133 97-029 Olson.

VII........... SIC Code and Size 97-026 Moss.

Standard Appeals.

VIII.......... Small Business 97-305 Moss.

Competitiveness

Demonstration Program.

IX............ Special Disabled and 95-602 O'Neill.

Vietnam Era Veterans.

X............. Treatment of Caribbean 97-039 Linfield.

Basin Country End

Products.

XI............ Administrative Changes 97-025 Nelson.

to Cost Accounting

Standards (CAS)

Applicability.

XII........... Changes in Contract 95-022 Klein.

Administration and

Audit Cognizance.

XIII.......... Limitation on 97-303 Nelson.

Allowability of

Compensation for

Certain Contractor

Personnel (Interim).

XIV........... Transfer of Assets 96-006 Nelson.

Following a Business

Combination.

XV............ Modular Contracting... 96-605 Nelson.

XVI........... Technical Amendments.. ............... ...............

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SUPPLEMENTARY INFORMATION: Summaries for each FAR rule follow. For the

actual revisions and/or amendments to these FAR cases, refer to the

specific item number and subject set forth in the documents following

these item summaries.

Federal Acquisition Circular 97-04 amends the Federal Acquisition

Regulation (FAR) as specified below:

Item I--Use of Data Universal Numbering System as the Primary

Contractor Identification (FAR Case 95-307)

This final rule amends FAR Subpart 4.6, Contract Reporting, and

52.212-1, Instructions to Offerors--Commercial Items; and adds a new

solicitation provision at 52.204-6, Data Universal Numbering System

(DUNS) Number; to replace the Contractor Establishment Code (CEC) with

the Data Universal Numbering System (DUNS) number as the means of

identifying contractors in the Federal Procurement Data System (FPDS).

It reflects Dun and Bradstreet procedures for offerors located

overseas.

Item II--Federal Compliance With Right-To-Know Laws and Pollution

Prevention Requirements (FAR Case 92-054B)

The interim rule published as Item V of FAC 90-46 is revised and

finalized. The rule implements Executive Order 12856 of August 3, 1993,

``Federal Compliance With Right-To-Know Laws and Pollution Prevention

Requirements.'' The final rule differs from the interim rule in that it

amends FAR 23.1004 and 52.223-5 to clarify the obligations of Federal

facilities to comply with the reporting and emergency planning

requirements of the Pollution Prevention Act of 1990 and the Emergency

Planning and Community Right-to-Know Act of 1986.

Item III--Review of Procurement Integrity Clauses (FAR Case 97-601)

This final rule amends FAR Parts 4 and 52 to revise the application

of procurement integrity requirements to contracts for commercial

items. The rule amends (1) 4.803 to remove an obsolete requirement for

maintenance of a record of persons having access to proprietary or

source selection information, (2) the clause at 52.212-4 to add the

procurement integrity provisions of 41 U.S.C. 423 to the list of laws

applicable to contracts for commercial items, and (3) the clause at

52.212-5 to remove 52.203-10, Price or Fee Adjustment for Illegal or

Improper Activity, from the list of FAR clauses required to implement

provisions of law or Executive orders. As amended by the Clinger-Cohen

Act of 1996, 41 U.S.C. 423 no longer requires that a contract clause

specify administrative remedies for procurement integrity violations.

Item IV--Certificate of Competency (FAR Case 96-002)

The interim rule published as Item IX of FAC 97-01 is converted to

a final rule with a minor change at 19.302(d). The rule implements

revisions made to the Small Business Administration's procurement

assistance programs contained in 13 CFR Part 125.

Item V--Applicability of Cost Accounting Standards (CAS) Coverage (FAR

Case 97-020)

This final rule amends FAR Parts 12 and 52 to exempt contracts and

subcontracts for the acquisition of commercial items from Cost

Accounting Standards requirements when these contracts and subcontracts

are firm-fixed-price or fixed-price with economic price adjustment

(provided that the

[[Page 9049]]

price adjustment is not based on actual costs incurred).

Item VI--OMB Circular No. A-133 (FAR Case 97-029)

This final rule amends FAR 15.209 and the associated clause at

52.215-2, Audits and Records--Negotiation, Alternate II, to implement

revisions to OMB Circular No. A-133. The circular has a new title,

``Audits of States, Local Governments, and Non-Profit Organizations,''

and now addresses audits of State and local governments as well as

audits of institutions of higher learning and other nonprofit

organizations.

Item VII--SIC Code and Size Standard Appeals (FAR Case 97-026)

This final rule amends FAR Subpart 19.3 to conform to the Small

Business Administration regulations at 13 CFR 121 and 134 pertaining to

protest of an offeror's small business representation, and appeal of a

contracting officer's standard industrial classification code

designation and related small business size standard.

Item VIII--Small Business Competitiveness Demonstration Program (FAR

Case 97-305)

This final rule amends FAR Subpart 19.10 to eliminate the

termination date of the Small Business Competitiveness Demonstration

Program, in accordance with Section 401 of the Small Business

Reauthorization Act of 1997 (Public Law 105-135).

Item IX--Special Disabled and Vietnam Era Veterans (FAR Case 95-

602)

This final rule amends FAR Subpart 22.13 and the clauses at 52.212-

5, 52.222-35, and 52.222-37 to implement revised Department of Labor

regulations regarding affirmative action for disabled veterans and

veterans of the Vietnam era.

Item X--Treatment of Caribbean Basin Country End Products (FAR Case 97-

039)

This final rule revises FAR 25.402(b) to extend the time period for

treatment of Caribbean Basin country end products as eligible products

under the Trade Agreements Act. The United States Trade Representative

has directed that such treatment continue through September 30, 1998.

Item XI--Administrative Changes to Cost Accounting Standards (CAS)

Applicability (FAR Case 97-025)

This final rule amends FAR 30.101 and the clauses at 52.230-1 and

52.230-5 to conform to changes made to the Cost Accounting Standards

(CAS) Board rules and regulations (FAR Appendix), pertaining to the

applicability of CAS to negotiated contracts and subcontracts.

Item XII--Changes in Contract Administration and Audit Cognizance (FAR

Case 95-022)

This final rule amends FAR Parts 31, 32, 42, 46, 47, and 52 to add

policies and procedures for assigning and performing contract audit

services, and to clarify the policy for assigning or delegating

responsibility for establishing forward pricing and billing rates and

final indirect cost rates.

Item XIII--Limitation on Allowability of Compensation for Certain

Contractor Personnel (FAR Case 97-303)

This interim rule revises FAR 31.205-6(p) to implement Section 808

of the National Defense Authorization Act for Fiscal Year 1998 (Public

Law 105-85). Section 808 limits the allowable compensation costs for

senior executives of contractors to the benchmark compensation amount

determined applicable for each fiscal year by the Administrator for

Federal Procurement Policy.

Item XIV--Transfer of Assets Following a Business Combination (FAR Case

96-006)

This final rule revises FAR 31.205-10(a)(5) and 31.205-52 to

conform to changes made to the Cost Accounting Standards regarding the

treatment of gains and losses attributable to tangible capital assets

subsequent to business mergers or combinations.

Item XV--Modular Contracting (FAR Case 96-605)

This final rule amends FAR Part 39 to implement Section 5202 of the

Information Technology Management Reform Act of 1996 (Public Law 104-

106). Section 5202 encourages maximum practicable use of modular

contracting for acquisition of major systems of information technology.

Agencies may also use modular contracting to acquire non-major systems

of information technology.

Item XVI--Technical Amendments

Amendments are being made at FAR 1.201-1(b)(2), 44.204(b), and

52.219-1(b)(2) and (b)(3) to update references and make editorial

changes.

Dated: February 13, 1998.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Federal Acquisition Circular

FAC 97-04

[Date]

Federal Acquisition Circular (FAC) 97-04 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 97-04 are effective

April 24, 1998, except for Items VIII, X, XIII, and XVI, which are

effective February 23, 1998.

Dated: February 11, 1998.

Eleanor R. Spector,

Director, Defense Procurement.

Dated: February 12, 1998.

Ida M. Ustad,

Deputy Associate Administrator, Office of Acquisition Policy, General

Services Administration.

Dated: February 12, 1998.

Deidre A. Lee,

Associate Administrator for Procurement, National Aeronautics and Space

Administration.

[FR Doc. 98-4290 Filed 2-20-98; 8:45 am]

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