DATE: December 11, 2003

SUBJECT: Federal Acquisition Circular (FAC) 2001-18, Miscellaneous Amendments

SOURCE: Federal Register, December 11, 2003, Vol. 68, No. 238, page 69225

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

ACTION: Final Rules

SYNOPSIS: The Federal Acquisition Secretariat is issuing FAC 2001-18 to amend the Federal Acquisition Regulation (FAR) in the following areas: (1) new consolidated Standard Form 330, Architect-Engineer Qualifications; (2) depreciation cost principle; (3) Federal Procurement Data System; (4) increased Federal Prison Industries, Inc. waiver threshold; (5) debarment and suspension -- order placement and option exercise; (6) insurance and pension costs; (7) debriefing -- competitive acquisition; and (8) technical amendments.

DATES: All items are effective January 12, 2004, except for items (3), (4), and (8), which are effective December 11, 2003.


      Item (1), Cecelia Davis, 202-219-0202.

      Items (2) and (6), Edward Loeb, 202-501-0650.

      Item (3), Gerald Zaffos, 202-208-6091.

      Item (4), Linda Nelson, 202-501-1900.

      Item (5), Craig R. Goral, 202-501-3856.

      Item (7), Julia Wise, 202-208-1168.

For general information, contact the FAR Secretariat, Room 4035, GS Building, Washington, DC 20405, 202-501-4755.

SUPPLEMENTAL INFORMATION: (1) New Consolidated Standard Form (SF) 330, Architect-Engineer Qualifications: This final rule replaces the SF 254, Architect-Engineer and Related Services Questionnaire, and SF 255, Architect-Engineer and Related Services Questionnaire for Specific Projects, with SF 330, Architect-Engineer Qualifications, a six-page form with eight pages of instructions and codes. This is necessary because the SF 254 and SF 255 were issued in 1975 and need to be streamlined and updated to facilitate electronic usage and to reflect the greatly expanded variety of A-E services provided by the A-E industry.

A proposed rule was published October 19, 2001, to replace the SF 254 and SF 255 with the SF 330 (see the October 19, 2001, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); New Consolidated Form for Selection of Architect-Engineer Contractors"). One hundred and ten respondents submitted comments, and the instructions for completing the SF 330 have been modified as follows:

The new form is added at FAR 53.301-330, Architect-Engineer Qualifications. In addition, the following FAR sections are revised to reflect the replacement of the SF 254 and SF 255 with the SF 330: FAR 1.106, OMB Approval Under the Paperwork Reduction Act; FAR 36.603, Collecting Data On and Appraising Firms' Qualifications; FAR 36.702, Forms for Use in Contracting for Architect-Engineer Services; and FAR 53.236-2, Architect-Engineer Services (SF's 252, 330, and 1421) (the title had been "Architect-Engineer Services (SF's 252, 254, 255, 1421)").

EDITOR'S NOTE: The introduction to this final rule states, "The policies and the SF 330, Architect-Engineer Qualifications, of this final rule apply for all agencies and their solicitations issued on or after January 12, 2004. However, agencies may delay implementation of this final rule until June 8, 2004, at which time it becomes mandatory for all agencies and their solicitations issued on or after that date."

In addition, the introduction states, "The SF 330 will be posted electronically on the General Services Administration forms website in a screen-fillable format, Adobe Acrobat Portable Document Format, and possibly other formats. Also, commercial vendors will develop customized software products for preparation of the SF 330, similar to those currently available for the SFs 254 and 255. Individual agencies will specify if electronic submission is required and the specific format to use."

(2) Depreciation Cost Principle: This final rule revises FAR 31.205-11, Depreciation, to improve clarity and structure, and to remove unnecessary and duplicative language.

On January 30, 2003, a proposed rule was published that would revise FAR 31.205-11, particularly in the following areas: residual values; depreciation claimed for tax purposes; write-down due to business combinations/impaired assets; and emergency facilities. In addition, it proposed to move paragraph (a), which constituted a definition of "depreciation," to FAR 2.101, Definitions, since "depreciation" is used throughout the FAR (for more on the proposed rule, see the January 30, 2003, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Depreciation Cost Principle"). Two respondents submitted comments, and several additional clarifying and editorial changes are made to the final rule.

(3) Federal Procurement Data System: This final rule amends FAR 4.602, Federal Procurement Data System, to reflect changes in contract action reporting to the Federal Procurement Data System -- Next Generation (FPDS-NG), which became operational on October 1, 2003. The prior version of FPDS captured data on individual contract actions over $25,000 and summary data on contract actions below $25,000; FPDS-NG is Internet-based and allows the government to capture data on individual transactions regardless of dollar value. Therefore, FAR 4.602 is being amended to:

In addition, the SF 279, Federal Procurement Data System (FPDS) -- Individual Contract Action Report, and the SF 281, Federal Procurement Data System (FPDS) -- Summary Contract Action Report ($25,000 or Less), are deleted.

(4) Increased Federal Prison Industries, Inc. Waiver Threshold: This rule finalizes, without change, the May 22, 2003, interim rule that revised FAR 8.606, Exceptions, to increase the Federal Prison Industries, Inc.'s (FPI) clearance exception threshold from $25 to $2,500, and to eliminate the requirement that delivery be within 10 days.

FPI is a mandatory acquisition program, and a clearance from FPI is required by FAR 8.605, Clearances, before supplies on FPI's schedule are acquired from other sources. However, FAR 8.606 provided five exceptions to the clearance requirement, including the exception in paragraph (e): "[when] orders are for listed items totaling $25 or less that require delivery within 10 days."

The FPI board of directors recently adopted a resolution increasing the blanket waiver threshold from $25 to $2,500, and eliminated the 10 day requirement. To implement the FPI resolution, an interim rule was published in FAC 2001-14, and it revised paragraph (e) to exempt "Orders...for listed items totaling $2,500 or less" (for more on the interim rule, see the May 22, 2003, FEDRAL CONTRACTS DISPATCH "Federal Acquisition Circular (FAC) 2001-14, Miscellaneous Amendments"). Comments were submitted by three respondents, but it was decided to convert the interim rule to a final rule without changes.

(5) Debarment and Suspension -- Order Placement and Option Exercise: This final rule amends FAR 9.405-1, Continuation of Current Contracts, to address the placement of orders against existing contracts and agreements with contractors that have been debarred, suspended, or proposed for debarment.

A contractor that is debarred, suspended, or proposed for debarment under FAR Subpart 9.4, Debarment, Suspension, and Ineligibility, is nonresponsible, and is excluded from receiving government contracts. However, contracts with the debarred or suspended contractor that are already in existence are not required to be terminated. In addition, FAR 9.405-1(b) states that an ordering activity "may continue to place orders against existing contracts, including indefinite-delivery contracts, in the absence of a termination."

On November 4, 2002, a proposed rule was published to amend FAR 9.405-1 to require that discretionary actions on the part of agencies meet the same standards as agencies have to meet in awarding new contracts. The proposed rule would have prohibited agencies from placing orders exceeding the guaranteed minimum against existing contracts, placing orders against optional Federal Supply Schedule contracts, adding new work, exercising options or otherwise extending the duration of contracts with contractors that are debarred, suspended, or proposed for debarment unless the agency head makes a determination that there are compelling reasons for doing so (see the November 4, 2002, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Debarment and Suspension -- Order Placement and Option Exercise").

Comments were received from two respondents. Because of the comments, the final rule addresses blanket purchase agreements (BPAs) and basic ordering agreements (BOAs) because, though BPAs and BOAs are agreements and not contracts, they should contain the basic clauses that will apply to orders placed under them. Therefore, the revised FAR 9.405-1(b) now states, "For contractors debarred, suspended, or proposed for debarment, unless the agency head makes a written determination of the compelling reasons for doing so, ordering activities shall not (1) place orders exceeding the guaranteed minimum under indefinite quantity contracts; (2) place orders under optional use Federal Supply Schedule contracts, blanket purchase agreements, or basic ordering agreements; or (3) add new work, exercise options, or otherwise extend the duration of current contracts or orders."

(6) Insurance and Pension Costs: This final rule amends paragraph (j) of FAR 31.205-6, Compensation for Personal Services (the portion that addresses pension costs), and FAR 31.205-19, Insurance and indemnification, to clarify the cost principles involved and reflect current policy. The introduction to the rule states, "The revisions are intended to revise contract cost principles and procedures, in light of the evolution of Generally Accepted Accounting Principles (GAAP), the advent of acquisition reform, and experience gained from implementation pertaining to contract cost principles and procedures."

On January 30, 2003, a proposed rule was published, and four respondents submitted comments (for more on the proposed rule, see the January 30, 2003, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Insurance and Pension Costs." As a result of the comments, the proposed rule is finalized with additional clarifications.

(7) Debriefing -- Competitive Acquisition: This final rule amends FAR 52.212-1, Instruction to Offerors -- Commercial Items, and FAR 52.215-1, Instructions to Offerors -- Competitive Acquisition, to add requirements for debriefing unsuccessful offerors under competitive proposals.

Sections 1014 and 1064 of the Federal Acquisition Streamlining Act of 1994 include requirements for debriefing unsuccessful offerors under competitive proposals. Some, but not all, of the requirements were incorporated into FAR 52.215-1 (left out were the requirements to: disclose the agency's evaluation of the significant weak or deficient factors in the debriefed offeror's offer; provide reasonable responses to relevant questions; disclose unit price information; and provide past performance information). In addition, the entire subject of debriefings was inadvertently omitted during the drafting of FAR 52.212-1, Instruction to Offerors -- Commercial Items.

On February 4, 2003, a proposed rule was published to include the omitted text (except for "unit price information" -- see "EDITOR'S NOTE" below) to the two clauses (see the February 4, 2003, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Debriefing -- Competitive Acquisition"). Two respondents submitted comments, but it was decided to finalize the proposed rule without changes.

EDITOR'S NOTE: "Unit price information" was intentionally omitted from the proposed rule and the resulting final rule because recent court cases, especially MCI WorldCom v. GSA (163 F. Supp. 2d 28), have put the treatment of unit prices under exemption number 4 of the Freedom of Information Act (5 U.S.C. 552(b)(3)) (FOIA) in a state of flux, and this may necessitate the revision of FAR 15.506, Postaward Debriefing of Offerors, and paragraph (b)(1)(iv) of FAR 15.503, Notifications to Unsuccessful Offerors, to clarify the release of unit prices.

(8) Technical Amendments: The following technical amendments are made:

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2003 by Panoptic Enterprises. All Rights Reserved.

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