[Federal Register: July 27, 2005 (Volume 70, Number 143)]
[Rules and Regulations]               
[Page 43575-43577]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[[Page 43575]]


Part IV

Department of Defense

General Services Administration

National Aeronautics and Space Administration


48 CFR Chapter 1, Parts 2, 4, 8, 14, et al.

Federal Acquisition Regulations; Interim Rules and Final Rules

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48 CFR Chapter 1

Federal Acquisition Circular 2005-05; Introduction

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

ACTION: Summary presentation of interim and final 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) 2005-05. 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.acqnet.gov/far.

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

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, at (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 2005-05 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.acqnet.gov/far.

      Item                          Subject                             FAR case                 Analyst
I..............  Definition of Information Technology           2004-030                 Davis.
II.............  Documentation Requirement for Limited Sources  2005-004                 Nelson.
                  under Federal Supply Schedules.
III............  Payment Withholding..........................  2004-003                 Olson.
IV.............  Confirmation of HUBZone Certification          2005-009                 Cundiff.
V..............  Government Property Rental and Special         2002-015                 Parnell.
VI.............  Technical Amendment..........................

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.
    FAC 2005-05 amends the FAR as specified below:

Item I--Definition of Information Technology (FAR Case 2004-030)

    This interim rule amends FAR 2.101(b) to revise the definition of 
``information technology'' to reflect the recent changes to the 
definition resulting from the enactment of Public Law 108-199.
    The new language at Section 535(b) of Division F of Public law 108-
199 permanently revises the term ``information technology,'' which is 
defined at 40 U.S.C. 11101, to add ``analysis'' and ``evaluation'' and 
to clarify the term ``ancillary equipment.'' This permanent change to 
the terminology necessitated this interim rule to amend the FAR.

Item II--Documentation Requirement for Limited Sources under Federal 
Supply Schedules (FAR Case 2005-004)

    On June 18, 2004, DoD, GSA, and NASA published FAR case 1999-603 
(69 FR 34231) amending the FAR to incorporate ordering procedures for 
orders against Federal Supply Schedules (FSS), including the 
documentation requirements for justifying sole source orders. The rule 
inadvertently established these justification and approval requirements 
for sole source orders instead of when an ordering activity restricts 
consideration of schedule contractors to less than the required number. 
This rule corrects that oversight. The final rule also based the 
content of the documentation requirements on that in FAR 6.303-2. By 
doing so, the rule established some unintentional and inapplicable 
content requirements, especially for orders under the simplified 
acquisition threshold (SAT). This rule corrects those unintended 
changes by establishing the standard for justifying restricted orders 
under the SAT and accurately specifying the justification content for 
restricted orders above the SAT. The rule will clarify the procedures 
for ordering activities.

Item III--Payment Withholding (FAR Case 2004-003)

    Contracting officers and contracting officer's representatives who 
award or administer Time-and-Materials or Labor-Hour contracts or 
orders should be familiar with this amendment. Also, contractor 
personnel who are responsible for managing invoicing for those types of 
contracts should be aware of this new requirement. The amendment 
removes the mandatory requirement that a contracting officer withhold 5 
percent of the payments due under a time-and-materials contract, unless 
it is necessary to withhold payment to protect the Government's 
interest or otherwise prescribed in the contract Schedule. It requires 
the use of a contract modification in order to make payment withholding 
and, in the event withholding is required, the contractor is 
responsible to withhold the amounts from its billings.

Item IV--Confirmation of HUBZone Certification (FAR Case 2005-009)

    This interim rule amends FAR 19.703 and the clause at 52.219-9 to 
clarify that prime contractors must confirm that a subcontractor 
representing itself as a Historically Underutilized Business Zone 
(HUBZone) small business concern is certified, consistent with the 
requirements of 15 U.S.C. 632 et seq., as amended. This change is 
expected to increase subcontracting opportunities for certified HUBZone 
small business concerns and ensure accurate reporting of awards to 
HUBZone small business concerns under Government contracts.

Item V--Government Property Rental and Special Tooling (FAR Case 2002-

    This final rule amends FAR Parts 45 and 52 to clarify the basis for 
determining rental charges for the use of Government property. The 
change, which is intended to promote the dual use of such property, 
will impact contracting officers and property administrators 
responsible for the management of Government property and contractors 
that desire to use Government property for commercial purposes.

Item VI--Technical Amendment

    An editorial change is made at FAR 4.1102 in order to update a 

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    Dated: July 20, 2005.
Julia B. Wise,
Director, Contract Policy Division.

Federal Acquisition Circular

    Federal Acquisition Circular (FAC) 2005-05 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 2005-05 is 
effective August 26, 2005, except for Items I, II, IV, and VI which are 
effective July 27, 2005.

    Dated: July 15, 2005.
Deidre A. Lee,
Director, Defense Procurement and Acquisition Policy.

    Dated: July 19, 2005.
Patricia A. Brooks,
Acting Senior Procurement Executive, Office of the Chief Acquisition 
Officer, General Services Administration.

    Dated: July 14, 2005.
Tom Luedtke,
Assistant Administrator for Procurement, National Aeronautics and Space 
[FR Doc. 05-14665 Filed 7-26-05; 8:45 am]