[Federal Register: September 28, 2006 (Volume 71, Number 188)] [Rules and Regulations] [Page 57360-57362] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr28se06-23] ----------------------------------------------------------------------- DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 1, 2, 7, 11, 31, and 39 [FAC 2005-13; FAR Case 2004-018; Item II; Docket 2006-0020, Sequence 16] RIN 9000-AK29 Federal Acquisition Regulation; FAR Case 2004-018, Information Technology Security AGENCIES: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) have agreed to adopt as final without change, the interim rule amending the Federal Acquisition Regulation (FAR) to implement the Information Technology (IT) Security provisions of the Federal Information Security Management Act of 2002 (FISMA) (Title III of Public Law 107-347, the E-Government Act of 2002 (E-Gov Act)). DATES: Effective Date: September 28, 2006. FOR FURTHER INFORMATION CONTACT: For clarification of content, contact Ms. Cecelia Davis, Procurement Analyst, at (202) 219-0202. Please cite FAC 2005-13, FAR case 2004-018. For information pertaining to status or publication schedules, contact the FAR Secretariat at (202) 501-4755. SUPPLEMENTARY INFORMATION: A. Background DoD, GSA, and NASA published an interim rule in the Federal Register at 70 FR 57449, September 30, 2005 to implement the Information Technology (IT) Security provisions of the Federal Information Security Management Act of 2002 (FISMA) (Title III of Public Law 107-347, the E-Government Act of 2002 (E-Gov Act)). There was a correction published in the Federal Register at 70 FR 69100, November 14, 2005, deleting the definition at FAR 2.101 of [[Page 57361]] ``Sensitive But Unclassified (SBU) information.'' The Councils received five public comments in response to the interim rule. A discussion of the comments is provided below: One commenter stated ``no comment'' in response to the data call. The remaining comments are shown below with the response. Comment: Two commenters disagreed with the term ``Sensitive But Unclassified (SBU) Information''. The commenters stated that SBU is defined but not found in the text of the interim rule. The commenters recommended deleting the term SBU or adding the language to support the definition. Response: A technical amendment was published on November 14, 2005 to delete the SBU terminology from the definition. The councils have, therefore, excluded the term from the final rule. Comment: One commenter requested including revisions to FAR 52.239- 1(b) to the interim rule to include a specific reference to ``security programs under FISMA''. Response: Paragraph (b) of the FAR clause at 52.239-1 includes a broad reference to programs, including security, which includes FISMA. Therefore, the councils do not concur with adding a specific reference for programs under FISMA. Comment: One commenter stated the new FAR regulation is stimulating interest among the suppliers looking to maximize their security offerings and data center offerings. A major issue is the lack of recognition of a simple process that can be adopted by all agencies to allow suppliers to leverage their facility and personnel clearances across multiple Federal agencies. Another major issue is that the FAR regulation inhibits those still struggling to obtain or be sponsored for clearances. The commenter stated that the winners are those who have clearance today and this may stifle acquisition competition. Response: Adding requirements to sponsor companies for clearances is outside the scope of this rule. The commenter should express the concern to agencies responsible for adjudicating clearances. Comment: One commenter stated that it is essential that in implementing information security requirements for contractors, each agency strive for an approach that leverages its contractors' existing policies and practices and is also consistent with the approach of other Federal agencies. The commenter stated that agency policy makers should be mindful of recent steps taken in private industry, and should seek to leverage the additional security measures many companies have already adopted by allowing those measures to be a foundation for ensuring the protection of non-public agency information that a contractor may possess or control. The commenter recommended that FAR 39.101(d) be revised to read as follows: ``(d) In acquiring information technology, agencies shall include the appropriate information technology security policies and requirements. The security policies and requirements included by agencies shall (i) be consistent with applicable guidelines provided by the Commerce Department's National Institute of Standards and Technology, and (ii) to the maximum practicable extent, accommodate contractors' existing policies and practices for preventing the unauthorized access or disclosure of non-public information.'' Response: FISMA requires agencies to follow National Institute of Standards and Technology (NIST) guidance, but it does not state agencies must collaborate to establish procedures. In Fiscal Year 2005, OMB worked with agencies to determine whether there is unnecessary duplication of resources used to achieve common Governmentwide security requirements. The leveraging benefits were described in the FISMA 2004 Report to Congress by OMB dated March 1, 2005, which states that consolidation of commonly used information technology security process and technologies may reduce costs and increase security consistency and effectiveness across Government. The final rule requires agency planners to comply with the requirements in the Federal Information Security Management Act (44 U.S.C. 3544) in FAR 7.103(u), which includes evaluating private sector information security policies and practices, and this requirement does not need to be added to FAR 39.101. Furthermore, agencies are required to comply with the Federal Information Processing Standards Publications (FIPS PUBS), managed by NIST for IT standards and guidance in FAR 11.102. The Councils agreed to convert the interim rule to a final rule without change. 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 Regulatory Flexibility Act, 5 U.S.C. 601, et seq., applies to this final rule. The Councils prepared a Final Regulatory Flexibility Analysis (FRFA), and it is summarized as follows: This rule amends the Federal Acquisition Regulation to implement the information technology security provisions of the Federal Information Security Management Act of 2002 (FISMA), (Title III of Public Law 107-347, the E-Government Act of 2002 (E-Gov Act)). FISMA requires agencies to identify and provide information security protections commensurate with security risks to federal information collected or maintained for agency and information systems used or operated on behalf of an agency by a contractor. The Councils considered all of the comments in finalizing the rule. An Initial Regulatory Flexibility Analysis (IRFA) was performed. The Councils did not receive any public comments on this issue from small business concerns or other interested parties in response to the IRFA. As stated in the IRFA, the FAR rule will itself have no direct impact on small business concerns. FISMA requires that agencies establish IT security policies that are commensurate with agency risk and potential for harm and that meet certain minimum requirements. The real implementation of this will occur at the agency level. The impact on small entities will, therefore, be variable depending on the agency implementation. The bulk of the policy requirements for information security are expected to be issued as either change to agency supplements to the FAR or as internal IT policies promulgated by the agency Chief Information Officer (CIO), or equivalent, to assure compliance with agency security policies. These agency supplements and IT policies may affect small business concerns in terms of their ability to compete and win federal IT contracts. The extent of the effect and impact on small business concerns is unknown and will vary from agency to agency due to the wide variances among agency missions and functions. An interim rule was published in the Federal Register on September 30, 2005 (70 FR 57449), and a technical amendment was published in the Federal Register on November 14, 2005 (70 FR 69100). Five public comments were received in response to the interim rule. The public disagreed with the use of the term ``Sensitive But Unclassified (SBU) Information''. The technical amendment published on November 14, 2005, deleted the term from the final rule. This rule imposes no additional reporting, recordkeeping, or other compliance requirements for firms under this rule. There are no known significant alternatives that will accomplish the objectives of the rule. No alternatives were proposed during the public comment period. Interested parties may obtain a copy of the FRFA from the FAR Secretariat. The FAR Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration. 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. [[Page 57362]] List of Subjects in 48 CFR Parts 1, 2, 7, 11, 31, and 39 Government procurement. Dated: September 19, 2006. Ralph De Stefano, Director, Contract Policy Division. Interim Rule Adopted as Final Without Change 0 Accordingly, the interim rule amending 48 CFR parts 1, 2, 7, 11, 31, and 39, which was published at 70 FR 57449, September 30, 2005, and a correction published at 70 FR 69100, November 14, 2005, is adopted as a final rule without change. [FR Doc. 06-8201 Filed 9-27-06; 8:45 am] BILLING CODE 6820-EP-S [Federal Register: September 28, 2006 (Volume 71, Number 188)] [Rules and Regulations] [Page 57363-57374] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr28se06-25] ----------------------------------------------------------------------- DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 1, 2, 4, 5, 6, 7, 8, 9, 12, 13, 15, 16, 17, 19, 22, 25, 28, 32, 36, 42, 48, 49, 50, 52, and 53 [FAC 2005-13; FAR Case 2004-033; Item IV; Docket 2006-0020, Sequence 17] RIN 9000-AK26 Federal Acquisition Regulation; FAR Case 2004-033, Inflation Adjustment of Acquisition-Related Thresholds AGENCIES: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) have agreed on a final rule amending the Federal Acquisition Regulation (FAR) to adjust acquisition-related thresholds for inflation, in accordance with 41 U.S.C. 431a as added by section 807 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (Pub. L. 108-375). This rule also amends some acquisition-related thresholds that are based on policy rather than statute. Inflation adjustment of cost accounting standards (CAS) thresholds will be addressed in a separate case. DATES: Effective Date: September 28, 2006. FOR FURTHER INFORMATION CONTACT: For clarification of content, contact Mr. Michael Jackson, Procurement Analyst, at (202) 208-4949. Please cite FAC 2005-13, FAR case 2004-033. For information pertaining to status or publication schedules, contact the FAR Secretariat at (202) 501-4755. SUPPLEMENTARY INFORMATION: A. Background Statute. This final rule implements 41 U.S.C. 431a as added by Section 807 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (Pub. L. 108-375). 41 U.S.C. 431a provides for adjustment every 5 years of acquisition-related thresholds, except for Davis-Bacon Act, Service Contract Act, and trade agreements thresholds. This rule also escalates some nonstatutory acquisition-related thresholds. The statute does not permit escalation of acquisition- related thresholds established by the Davis Bacon Act, the Service Contract Act, or trade agreements. The statute does not authorize the FAR to escalate thresholds originating in executive order or the implementing agency (such as the Department of Labor or the Small Business Administration), unless the executive order or agency regulations are first amended. Public Comments. DoD, GSA, and NASA published a proposed rule in the Federal Register at 70 FR 73415, December 12, 2005. We received eight responses to the proposed rule (available at http://www.regulations.gov/ ). All the responses were from Government personnel. Almost all the responses related to the proposed increase in the micro-purchase threshold. The Councils did not agree to any changes to the proposed rule based on the public comments. However, as addressed below, some of the thresholds have changed in the final rule. [[Page 57364]] Concur with rule Comment: Two respondents concur with the rule without further comment. Response: None required. Micro-purchase threshold Comment: Increase is not enough. One respondent is concerned that the increase in the micro-purchase threshold is totally insufficient. Response: The statute dictates the amount of the inflation adjustment, specifying the index to be used, and only allows inflation for a five-year period for those statutes that were in effect before October 1, 2000. Comment: Concern for impact on small business. One respondent expressed concerns over negative impact on small business. The respondent did not favor the pending increase in the micro-purchase threshold from $2,500 to $3,000 because there is not a simultaneous increase in the simplified acquisition threshold (SAT), thereby reducing the number of acquisitions automatically set aside for small business. The respondent proposed that the SAT should be raised at the same time as the increase in the micro-purchase threshold. Response: The Councils addressed this issue in the Federal Register notice and the Initial Regulatory Flexibility Analysis. The increase in the micro-purchase threshold is required by statute. The statute does not provide flexibility in its application to acquisition-related thresholds. The escalation in accordance with the procedures set forth in the statute is mandatory. Following these procedures resulted in an escalation of $500 at this time for the micro-purchase threshold, and no escalation for the SAT, because of rounding as required by the statute. However, it is expected that the SAT will increase in year 2010, increasing the range for small business set-asides. Discrepancy with Service Contract Act (SCA) is a problem Comment: Three respondents are concerned that an increase in the micro-purchase threshold to $3,000 while the SCA threshold remains at $2,500 creates problems. Problems cited include-- This discrepancy will result in increased risk of purchase card holders violating the SCA. Monitoring the different thresholds adds to the overburdened purchase card program which was supposed to be a simple process; The discrepancy poses a great burden on contracting as well as the credit card program and may have an adverse impact. The respondent understands that the statute prohibited increase in the SCA, but considers it logical to promote an initiative to amend the SCA to coincide with the micro-purchase threshold; and This discrepancy is inviting violation of the provisions of the SCA, because many, if not most, of these purchases are made by non-contracting personnel who have no knowledge of the provisions of the SCA. Response: As stated in the above response, the increase in the micro-purchase threshold is required by law, while the increase in the SCA threshold is prohibited by the law. Considering the specific prohibition of any increase in the SCA, the Councils consider it highly unlikely that any initiative to amend the SCA would meet with success. The Councils have limited use of the purchase card for services valued in excess of $2,500 that are subject to the Service Contract Act, by adding a restriction to the definition of ``Micro-purchase threshold'' at FAR 2.101, so that it remains at $2,500 for services subject to the Service Contract Act. The Councils also recommend training for cardholders so that they will be able to identify which service contracts are subject to the Act. Increase the Davis-Bacon Act threshold Comment: One respondent recommended increase in the Davis-Bacon Act threshold. Response: The statute specifically excludes the Davis-Bacon Act from any adjustment. Increase the third party draft transaction threshold Comment: One respondent recommends that, unless Treasury restrictions take precedence over FAR changes, this $2,500 threshold at FAR 13.305-3(b) also be raised to $3,000, consistent with other changes to the micro-purchase threshold in the proposed rule. Response: The Treasury restrictions do take precedence. The statute does not authorize the FAR to escalate non-statutory thresholds originating in another agency unless the agency regulations are first amended. Escalation. The inflation adjustment factors in the proposed rule were calculated on the basis of December 2004 data. For the final rule, data through October 2005 has been used. This resulted in a slight increase in the calculated inflation adjustment factors. For the five- year period October 2000 through October 2005, the inflation adjustment factor increased from 13 to 14.5 percent. However, due to rounding, most thresholds in the proposed rule did not actually change. The following frequently used thresholds are the same in the final rule as in the proposed rule: Micro-purchase threshold at FAR 2.101: ``$3,000''. FPDS reporting threshold at FAR 4.602(c): ``$3,000''. Commercial Items test program ceiling at FAR 13.500: ``$5,500,000''. Prime contractor subcontracting plan floor at FAR 19.702: ``$550,000'' (but for construction ($1,000,000) is unchanged). The following thresholds further increased from the proposed to the final rule: Major system (DoD) at FAR 2.101: ``$173,500,000 and $814,500,000''. J&A approval levels at FAR 6.304, 8.405-6, 13.501: ``$57,000,000 and $78,500,000''. Bundling at FAR 7.107: ``$86,000,000 and $8,600,000''. Treatment as a commercial item at FAR 12.102, 12.203, 13.000, 13.303-5, 13.500, 15.403-1(c)(3)(i): ``$11,000,000, $16,000,000, and $27,000,000''. TINA cost and pricing data at FAR 15.403, 15.403-4, 42.7: ``$650,000''. Multiyear cancellation ceiling notice to Congress, DoD at FAR 17.108(b): ``$114,500,000''. The threshold of $5 million at FAR 19.1406(a)(2)(i) is the only threshold in the matrix of FAR thresholds that was not included in the text of the proposed rule, but is now included in the final rule, because the calculated threshold now rounds up to $5.5 million. A matrix of the thresholds considered in the drafting of the final rule is available via the Internet at http://acquisition.gov/far/facsframe.html . Right to Petition The Councils note that the statute provides the right to petition. If a dollar threshold adjustable under the statute is not included in this notice of adjustment, any person may request adjustment of that dollar threshold by submitting a petition for adjustment to the Administrator for Federal Procurement Policy. Please note, however, that due to rounding requirements, many thresholds that were considered for adjustment were not actually changed at this time because the inflation was insufficient to overcome the rounding requirements (e.g., thresholds of $1,000, $10,000, $100,000, and $1,000,000). These thresholds will probably be adjusted in year 2010, if inflation continues at a rate comparable to the current rate of inflation. This is not a significant regulatory action and, therefore, was not subject to [[Page 57365]] 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 Regulatory Flexibility Act, 5 U.S.C. 601, et seq., applies to this final rule. The Councils prepared a Final Regulatory Flexibility Analysis (FRFA), and it is summarized as follows: Most of the threshold changes proposed in this rule will not have any significant economic impact on small business because they are intended to maintain the status quo by adjusting for changes in the value of the dollar. For example, the prime contractor subcontracting plan floor at FAR 19.702 for other than construction contacts will be raised from $500,000 to $550,000. This is just keeping pace with inflation. Often any impact will be beneficial by preventing burdensome requirements from applying to more and more small dollar value acquisitions, which are the acquisitions in which small businesses are most likely to participate. One respondent was specifically concerned about the impact on the small business community of the increase in the micro-purchase threshold without a corresponding increase in the simplified acquisition threshold, thereby temporarily narrowing the range of automatic set-asides for small business. To assess the impact of the increase in the micro-purchase threshold from $2,500 to $3,000, data was requested from FPDS-NG. For Fiscal Year 2004, actions between $2,500 and $3,000, there is a total of 25,212 contract actions with a value of $13,732,445. Of this total, 16,031 (value of $8,083,900) of these actions went to small businesses. We expect that many of these awards will still go to small businesses, even if there is no longer a requirement to automatically set the procurement aside for small business. The simplified acquisition threshold is expected to increase by a much greater amount five years from now when the thresholds are next adjusted, thereby increasing the range of automatic set-asides for small business. The Councils did not make any changes in the final rule as a result of these comments, because the increases are dictated by statute. Interested parties may obtain a copy from the FAR Secretariat. The FAR Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration. C. Paperwork Reduction Act The Paperwork Reduction Act does apply; however, these changes to the FAR do not impose additional information collection requirements to the paperwork burden previously approved under OMB Control Numbers 9000-0006, 9000-0007, 9000-0013, 9000-0026, 9000-0027, 9000-0028, 9000- 0029, 9000-0037, 9000-0043, 9000-0045, 9000-0065, 9000-0066, 9000-0070, 9000-0078, 9000-0094, 9000-0115, 9000-0138, 9000-0145, 9000-0150, and 1215-0072. They maintain the current information collection requirements at the status quo by adjusting the thresholds for inflation. List of Subjects in 48 CFR Parts 1, 2, 4, 5, 6, 7, 8, 9, 12, 13, 15, 16, 17, 19, 22, 25, 28, 32, 36, 42, 48, 49, 50, 52, and 53 Government procurement. Dated: September 19, 2006. Ralph De Stefano, Director, Contract Policy Division. 0 Therefore, DoD, GSA, and NASA amend 48 CFR parts 1, 2, 4, 5, 6, 7, 8, 9, 12, 13, 15, 16, 17, 19, 22, 25, 28, 32, 36, 42, 48, 49, 50, 52, and 53 as set forth below: 0 1. The authority citation for 48 CFR parts 1, 2, 4, 5, 6, 7, 8, 9, 12, 13, 15, 16, 17, 19, 22, 25, 28, 32, 36, 42, 48, 49, 50, 52, and 53 continues to read as follows: Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c). PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM 0 2. Add section 1.109 to read as follows: 1.109 Statutory acquisition-related dollar thresholds--adjustment for inflation. (a) 41 U.S.C. 431a requires that the FAR Council periodically adjust all statutory acquisition-related dollar thresholds in the FAR for inflation, except as provided in paragraph (c) of this section. This adjustment is calculated every 5 years, starting in October 2005, using the Consumer Price Index (CPI) for all-urban consumers, and supersedes the applicability of any other provision of law that provides for the adjustment of such acquisition-related dollar thresholds. (b) The statute defines an acquisition-related dollar threshold as a dollar threshold that is specified in law as a factor in defining the scope of the applicability of a policy, procedure, requirement, or restriction provided in that law to the procurement of supplies or services by an executive agency, as determined by the FAR Council. (c) The statute does not permit escalation of acquisition-related dollar thresholds established by the Davis-Bacon Act (40 U.S.C. 3141 through 3144, 3146, and 3147), the Service Contract Act of 1965 (41 U.S.C. 351, et seq.), or the United States Trade Representative pursuant to the authority of the Trade Agreements Act of 1979 (19 U.S.C. 2511 et seq). (d) A matrix showing calculation of the most recent escalation adjustments of statutory acquisition-related dollar thresholds is available via the Internet at http://acquisition.gov/far/facsframe.html . PART 2--DEFINITIONS OF WORDS AND TERMS 0 3. Amend section 2.101 in paragraph (b) by-- 0 a. Revising paragraph (1) of the definition ``Major system'', and removing from paragraph (2) ``$750,000 (based on fiscal year 1980 constant dollars)'' and adding ``$1.8 million'' in its place; and 0 b. Amending the definition ``Micro-purchase threshold'', by removing from the introductory paragraph ``2,500'' and adding ``3,000'' in its place; revising paragraph (1); redesignating paragraph (2) as paragraph (3); and adding a new paragraph (2). The revised text reads as follows: 2.101 Definitions. * * * * * (b) * * * Major system * * * (1) The Department of Defense is responsible for the system and the total expenditures for research, development, test, and evaluation for the system are estimated to be more than $173.5 million or the eventual total expenditure for the acquisition exceeds $814.5 million; * * * * * Micro-purchase threshold * * * (1) For acquisitions of construction subject to the Davis-Bacon Act, $2,000; (2) For acquisitions of services subject to the Service Contract Act, $2,500; and * * * * * PART 4--ADMINISTRATIVE MATTERS 4.601 [Amended] 0 4. Amend section 4.601 by removing from paragraph (a) and the introductory text of paragraph (d) ``$25,000'' and adding ``$3,000'' in their place; and by removing from paragraph (e) ``$5,000,000'' and adding ``$5.5 million'' in its place. 4.602 [Amended] 0 5. Amend section 4.602 by removing from paragraphs (c)(1) and (c)(3) ``$2,500'' and adding ``$3,000'' in their place; and by removing paragraph (c)(4). PART 5--PUBLICIZING CONTRACT ACTIONS 0 6. Amend section 5.303 by revising paragraph (a) to read as follows: [[Page 57366]] 5.303 Announcement of contract awards. (a) Public announcement. Contracting officers shall make information available on awards over $3.5 million (unless another dollar amount is specified in agency acquisition regulations) in sufficient time for the agency concerned to announce it by 5 p.m. Washington, DC, time on the day of award. Agencies shall not release information on awards before the public release time of 5 p.m. Washington, DC time. Contracts excluded from this reporting requirement include-- (1) Those placed with the Small Business Administration under section 8(a) of the Small Business Act; (2) Those placed with foreign firms when the place of delivery or performance is outside the United States and its outlying areas; and (3) Those for which synopsis was exempted under 5.202(a)(1). * * * * * PART 6--COMPETITION REQUIREMENTS 6.304 [Amended] 0 7. Amend section 6.304 by-- 0 a. Removing from paragraph (a)(1) ``$500,000'' and adding ``$550,000'' in its place; 0 b. Removing from paragraph (a)(2) ``$500,000'' and ``$10,000,000'' and adding ``$550,000'' and ``$11.5 million'', respectively, in their place; 0 c. Removing from paragraph (a)(3) $10,000,000'', ``$50,000,000'', and ``$75,000,000'' and adding ``$11.5 million'', ``$57 million'', and ``$78.5 million'', respectively, in their place; and 0 d. Removing from paragraph (a)(4) ``$50,000,000'' and ``75,000,000'' and adding ``$57 million'' and ``$78.5 million'', respectively, in their place. PART 7--ACQUISITION PLANNING 7.104 [Amended] 0 8. Amend section 7.104 by removing from paragraph (d)(2)(i)(A) ``$7 million'' and adding ``$7.5 million'' in its place; and removing from paragraph (d)(2)(i)(B) ``$5 million'' and adding ``$5.5 million'' in its place. 7.107 [Amended] 0 9. Amend section 7.107 by removing from paragraph (b)(1) ``$75 million'' and adding ``$86 million'' in its place; and removing from paragraph (b)(2) ``$7.5 million'' and ``75 million'' and adding ``$8.6 million'' and ``$86 million'', respectively, in their place. PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES 8.405-6 [Amended] 0 10. Amend section 8.405-6 by-- 0 a. Removing from paragraph (h)(1) ``$500,000'' and adding ``$550,000'' in its place; 0 b. Removing from paragraph (h)(2) ``$500,000, but not exceeding $10 million'' and adding ``$550,000, but not exceeding $11.5 million'' in its place; 0 c. Removing from the introductory text of paragraph (h)(3) ``$10 million'', ``$50 million'', and ``$75 million'', and adding ``$11.5 million'', ``$57 million'', and ``$78.5 million'', respectively, in their place; and 0 d. Removing from the first sentence of paragraph (h)(4) ``$50 million'' and ``$75 million'' and adding ``$57 million'' and ``$78.5 million'', respectively, in their place. PART 9--CONTRACTOR QUALIFICATIONS 9.405-2 [Amended] 0 11. Amend section 9.405-2 in the second sentence of the introductory text of paragraph (b) by removing ``$25,000'' and adding ``$30,000'' in its place. 9.409 [Amended] 0 12. Amend section 9.409 in paragraph (b) by removing ``$25,000'' and adding ``$30,000'' in its place. PART 12--ACQUISITION OF COMMERCIAL ITEMS 12.102 [Amended] 0 13. Amend section 12.102 by removing from the introductory text of paragraph (f)(2) ``$15,000,000'' and adding ``$16 million'' in its place; and removing from paragraph (g)(1)(ii) ``$25 million'' and adding ``$27 million'' in its place. 12.203 [Amended] 0 14. Amend section 12.203 by removing from the last sentence ``$5 million'' and ``$10 million'' and adding ``$5.5 million'' and ``$11 million'', respectively, in their place. PART 13--SIMPLIFIED ACQUISITION PROCEDURES 13.000 [Amended] 0 15. Amend section 13.000 by removing from the second sentence ``$5 million'' and ``$10 million'' and adding ``$5.5 million'' and ``$11 million'', respectively, in their place. 13.003 [Amended] 0 16. Amend section 13.003 by-- 0 a. Removing from the first sentence of paragraph (b)(1) ``$2,500'' and adding ``$3,000'' in its place; and in the second sentence, by adding ``19.000(b) and'' after the word ``See''; and 0 b. Removing from paragraphs (c)(1)(ii) and (g)(2) ``$5 million'' and ``$10 million'' and adding ``$5.5 million'' and ``$11 million'', respectively, in their place. 13.005 [Amended] 0 17. Amend section 13.005 in paragraph (a)(2) by removing ``$25,000'' and adding ``$30,000 (40 U.S.C. 3132)'' in its place. 13.106-1 [Amended] 0 18. Amend section 13.106-1 by removing from paragraph (c)(2) and the first sentence of paragraph (d) ``$25,000'' and adding ``$30,000'' in their place. 13.303-5 [Amended] 0 19. Amend section 13.303-5 by removing from paragraph (b)(1) ``$5,000,000'' and ``$10,000,000'' and adding ``$5.5 million'' and ``$11 million'', respectively, in their place; and removing from paragraph (b)(2) ``$5 million'' and ``$10 million'' and adding ``$5.5 million'' and ``$11 million'', respectively, in their place. 13.402 [Amended] 0 20. Amend section 13.402 by removing from paragraph (a) ``$25,000'' and adding ``30,000'' in its place. 13.500 [Amended] 0 21. Amend section 13.500 by removing from the first sentence of paragraph (a) ``$5 million ($10 million'' and adding ``$5.5 million ($11 million'', respectively, in its place; and removing from the introductory text of paragraph (e) ``$10 million'' and adding ``$11 million'', respectively, in its place. 13.501 [Amended] 0 22. Amend section 13.501 by removing from paragraph (a)(2)(i) ``$500,000'' and adding ``$550,000'' in its place; removing from paragraph (a)(2)(ii) ``$500,000'' and ``$10,000,000'' and adding ``$550,000'' and ``$11.5 million''; respectively, in their place; removing from paragraph (a)(2)(iii) ``10,000,000'', ``50,000,000'', and ``75,000,000'' and adding ``11.5 million'', ``57 million'', and ``78.5 million'', respectively, in their place; and removing from paragraph (a)(2)(iv) ``50,000,000'' and ``75,000,000'' and adding ``57 million'', and ``78.5 million'', in its place. PART 15--CONTRACTING BY NEGOTIATION 0 23. Amend section 15.304 by removing paragraph (c)(3)(i); [[Page 57367]] redesignating paragraphs (c)(3)(ii), (c)(3)(iii), and (c)(3)(iv) as (c)(3)(i), (c)(3)(ii), and (c)(3)(iii), respectively; and revising the newly designated paragraph (c)(3)(i); and removing from paragraph (c)(4) ``$500,000'' and adding ``$550,000'' in its place. The revised text reads as follows: 15.304 Evaluation factors and significant subfactors. * * * * * (c) * * * (3)(i) Except as set forth in paragraph (c)(3)(iii) of this section, past performance shall be evaluated in all source selections for negotiated competitive acquisitions expected to exceed the simplified acquisition threshold. * * * * * 15.403-1 [Amended] 0 24. Amend section 15.403-1 by removing from paragraph (c)(3)(iii) ``$15,000,000'' and adding ``$16 million'' in its place. 0 25. Amend section 15.403-4 by removing from the third sentence of the introductory text of paragraph (a)(1) ``$550,000'' and adding ``$650,000'' in its place; and revising the second sentence of paragraph (a)(1)(iii) to read as follows: 15.403-4 Requiring cost or pricing data (10 U.S.C. 2306a and 41 U.S.C. 254b). (a)(1) * * * (iii) * * * Price adjustment amounts must consider both increases and decreases (e.g., a $200,000 modification resulting from a reduction of $500,000 and an increase of $300,000 is a pricing adjustment exceeding $650,000. * * * * * * * * 15.404-3 [Amended] 0 26. Amend section 15.404-3 by removing from paragraph (c)(1)(i) ``$10,000,000'' and adding ``$11.5 million'' in its place. 15.407-2 [Amended] 0 27. Amend section 15.407-2 by removing from paragraphs (c)(1) and the introductory text of paragraph (c)(2) ``$10 million'' and adding ``$11.5 million'', respectively, in their place. 15.408 [Amended] 0 28. Amend section 15.408 in Table 15-2 following paragraph (m), in section II, Cost Elements, in the third sentence of paragraph (A)(2), by removing ``$10,000,000'' and adding ``$11.5 million'' in its place. PART 16--TYPES OF CONTRACTS 16.503 [Amended] 0 29. Amend section 16.503 by removing from paragraph (d)(1) ``$10,000,000'' and adding ``$11.5 million'' in its place. 16.504 [Amended] 0 30. Amend section 16.504 by removing from the introductory text of paragraph (c)(2)(i) ``$10 million'' and adding ``$11.5 million'' in its place. 16.505 [Amended] 0 31. Amend section 16.505 by removing from paragraph (b)(1)(i) and the introductory text of paragraph (b)(2) ``$2,500'' and adding ``$3,000'' in its place. 16.506 [Amended] 0 32. Amend section 16.506 by removing from paragraphs (f) and (g) ``$10 million'' and adding ``$11.5 million'' in its place. 16.601 [Amended] 0 33. Amend section 16.601 by removing from paragraph (b)(3)(i) ``$25,000'' and adding ``$30,000'' in its place. PART 17--SPECIAL CONTRACTING METHODS 17.108 [Amended] 0 34. Amend section 17.108 in paragraph (a) by removing ``$10 million'' and adding ``$11.5 million'' in its place; and in paragraph (b) by removing ``$100 million'' and adding ``$114.5 million'' in its place. PART 19--SMALL BUSINESS PROGRAMS 19.502-1 [Amended] 0 35. Amend section 19.502-1 by removing from paragraph (b) ``$2,500'' and adding ``$3,000'' in its place. 19.502-2 [Amended] 0 36. Amend section 19.502-2 by removing from the first sentence of paragraph (a) ``$2,500'' and adding ``$3,000'' in its place; and removing from paragraph (d) ``$25,000'' and adding ``$30,000'' in its place. 19.702 [Amended] 0 37. Amend section 19.702 by removing from paragraphs (a)(1) and (a)(2) ``$500,000'' and adding ``$550,000'' in their place. 19.704 [Amended] 0 38. Amend section 19.704 by removing from paragraph (a)(9) ``$500,000'' and adding ``$550,000'' in its place. 19.708 [Amended] 0 39. Amend section 19.708 by removing from the first sentence of paragraph (b)(1) ``$500,000'' and adding ``$550,000'' in its place. 19.805-1 [Amended] 0 40. Amend section 19.805-1 by removing from paragraph (a)(2) ``$5,000,000'' and ``$3,000,000'' and adding ``$5.5 million'' and ``$3.5 million'', respectively, in their place. 19.1002 [Amended] 0 41. Amend section 19.1002 by removing from paragraph (1) of the definition ``Emerging small business reserve amount'', ``$25,000'' and adding ``$30,000'' in its place. 19.1007 [Amended] 0 42. Amend section 19.1007 by removing from paragraphs (c)(1)(i) and (c)(1)(ii) ``$25,000'' and adding ``$30,000'' in its place. 19.1008 [Amended] 0 43. Amend section 19.1008 by removing from paragraph (c) ``$25,000'' and adding ``$30,000'' in its place. 19.1202-2 [Amended] 0 44. Amend section 19.1202-2 by removing from paragraph (a) ``$500,000'' and adding ``$550,000'' in its place. 19.1306 [Amended] 0 45. Amend section 19.1306 by removing from paragraph (a)(2)(i) ``$5,000,000'' and adding ``$5.5 million'' in its place; and removing from paragraph (a)(2)(ii) ``$3,000,000'' and adding ``$3.5 million'' in its place. 19.1406 [Amended] 0 46. Amend section 19.1406 by removing from paragraph (a)(2)(i) ``$5 million'' and adding ``$5.5 million'' in its place. PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS 22.103-4 [Amended] 0 47. Amend section 22.103-4 in paragraph (b) by removing the last sentence. 22.103-5 [Amended] 0 48. Amend section 22.103-5 in the introductory text of paragraph (b) by removing ``be over $100,000;'' and adding ``exceed the simplified acquisition threshold;'' in its place. 22.305 [Amended] 0 49. Amend section 22.305 by removing from paragraph (a) ``the simplified acquisition threshold;'' and adding ``$100,000;'' in its place. [[Page 57368]] 22.1103 [Amended] 0 50. Amend section 22.1103 by removing from the second sentence ``$500,000'' and adding ``$550,000'' in its place. 22.1303 [Amended] 0 51. Amend section 22.1303 by removing from paragraphs (a) and (c) ``$25,000'' and adding ``$100,000'' in its place. 22.1310 [Amended] 0 52. Amend section 22.1310 by removing from the introductory text of paragraph (a)(1) ``$25,000'' and adding ``$100,000'' in its place. PART 25--FOREIGN ACQUISITION 0 53. Amend section 25.1101 in the introductory text of paragraph (a)(1) by removing ``$2,500 ($15,000 for acquisitions as described in 13.201(g)(1))'' and adding ``the micro-purchase threshold'' in its place; and by revising paragraphs (e)(1) and (e)(2) to read as follows: 25.1101 Acquisition of supplies. * * * * * (e) * * * (1) Exceeds the simplified acquisition threshold; or (2) Does not exceed the simplified acquisition threshold, but the savings from waiving the duty is anticipated to be more than the administrative cost of waiving the duty. When used for acquisitions that do not exceed the simplified acquisition threshold, the contracting officer may modify paragraphs (c)(1) and (j)(2) of the clause to reduce the dollar figure. * * * * * 25.1103 [Amended] 0 54. Amend section 25.1103 in paragraph (a) by removing ``with a value exceeding $2,500, $15,000 for acquisitions as described in 13.201(g)(1)''. PART 28--BONDS AND INSURANCE 28.102-1 [Amended] 0 55. Amend section 28.102-1 by removing from the introductory text of paragraph (b)(1) ``$25,000'' and adding ``$30,000'' in its place. 28.102-2 [Amended] 0 56. Amend section 28.102-2 by removing from the heading of paragraph (c) ``$25,000'' and adding ``$30,000'' in its place. 28.102-3 [Amended] 0 57. Amend section 28.102-3 in the first sentence of paragraph (b) by removing ``$25,000'' and adding ``$30,000'' in its place. PART 32--CONTRACT FINANCING 32.104 [Amended] 0 58. Amend section 32.104 by removing from paragraphs (d)(2)(i) and (d)(2)(ii) ``$2 million'' and adding ``$2.5 million'' in their place. PART 36--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS 36.201 [Amended] 0 59. Amend section 36.201 by removing from paragraph (a)(1)(i) ``$500,000'' and adding ``$550,000'' in its place. 0 60. Amend section 36.203 by revising paragraph (a) to read as follows: 36.203 Government estimate of construction costs. (a) An independent Government estimate of construction costs shall be prepared and furnished to the contracting officer at the earliest practicable time for each proposed contract and for each contract modification anticipated to exceed the simplified acquisition threshold. The contracting officer may require an estimate when the cost of required work is not anticipated to exceed the simplified acquisition threshold. The estimate shall be prepared in as much detail as though the Government were competing for award. * * * * * 0 61. Amend section 36.213-2 by revising paragraph (a) to read as follows: 36.213-2 Presolicitation notices. (a) Unless the requirement is waived by the head of the contracting activity or a designee, the contracting officer shall issue presolicitation notices on any construction requirement when the proposed contract is expected to exceed the simplified acquisition threshold. Presolicitation notices may also be used when the proposed contract is not expected to exceed the simplified acquisition threshold. These notices shall be issued sufficiently in advance of the invitation for bids to stimulate the interest of the greatest number of prospective bidders. * * * * * 36.604 [Amended] 0 62. Amend section 36.604 by removing from the introductory text of paragraph (a) ``$25,000'' each time it appears (twice) and adding ``$30,000'' in its place. 36.605 [Amended] 0 63. Amend section 36.605 by removing from the first sentence of paragraph (a) ``$100,000'' and adding ``the simplified acquisition threshold'' in its place. PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES 42.705-3 [Amended] 0 64. Amend section 42.705-3 by removing from the fourth sentence of the introductory text of paragraph (b)(4)(ii) ``(e.g., $100,000 or less)'' and adding ``(i.e., contracts that do not exceed the simplified acquisition threshold)'' in its place. 42.709 [Amended] 0 65. Amend section 42.709 by removing from paragraph (b) ``$550,000'' and adding ``$650,000'' in its place. 42.709-6 [Amended] 0 66. Amend section 42.709-6 by removing from the first sentence ``$550,000'' and adding ``$650,000'' in its place. 0 67. Amend section 42.1502 by revising the first sentence of paragraph (a) to read as follows: 42.1502 Policy. (a) Except as provided in paragraph (b) of this section, agencies shall prepare an evaluation of contractor performance for each contract that exceeds the simplified acquisition threshold at the time the work under the contract is completed. * * * * * * * * PART 48--VALUE ENGINEERING 48.201 [Amended] 0 68. Amend section 48.201 by removing from the first sentence of the introductory text of paragraph (a) ``be $100,000 or more,'' and adding ``exceed the simplified acquisition threshold,'' in its place. 48.202 [Amended] 0 69. Amend section 48.202 by removing from the first sentence ``be $100,000 or more,'' and adding ``exceed the simplified acquisition threshold,'' in its place. PART 49--TERMINATION OF CONTRACTS 0 70. Amend section 49.502 by revising the heading of paragraph (a) and the introductory text of paragraph (a)(1); revising the heading of paragraph (b), removing from the introductory text of paragraph (b)(1)(i) and paragraph [[Page 57369]] (b)(2)(ii) ``be over $100,000,'' and adding ``exceed the simplified acquisition threshold''. 0 The revised text reads as follows: 49.502 Termination for convenience of the Government. (a) Fixed-price contracts that do not exceed the simplified acquisition threshold (short form)--(1) General use. The contracting officer shall insert the clause at 52.249-1, Termination for Convenience of the Government (Fixed-Price) (Short Form), in solicitations and contracts when a fixed-price contract is contemplated and the contract amount is not expected to exceed the simplified acquisition threshold, except-- * * * * * (b) Fixed-price contracts that exceed the simplified acquisition threshold--(1)(i) General use. * * * * * * * * PART 50--EXTRAORDINARY CONTRACTUAL ACTIONS 50.201 [Amended] 0 71. Amend section 50.201 by removing from paragraph (b) ``$50,000'' and adding ``$55,000'' in its place. 50.203 [Amended] 0 72. Amend section 50.203 by removing from paragraph (b)(4) ``$25 million'' and adding ``$28.5 million'' in its place; and removing from paragraphs (e)(1)(i) and (e)(1)(ii) ``$50,000'' and adding ``$55,000'' in its place. PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES 52.203-6 [Amended] 0 73. Amend section 52.203-6 by revising the date of the clause to read ``(SEP 2006)''; and removing from paragraph (c) ``$100,000'' and adding ``the simplified acquisition threshold'' in its place. 52.209-6 [Amended] 0 74. Amend section 52.209-6 by revising the date of the clause to read ``(SEP 2006)''; and removing from paragraphs (a) and (b) ``$25,000'' and adding ``$30,000'' in its place. 52.212-1 [Amended] 0 75. Amend section 52.212-1 by revising the date of the clause to read ``(SEP 2006)''; and removing from the first sentence of paragraph (j) ``$25,000'' each time it appears (twice) and adding ``$3,000'' in its place. 52.212-5 [Amended] 0 76. Amend section 52.212-5 by-- 0 a. Revising the date of the clause to read ``(SEP 2006)''; 0 b. Removing from paragraph (b)(1) ``(OCT 1995)'' and adding ``(SEP 2006)'' in its place; 0 c. Removing from paragraph (b)(8)(i) of the clause ``(JULY 2005)'' and adding ``(SEP 2006)'' in its place; 0 d. Removing from paragraphs (b)(18) and (b)(20) of the clause ``(DEC 2001)'' and adding ``(SEP 2006)'' in its place; and 0 e. Removing from paragraph (e)(1)(i) ``$500,000'' and adding ``$550,000'' in its place; and removing from paragraph (e)(1)(iii) ``(DEC 2001)'' and adding ``(SEP 2006)'' in its place. 52.213-4 [Amended] 0 77. Amend section 52.213-4 by-- 0 a. Revising the date of the clause to read ``(SEP 2006)''; 0 b. Removing from paragraph (a)(2)(vi) ``(FEB 2006)'' and adding ``(SEP 2006)'' in its place; and 0 c. Removing from paragraphs (b)(1)(iii) and (b)(1)(v) ``(DEC 2001)'' and ``$25,000'' and adding ``(SEP 2006)'' and ``$100,000'', respectively, in their place; and removing from paragraph (b)(2)(i) ``(JAN 2005)'' and ``$25,000'' and adding ``(SEP 2006)'' and ``$30,000'', respectively, in their place. 52.219-9 [Amended] 0 78. Amend section 52.219-9 by revising the date of the clause to read ``(SEP 2006)''; and removing from paragraph (d)(9) ``$500,000'' and adding ``$550,000'' in its place. 52.222-35 [Amended] 0 79. Amend section 52.222-35 by revising the date of the clause to read ``(SEP 2006)''; and removing from the first sentence of paragraph (g) ``$25,000'' and adding ``$100,000'' in its place. 52.222-37 [Amended] 0 80. Amend section 52.222-37 by revising the date of the clause to read ``(SEP 2006)''; and removing from paragraph (f) ``$25,000'' and adding ``$100,000'' in its place. 0 81. Amend section 52.236-1 by revising the introductory paragraph to read as follows: 52.236-1 Performance of Work by the Contractor. As prescribed in 36.501(b), insert the following clause: [Complete the clause by inserting the appropriate percentage consistent with the complexity and magnitude of the work and customary or necessary specialty subcontracting (see 36.501(a)).] * * * * * 0 82. Amend section 52.243-7 by revising the introductory paragraph to read as follows: 52.243-7 Notification of Changes. As prescribed in 43.107, insert the following clause: * * * * * 52.244-6 [Amended] 0 83. Amend section 52.244-6 by revising the date of the clause to read ``(SEP 2006)''; removing from paragraph (c)(1)(i) ``$500,000'' and adding ``$550,000'' in its place, and removing from paragraph (c)(1)(iii) of the clause ``(DEC 2001)'' and adding ``(SEP 2006)'' in its place. 52.248-3 [Amended] 0 84. Amend section 52.248-3 by revising the date of the clause to read ``(SEP 2006)''; and removing from the first sentence of paragraph (h) ``$50,000'' and adding ``$55,000'' in its place. 0 85. Amend section 52.249-1 by revising the introductory paragraph to read as follows: 52.249-1 Termination for Convenience of the Government (Fixed-Price) (Short Form). As prescribed in 49.502(a)(1), insert the following clause: * * * * * PART 53--FORMS 53.219 [Amended] 0 86. Amend section 53.219 by removing from paragraphs (a) and (b) ``(Rev. 10/01)'' and adding ``(Rev. SEP 2006)'' in its place. 0 87. Amend section 53.301-294 by revising the form to read as follows: 53.301-294 Subcontracting Report for Individual Contracts. BILLING CODE 6820-EP-C [[Page 57370]] [GRAPHIC] [TIFF OMITTED] TR28SE06.286 [[Page 57371]] [GRAPHIC] [TIFF OMITTED] TR28SE06.287 [[Page 57372]] [GRAPHIC] [TIFF OMITTED] TR28SE06.288 0 88. Amend section 53.301-295 by revising the form to read as follows: 53.301-295 Summary Subcontract Report. [[Page 57373]] [GRAPHIC] [TIFF OMITTED] TR28SE06.289 [[Page 57374]] [GRAPHIC] [TIFF OMITTED] TR28SE06.290 [FR Doc. 06-8206 Filed 9-27-06; 8:45 am] BILLING CODE 6820-EP-C [Federal Register: September 28, 2006 (Volume 71, Number 188)] [Rules and Regulations] [Page 57375] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr28se06-26] [[Page 57375]] ----------------------------------------------------------------------- DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 22, 25, and 52 [FAC 2005-13; FAR Case 2005-030; Item V;Docket 2006-0020, Sequence 15] RIN 9000-AK40 Federal Acquisition Regulation; FAR Case 2005-030, Trade Agreements--Thresholds AGENCIES: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) have adopted as final, without change, an interim rule amending the Federal Acquisition Regulation (FAR) to implement the increased thresholds for the World Trade Organization Government Procurement Agreement and Free Trade Agreements. DATES: Effective Date: September 28, 2006. FOR FURTHER INFORMATION CONTACT: For clarification of content, contact Ms. Jeritta Parnell, Procurement Analyst, at (202) 501-4082. Please cite FAC 2005-13, FAR case 2005-030. For information pertaining to status or publication schedules, contact the FAR Secretariat at (202) 501-4755. SUPPLEMENTARY INFORMATION: A. Background The Councils published an interim rule in the Federal Register at 71 FR 864, January 5, 2006, to implement the increased thresholds for the World Trade Organization Government Procurement Agreement and Free Trade Agreements. Every two years, the trade agreements thresholds are escalated according to a pre-determined formula set forth in the agreements. The United States Trade Representative published the new thresholds in the Federal Register at 70 FR 73510 to 73511, December 12, 2005. No comments were received by the close of the public comment period on March 6, 2006, therefore, the Councils agreed to convert the interim rule to a final rule. 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 Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration certify that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the threshold changes are in line with inflation and only maintain the status quo. C. Paperwork Reduction Act The Paperwork Reduction Act does apply, because the final rule affects the certification and information collection requirements in the provisions at FAR 52.212-3, 52.225-4, 52.225-6, and 52.225-11 currently approved under OMB clearances 9000-0136, 9000-0130, 9000- 0025, and 9000-0141 respectively. There is, however, no change to these clearances because the threshold changes are due to inflation and only maintain the status quo. As a result, these FAR changes do not impose additional information collection requirements. List of Subjects in 48 CFR Parts 22, 25, and 52 Government procurement. Dated: September 19, 2006 Ralph De Stefano, Director,Contract Policy Division. Interim Rule Adopted as Final Without Change 0 Accordingly, the interim rule amending 48 CFR parts 22, 25 and 52, which was published at 71 FR 864, January 5, 2006, is adopted as a final rule without change. [FR Doc. 06-8207 Filed 9-27-06; 8:45 am] BILLING CODE 6820-EP-S [Federal Register: September 28, 2006 (Volume 71, Number 188)] [Rules and Regulations] [Page 57378-57379] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr28se06-28] ----------------------------------------------------------------------- DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Part 25 [FAC 2005-13; FAR Case 2005-022; Item VII;Docket 2006-0020, Sequence 14] RIN 9000-AK34 Federal Acquisition Regulation; FAR Case 2005-022, Exception to the Buy American Act for Commercial Information Technology AGENCIES: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) have agreed to convert to a final rule without change, an interim rule amending the Federal Acquisition [[Page 57379]] Regulation (FAR) to implement Section 535(a) of Division F of the Consolidated Appropriations Act, 2004, and similar sections in subsequent appropriations acts. Section 535(a) authorizes an exception to the Buy American Act for acquisitions of information technology that are commercial items. DATES: Effective Date: September 28, 2006. FOR FURTHER INFORMATION CONTACT For clarification of content, contact Mr. Jeremy Olson, at (202) 501-3221. Please cite FAC 2005-13, FAR case 2005-022. For information pertaining to status or publication schedules, contact the FAR Secretariat at (202) 501-4755. SUPPLEMENTARY INFORMATION: A. Background This final rule amends the Federal Acquisition Regulation to implement annual appropriations act provisions that exempt acquisitions of information technology that are commercial items from the Buy American Act, including-- Section 535(a) of Division F, Consolidated Appropriations Act, 2004 (Pub. L. 108-199); Section 517 of Division H, Title V of the Consolidated Appropriations Act, 2005 (Pub. L. 108-447); and Section 717 of Division A, Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies Appropriations Act, 2006 (Pub. L. 109-115). This exception was initially implemented through deviations by the individual agencies, until it became clear that it was not just for one year. The Councils now expect this exception to continue to appear in future appropriations acts. If the exception does not appear in a future appropriations act, the Councils will promptly change the FAR to limit applicability of the exception to the fiscal years to which it applies. DoD, GSA, and NASA published an interim rule in the Federal Register at 71 FR 223, January 3, 2006 and the public comment period closed on March 6, 2006. Public comments. The Councils addressed the two public comments as follows: Agree with rule One respondent concurs with the rule as written. The respondent views this rule as a positive first step in recognizing the Government's need for quicker, cheaper access to commercial-off-the- shelf information technology. Response: None required. Rule should not apply to DoD The other respondent believes that the exception should not apply to DoD due to the security risk associated with foreign entities potentially gaining access to DoD information systems. Response: This rule implements statute. The statutes that the Councils are implementing do not exempt DoD. Each fiscal year statute states that the restrictions of the Buy American Act shall not apply to the acquisition by the Federal Government of information technology that is a commercial item. Although DoD uses DoD-unique Buy American Act/Free Trade Agreement provisions and clauses, this exception has already been implemented by DoD for Fiscal Years 2004 through 2006 by class deviations signed by the Director of Defense Procurement and Acquisition Policy (2004-O0003, 2005-O0004, 2005-O0010). Regardless of the applicability of the Buy American Act, Defense FAR Supplement (DFARS) Subpart 239.71, Security and Privacy for Computer Systems, requires defense agencies to ensure that information assurance is provided for information technology in accordance with current policies, procedures, and statutes. 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 Regulatory Flexibility Act, 5 U.S.C. 601, et seq., applies to this final rule. The Councils prepared a Final Regulatory Flexibility Analysis (FRFA), and it is summarized as follows: The objective of this rule is to promote Government access to commercial information technology. As a result of this exception, the Buy American Act will no longer apply to acquisitions of commercial information technology. The Free Trade Agreement non- discriminatory provisions are no longer necessary, since all products will be treated without the restrictions of the Buy American Act. The final rule applies to all offerors responding to solicitations for commercial information technology where the Buy American Act previously applied (generally, acquisitions between the micro-purchase threshold and $193,000). This impact analysis does not include the Department of Defense, which applies this exception to DoD-unique Buy American Act/Free Trade Agreement provisions and clauses under a separate case (DFARS Case 2005-D011). This exception will allow small entities to compete without meeting the Buy American Act domestic end product requirements. It is anticipated that small business concerns will continue to receive the same number of awards in the range of the micro-purchase threshold to $100,000, because these awards are generally set-aside for small business concerns. It is also expected that small business concerns will continue to receive awards in the range of $100,000 to $193,000, but in this range they will face competition from foreign end products. This rule will not have an effect on small businesses affected by the ``non-manufacturer rule,'' which means that a contractor under a small business set-aside or 8(a) contract shall be a small business under the applicable size standard and shall provide either its own product or that of another domestic small business manufacturing or processing concern. If there is a small business set-aside, and there is no SBA waiver of the nonmanufacturer rule, then FAR 52.219-6(c) and/or FAR 52.219-18(d) require that a domestic product must be furnished. In this case, the rule will have no effect on small businesses because the nonmanufacturer rule is not changed. If SBA did waive the nonmanufacturer rule, then there is no requirement to purchase a domestic product but an evaluation preference would apply. The rule could have an impact on small businesses when there is no small business set-aside because small businesses may lose the evaluation preference for acquisitions between $25,000 and $193,000. Interested parties may obtain a copy of the FRFA from the FAR Secretariat. The FAR Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration. C. Paperwork Reduction Act The Paperwork Reduction Act does apply because the changes to the FAR will slightly reduce the information collection requirements currently approved by the Office of Management and Budget OMB Clearances 9000-0024 and 9000-0130. We estimate a reduction of approximately 300 hours to OMB Clearance 9000-0024 and 50 hours to 9000-0130. List of Subjects in 48 CFR Part 25 Government procurement. Dated: September 19, 2006. Ralph De Stefano, Director, Contract Policy Division. Interim Rule Adopted as Final Without Change 0 Accordingly, the interim rule amending 48 CFR part 25, which was published in the Federal Register at 71 FR 223, January 3, 2006, is adopted as a final rule without change. [FR Doc. 06-8217 Filed 9-27-06; 8:45 am] BILLING CODE 6820-EP-S