DATE: June 6, 2000

FROM: Barry McVay, CPCM

SUBJECT: Federal Acquisition Circular (FAC) 97-18, Miscellaneous Amendments

SOURCE: Federal Register, June 6, 2000, Vol. 65, No. 109, page 36011

AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA)

ACTION: Final and Interim Rules

SYNOPSIS: The Federal Acquisition Regulatory Council is issuing FAC 97-18 to amend the Federal Acquisition Regulation (FAR) in the following nine subject areas: (1) rescission of Office of Federal Procurement Policy letters; (2) FAR drafting principles; (3) requirements supporting procurement of recycled products and environmentally preferable services; (4) general records schedules; (5) Federal Supply Schedules small business opportunities; (6) trade agreements thresholds; (7) restrictions on acquisitions from Yugoslavia and Afghanistan; (8) applicability, thresholds, and waiver of cost accounting standards coverage; and (9) technical amendments. These FAR changes are in plain language as required by the June 1, 1998, Presidential memorandum "Plain Language in Government Writing."

DATES: Items (1), (6), (8), and the technical amendments are effective June 6, 2000. Item (7) is effective July 6, 2000. Items (2), (3), (4), and (5) are effective August 7, 2000. Comments on the interim rule at item (8) should be submitted to the FAR Secretariat by August 7, 2000, to be considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments on the interim rule at item (8) to the General Services Administration, FAR Secretariat (MVR), 1800 F Street, NW, Room 4035, Attn: Ms. Laurie Duarte, Washington, DC 20405. Cite FAC 97-18, FAR case 2000-301 in all correspondence related to the interim rule. Address e-mail comments to farcase.2000-301@gsa.gov.


     Item (1): Jeremy Olson at 202-501-0692.

     Item (2): Ralph De Stefano at 202-501-1758.

     Items (3), (6), and (7): Paul Linfield at 202-501-1757.

     Items (4), (5), and (8): Linda Nelson at 202-501-1900.

For more information on the technical amendments or for general information, contact the FAR Secretariat, Room 4035, GS Building, Washington, DC 20405, 202-501-4755.

SUPPLEMENTAL INFORMATION: (1) Rescission of Office of Federal Procurement Policy (OFPP) Letters: On March 30, 2000, the OFPP rescinded 22 policy letters because they were either obsolete, superseded by statutory changes, or reflected in policies contained in the FAR (see the March 30, 2000, FEDERAL CONTRACTS DISPATCH "Office of Federal Procurement Policy (OFPP); Rescission of 22 Policy Letters."). Although the rescission of these policy letters did not change any FAR policies, cross-references in the FAR to those rescinded policy letters are no longer necessary or appropriate. Therefore, this final rule removes those cross-references from the following FAR sections: paragraph (a) of FAR 1.103, Authority; paragraph (c) of FAR 9.500, Scope of Subpart; paragraph (c)(3)(iv) of FAR 15.304, Evaluation Factors and Significant Subfactors; FAR 22.1101, Applicability (remove the second, third, and fourth sentences); FAR 35.000, Scope of Part; paragraph (c) of FAR 37.503, Agency-Head Responsibilities (remove paragraph (c)); FAR 37.600, Scope of Subpart (remove last sentence); paragraph (a) of FAR 42.002, Interagency Agreements; and FAR 42.1500, Scope of Subpart (remove second sentence).

(2) FAR Drafting Principles: This final rule adds drafting principles to the FAR "to enhance a common understanding of the regulation among all members of the acquisition team and other users." A proposed rule was published January 26, 2000 (see the January 26, 2000, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Drafting Principles"), and three comments were received. As a result of those comments, the proposed rule is finalized with changes. The following are the primary changes made to the FAR by this final rule, with the differences between the proposed rule and the final rule in brackets ("[ ]"):

(3) Requirements Supporting Procurement of Recycled Products and Environmentally Preferable Services: This final rule implements Executive Order (EO) 13101, Greening the Government through Waste Prevention, Recycling, and Federal Acquisition, dated September 14, 1998. On September 23, 1999, a proposed rule was published, and seven respondents submitted comments. As a result of the comments, minor editorial changes have been made.

The following are the main changes made to the FAR by this rule:

EDITOR'S NOTE: For more on the recent issuance of three other "greening" executive orders (EO 13148, Greening the Government Through Leadership in Environmental Management; EO 13149, Greening the Government Through Federal Fleet and Transportation Efficiency; and EO 13150, Federal Workforce Transportation), see the April 26, 2000, FEDERAL CONTRACTS DISPATCH "'Greening the Government' Executive Orders."

(4) General Records Schedules: This final rule conforms the FAR with the revised National Archives and Records Administration General Records Schedule 3, Procurement, Supply, and Grants Records, dated December 15, 1998.

(5) Federal Supply Schedules (FSS) Small Business Opportunities: This final rule is intended to insure that small businesses with FSS contracts are given the maximum practicable opportunity to compete for and receive FSS purchases. A proposed rule was published on September 14, 1999, and thirty-two respondents submitted comments. Those comments produced several minor editorial changes in the final rule.

The following are the main changes being made to the FAR by this final rule:

(6) Trade Agreements Thresholds: This final rule revises the FAR to conform to the revised dollar thresholds for application of the Trade Agreements Act and the North American Free Trade Agreement (NAFTA), as published by the U.S. Trade Representative on March 31, 2000 (see the March 31, 2000 FEDERAL CONTRACTS DISPATCH "Procurement Thresholds for Implementation of Trade Agreements Act"). The threshold changes are as follows:

Trade Agreements Act
     Procurement of goods and services -- $177,000 (down from $186,000)
     Procurement of construction services -- $6,806,000 (down from $7,143,000)

     Procurement of goods and services -- $54,372 (up from $53,150)
     Procurement of construction services -- $7,068,419 (up from $6,909,500)

The appropriate threshold changes are made to the following sections of the FAR:

EDITOR'S NOTE: Also see today's FEDERAL CONTRACTS DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS); NAFTA Procurement Threshold," for a interim rule published by DOD which increases the NAFTA threshold for supplies from Mexico from $53,150 to $54,372.

(7) Restrictions on Acquisitions from Yugoslavia and Afghanistan: This final rule revised the FAR to implement Executive Order 13121 of April 30, 1999, Blocking Property and Prohibiting Transactions with the Taliban; and Executive Order 13129 of July 4, 1999, Blocking Property of the Governments of the Federal Republic of Yugoslavia (Serbia and Montenegro), the Republic of Serbia, and the Republic of Montenegro, and Prohibiting Trade Transactions Involving the Federal Republic of Yugoslavia (Serbia and Montenegro) in Response to the Situation in Kosovo. These executive orders prohibit the importation into the United States of any goods or services from Serbia (excluding the territory of Kosovo) or the territory of Afghanistan controlled by the Taliban.

A proposed rule was published December 1, 1999, and four respondents submitted comments. As a result of those comments, the proposed rule is finalized with changes. The following are the primary changes made to the FAR by this final rule, with the differences between the proposed rule and the final rule in brackets ("[ ]"):

(8) Applicability, Thresholds and Waiver of Cost Accounting Standards (CAS) Coverage: On October 5, 1999, President Clinton signed the National Defense Authorization Act for Fiscal Year 2000 (Public Law 106-65). Section 802 of the act, titled "Streamlined Applicability of Cost Accounting Standards", makes changes in the applicability requirements for CAS coverage. On February 7, 2000, the Cost Accounting Standards Board (CASB) issued an interim rule implementing the changes effective April 2, 2000 (see the February 7, 2000, FEDERAL CONTRACTS DISPATCH "Cost Accounting Standards Board (CASB); Applicability, Thresholds and Waiver of Cost Accounting Standards Coverage"). Because the CASB interim rule has gone into effect, revisions to the FAR on an interim basis are considered appropriate.

The following are the changes made to the FAR by this interim rule:

(9) Technical Amendments: Four minor editorial changes are made, the most significant being changing the date "19__" to "20__" in paragraphs (a) and (b) of FAR 49.601-1, Telegraphic Notice; and in FAR 49.601-2, Letter Notice (in paragraph (a) of the Notice of Termination to Prime Contractors; in paragraph (i) in the Acknowledgment of Notice; and in paragraph (a) of the Alternate notice).

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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