[Federal Register: July 26, 2000 (Volume 65, Number 144)]
[Rules and Regulations]               
[Page 46068-46069]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]





48 CFR Parts 12 and 52

[FAC 97-19; FAR Case 1998-605; Item IV]
RIN 9000-AI36

Federal Acquisition Regulation; Service Contract Act, Commercial 
Item Subcontracts

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

ACTION: Final rule.


SUMMARY: The Federal Acquisition Streamlining Act of 1994 (FASA) 
required the Federal Acquisition Regulatory Council (FAR Council) to 
include a list of laws that are inapplicable to subcontracts for the 
procurement of commercial items in the Federal Acquisition Regulation 
(FAR). The list was implemented and included the Service Contract Act 
(SCA). The FAR Council has reconsidered this issue and is removing the 
SCA from the list of laws inapplicable to subcontracts for commercial 

EFFECTIVE DATE: August 25, 2000.

Building, Washington, DC 20405, (202) 501-4755, for information 
pertaining to status or publication schedules. For clarification of 
content, contact Ms. Linda Klein at (202) 501-3775. Please cite FAC 97-
19, FAR case 1998-605.


A. Background

    Section 8003(b) of FASA required the FAR Council to include in the 
FAR a list of existing provisions of law that are inapplicable to 
subcontracts for commercial items. FASA defined those laws to be any 
provision of law, as determined by the FAR Council, that sets forth 
policies, provisions, requirements, or restrictions for the procurement 
of property or services, except those that provided for criminal or 
civil penalties or were specifically by law made applicable to 
contracts for the procurement of commercial items. In implementing this 
section of FASA, the FAR Council included the SCA on the list of laws 
inapplicable to commercial subcontracts in the final FAR rule (60 FR 
48231, September 18, 1995).
    In the period since publication of the FAR rule, the FAR Council, 
in consultation with the Department of Labor (DoL), has concluded that 
it is not in the best interest of the Government to retain the SCA on 
the list of laws that are inapplicable to all subcontracts for 
commercial items. The FAR Council agrees that any exemption from the 
coverage of the SCA for subcontracts for the acquisition of commercial 
items or components should be accomplished under the Secretary of 
Labor's authority in the SCA.
    The FAR Council has forwarded recommendations to the Secretary of 
Labor for consideration in formulating a proposed rule regarding 
exemptions from coverage under the SCA for commercial items. When the 
proposal is finalized, DoL will publish the proposed rule, to be issued 
under the Secretary's authority, in the Federal Register for public 
comment. Following the completion of that rulemaking, the FAR will be 
amended accordingly.
    With respect to other labor laws, the Walsh-Healey Act and the 
certification and contract clause requirements of the Contract Work 
Hours and Safety Standards Act were made inapplicable to commercial 
item contracts by the September 18, 1995, FAR final rule referenced 
above. However, the Walsh-Healey Act and the Contract Work Hours and 
Safety Standards Act provide statutory exemptions for purchases in the 
open market. The listing of these statutes in the FAR with respect to 
their inapplicability to commercial item contracts was designed to 
reflect the existing statutory open market exemptions.
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule is 
not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    The final rule does not constitute a significant FAR revision 
within the meaning of FAR 1.501 and Public Law 98-577, and publication 
for public comments is not required. However, the Councils will 
consider comments from small entities concerning the affected FAR parts 
12 and 52 in accordance with 5 U.S.C. 610. Interested parties must 
submit such comments separately and should cite 5 U.S.C. 601, et seq. 
(FAC 97-19, FAR case 1998-605), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose information collection requirements that 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 12 and 52

    Government procurement.

    Dated: July 19, 2000.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
    Therefore, 48 CFR parts 12 and 52 are amended as set forth below:

    1. The authority citation for 48 CFR parts 12 and 52 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).

[[Page 46069]]


12.504  [Amended]

    2. Amend section 12.504 by removing paragraph (a)(7) and 
redesignating paragraphs (a)(8) through (a)(12) as (a)(7) through 
(a)(11), respectively.


    3. Amend section 52.212-5 by revising the clause date to read 
``(AUG 2000)''; in paragraph (e)(3) by removing ``and''; in paragraph 
(e)(4) by removing the period at the end and adding ``; and''; and by 
adding paragraph (e)(5) to read as follows:

52.212-5  Contract Terms and Conditions Required to Implement Statutes 
or Executive Orders--Commercial Items.

* * * * *
    (e) * * *
    (5) 52.222-41, Service Contract Act of 1965, As Amended (41 U.S.C. 
351, et seq.).
* * * * *
[FR Doc. 00-18671 Filed 7-25-00; 8:45 am]