[Federal Register: October 22, 2001 (Volume 66, Number 204)]
[Rules and Regulations]               
[Page 53477-53479]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[[Page 53477]]


Part II

Department of Defense

General Services Administration

National Aeronautics and Space Administration


48 CFR Chapter 1, et al.

Federal Acquisition Regulations (FAR); Final Rules

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48 CFR Chapter 1

Federal Acquisition Circular 2001-01; Introduction

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

ACTION: Summary presentation of final and interim rules.


SUMMARY: This document summarizes the Federal Acquisition Regulation 
(FAR) rules agreed to by the Civilian Agency Acquisition Council and 
the Defense Acquisition Regulations Council in this Federal Acquisition 
Circular (FAC) 2001-01. A companion document, the Small Entity 
Compliance Guide (SECG), follows this FAC. The FAC, including the SECG, 
is available via the Internet at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.arnet.gov/far.

DATES: For effective dates and comment dates, see separate documents 
which follow.

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 2001-01 and 
specific FAR case number(s). Interested parties may also visit our Web 
site at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.arnet.gov/far.

   Item                 Subject               FAR case       Analyst
I           Application of the Davis-Bacon     1997-613  Nelson.
             Act to Construction Contracts
             With Options to Extend the
             Term of the Contract.
II          Acquisition of Commercial          2000-303  Moss.
III         Prompt Payment Under Cost-         2000-308  Olson.
             Reimbursement Contracts for
             Services (Interim).
IV          Veterans' Employment..........     1998-614  Nelson.
V           Veterans Entrepreneurship and      2000-302  Cundiff.
             Small Business Development
             Act of 1999 (Interim).
VI          Very Small Business Pilot          2001-001  Cundiff.

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 2001-01 amends the FAR as specified 

Item I--Application of the Davis-Bacon Act to Construction 
Contracts With Options To Extend the Term of the Contract

[FAR Case 1997-613]

    This final rule implements the Department of Labor's requirement to 
incorporate a current Davis-Bacon Act wage determination at the 
exercise of each option to extend the term of a contract for 

Item II--Acquisition of Commercial Items

[FAR Case 2000-303]

    This final rule amends the FAR to clarify the definition of 
``commercial item.'' The revised language will help contracting 
officers make commerciality determinations. The rule also alerts 
contracting officers to be aware of customary commercial terms and 
conditions that may affect the contract price when pricing commercial 
items. The rule also clarifies that Subpart 46.8, Contractor Liability 
for Loss of or Damage to Property of the Government, does not apply to 
acquisitions of commercial items. Contracting officers should use 
standard commercial practices instead of the policies in Subpart 46.8. 
Finally, the rule amends the clause at 52.212-4, Limitation of 
liability, to conform it to standard commercial practice.

Item III--Prompt Payment Under Cost-Reimbursement Contracts for 

[FAR Case 2000-308]

    This interim rule implements changes in the Office of Management 
and Budget's (OMB) Prompt Payment Act regulations at 5 CFR 1315 that 
implemented Section 1010 of the National Defense Authorization Act for 
Fiscal Year 2001. Those changes were published by OMB as an interim 
final rule and became effective on December 15, 2000 (65 FR 78403) and 
were applicable to all covered contracts awarded on or after December 
15, 2000. Section 1010 of the National Defense Authorization Act for 
Fiscal Year 2001 requires agencies to pay an interest penalty, in 
accordance with regulations issued, whenever an interim payment under a 
cost-reimbursement contract for services is paid more than 30 days 
after the agency receives a proper invoice from a contractor. The Act 
does not permit payment of late payment penalty interest for any period 
prior to December 15, 2000.
    This FAR amendment eliminates the prior policy and contract clause 
prohibitions on payment of late payment penalty interest for late 
interim finance payments under cost-reimbursement contracts for 
services. It adds new policy and contract clause coverage to provide 
for those penalty payments.

Item IV--Veterans' Employment

[FAR Case 1998-614]

    This final rule amends the FAR to implement statutory and 
regulatory changes relating to veterans' employment opportunities and 
reporting. Most significantly for contracting officers, the rule amends 
the FAR to prohibit contracting officers from obligating or expending 
appropriated funds to enter into a contract with a contractor that has 
not met its veterans' employment reporting requirements (VETS-100 
Report). This prohibition does not apply to contracts for commercial 
items or contracts valued at or below the simplified acquisition 
threshold. The rule adds a new solicitation provision that requires 
each offeror to represent, by submission of its offer, that it is in 
compliance with the VETS-100 reporting requirements. The contracting 
officer may verify compliance by checking with the Department of Labor.

Item V--Veterans Entrepreneurship and Small Business Development 
Act of 1999

[FAR Case 2000-302]

    This interim rule amends the FAR to implement section 803 of the 
Small Business Reauthorization Act of 2000, part of the Consolidated 
Appropriations Act, 2001 (Pub. L. 106-554) that was enacted on December 
21, 2000.
    This rule requires a contractor that is required to submit a 
subcontracting plan to report as a separate subcontracting plan goal 
requirement, subcontracting

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activity pertaining to service-disabled veteran-owned small business 
concerns. The rule also changes the Standard Form (SF) 294, 
``Subcontracting Report for Individual Contracts,'' and the SF 295, 
``Summary Subcontract Report,'' to capture this category of information 
for the contracting officer.

Item VI--Very Small Business Pilot Program

[FAR Case 2001-001]

    This final rule amends FAR Subpart 19.9 to implement Section 503(c) 
of the Small Business Reauthorization Act of 2000 (part of Public Law 
106-554). Section 503(c) extends, for three additional years, the Very 
Small Business Pilot Program until September 30, 2003. The purpose of 
the program is to improve access to Government contract opportunities 
for concerns that are substantially below SBA's size standards by 
reserving certain acquisitions for competition among such concerns.

    Dated: October 12, 2001.
Al Matera,
Director, Acquisition Policy Division.

Federal Acquisition Circular

    Federal Acquisition Circular (FAC) 2001-01 is issued under the 
authority of the Secretary of Defense, the Administrator of General 
Services, and the Administrator for the National Aeronautics and Space 
    Unless otherwise specified, all Federal Acquisition Regulation 
(FAR) and other directive material contained in FAC 2001-01 is 
effective December 21, 2001, except for Items III and V, which are 
effective October 22, 2001.

Dated: August 31, 2001.

Carolyn M. Balven,
Acting Director, Defense Procurement.

Dated: August 28, 2001.

David A. Drabkin,
Deputy Associate Administrator, Office of Acquisition Policy, 
General Services Administration.

Dated: August 27, 2001.

Anne Guenther,
Acting Associate Administrator for Procurement, National Aeronautics 
and Space Administration.

[FR Doc. 01-26295 Filed 10-19-01; 8:45 am]