Federal Acquisition Regulation; Small Entity Compliance Guide, 33676-33677 [05-11183]

Download as PDF 33676 Federal Register / Vol. 70, No. 109 / Wednesday, June 8, 2005 / Rules and Regulations (2) When the application of (b)(1) of this subsection results in a loss— (i) The allowable portion of the loss is zero if the fair market value exceeds the undepreciated balance of the asset on the date the contractor becomes a lessee; and (ii) The allowable portion of the loss is limited to the difference between the fair market value and the undepreciated balance of the asset on the date the contractor becomes a lessee if the fair market value is less than the undepreciated balance of the asset on the date the contractor becomes a lessee. * * * * * (d) The gain recognized for contract costing purposes shall be limited to the difference between the acquisition cost (or for assets acquired under a capital lease, the value at which the leased asset is capitalized) of the asset and its undepreciated balance (except see paragraphs (e)(2)(i) or (ii) of this subsection). (e)* * * (2)* * * * * * * * (ii) Recognize the gain or loss in the period of disposition, in which case the Government shall participate to the same extent as outlined in paragraph (e)(1) of this subsection. * * * * * 4. Amend section 31.205–36 by revising paragraph (b)(2) to read as follows: I 31.205–36 and National Aeronautics and Space Administration (NASA). ACTION: Small Entity Compliance Guide. Rental costs. * * * * * (b)* * * (2) Rental costs under a sale and leaseback arrangement only up to the amount the contractor would be allowed if the contractor retained title, computed based on the net book value of the asset on the date the contractor becomes a lessee of the property adjusted for any gain or loss recognized in accordance with 31.205–16(b). * * * * * [FR Doc. 05–11184 Filed 6–7–05; 8:45 am] BILLING CODE 6820–EP–S DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Chapter 1 Federal Acquisition Regulation; Small Entity Compliance Guide AGENCIES: Department of Defense (DoD), General Services Administration (GSA), SUMMARY: This document is issued under the joint authority of the Secretary of Defense, the Administrator of General Services and the Administrator for the National Aeronautics and Space Administration. This Small Entity Compliance Guide has been prepared in accordance with Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996. It consists of a summary of rules appearing in Federal Acquisition Circular (FAC) 2005–04 which amend the FAR. An asterisk (*) next to a rule indicates that a regulatory flexibility analysis has been prepared. Interested parties may obtain further information regarding these rules by referring to FAC 2005–04 which precedes this document. These documents are also available via the Internet at http://www.acqnet.gov/ far. FOR FURTHER INFORMATION CONTACT: Laurieann Duarte, FAR Secretariat, (202) 501–4755. For clarification of content, contact the analyst whose name appears in the table below. LIST OF RULES IN FAC 2005–04 Item Subject I ............ II ........... *III ......... IV .......... Notification of Employee Rights Concerning Payment of Union Dues or Fees ................................. Telecommuting for Federal Contractors .............................................................................................. Incentives for Use of Performance-Based Contracting for Services .................................................. Submission of Cost or Pricing Data on Noncommercial Modifications of Commercial Items (Interim). Applicability of SDB and HUBZone Price Evaluation Factor .............................................................. Labor Standards for Contracts Involving Construction ....................................................................... Deferred Compensation and Postretirement Benefits Other Than Pensions ..................................... Gains and Losses ................................................................................................................................ *V ......... VI .......... VII ......... VIII ........ 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 2005–04 amends the FAR as specified below: Item I—Notification of Employee Rights Concerning Payment of Union Dues or Fees (FAR Case 2004–010) This final rule adopts, without change, the interim rule published in the Federal Register at 69 FR 76352, December 20, 2004, and issued as Item IV of FAC 2001–26. It amends FAR parts VerDate jul<14>2003 17:35 Jun 07, 2005 Jkt 205001 FAR case 2, 22, and 52 to implement Executive Order (E.O.) 13201, Notification of Employee Rights Concerning Payment of Union Dues or Fees, and Department of Labor regulations at 29 CFR 470. The rule requires Government contractors and subcontractors to post notices informing their employees that under Federal law they cannot be required to join a union or maintain membership in a union to retain their jobs. The required notice also advises employees who are not union members that they can object to the use of their union dues for certain purposes. This rule applies to Federal contractors and subcontractors with contracts or subcontracts that exceed the simplified acquisition threshold, unless PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 Analyst 2004–010 2003–025 2004–004 2004–035 Marshall. Zaffos. Wise. Olson. 2003–015 2002–004 2001–031 2004–005 Marshall. Nelson. Olson. Olson. covered by an exemption granted by the Secretary of Labor. Item II—Telecommuting for Federal Contractors (FAR Case 2003–025) This rule finalizes without changes the interim rule published in the Federal Register at 69 FR 59701, October 5, 2004, and issued as Item III of FAC 2001–025. This final rule implements Section 1428 of the Services Acquisition Reform Act of 2003 (Title XIV of Public Law 108–136), which prohibits agencies from including a requirement in a solicitation that precludes an offeror from permitting its employees to telecommute or, when telecommuting is not precluded, from E:\FR\FM\08JNR4.SGM 08JNR4 Federal Register / Vol. 70, No. 109 / Wednesday, June 8, 2005 / Rules and Regulations unfavorably evaluating an offeror’s proposal that includes telecommuting unless it would adversely affect agency requirements, such as security. Contracting officers awarding service contracts should familiarize themselves with this rule. Item III—Incentives for Use of Performance-Based Contracting for Services (FAR Case 2004–004) This final rule amends the Federal Acquisition Regulation (FAR) to provide Governmentwide authority to treat performance-based contracts or task orders for services as commercial items, if certain conditions are met. Agencies must report on the use of this authority. This change implements sections 1431 and 1433 of the National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 108–136) and is intended to promote the use of performance-based contracting. Item IV—Submission of Cost or Pricing Data on Noncommercial Modifications of Commercial Items (FAR Case 2004– 035) This interim rule implements an amendment to 10 U.S.C. 2306a. The change requires that the exception from the requirement to obtain certified cost or pricing data for a commercial item does not apply to noncommercial modifications of a commercial item that are expected to cost, in the aggregate, more than $500,000 or 5 percent of the total price of the contract, whichever is greater. Section 818 applies to offers submitted, and to modifications of contracts or subcontracts made, on or after June 1, 2005. This new policy applies only to acquisitions funded by DoD, NASA, or the Coast Guard, since the statute amends 10 U.S.C. 2306a, which only applies to DoD, NASA, and the Coast Guard. The new language does not apply to acquisitions funded by other than DoD, NASA, or the Coast Guard because Section 818 did not amend 41 U.S.C. 254b, which prohibits obtaining cost or pricing data for commercial items. However, the new policy applies to contracts awarded or task or delivery orders placed on behalf of DoD, NASA, or the Coast Guard by an official of the United States outside of those agencies, because the statutory requirement of Section 818 applies to VerDate jul<14>2003 17:35 Jun 07, 2005 Jkt 205001 the funds provided by DoD, NASA, or the Coast Guard. Item V—Applicability of SDB and HUBZone Price Evaluation Factor (FAR Case 2003–015) This final rule removes some of the exceptions to the Small Disadvantaged Business and HUBZone preference programs. The contracting officer will now apply a price evaluation adjustment to offers of eligible products in acquisitions subject to the Trade Agreements Act. This rule will have a beneficial impact on all domestic concerns, especially small entities that are small disadvantaged business concerns or HUBZone small business concerns. Item VI—Labor Standards for Contracts Involving Construction (FAR Case 2002–004) This final rule implements in the FAR the DoL rule revising the terms ‘‘construction, prosecution, completion or repair’’ (29 CFR 5.2(j)) and ‘‘site of the work’’ (29 CFR 5.2(l)). In addition, the Councils have clarified several definitions relating to labor standards for contracts involving construction and made requirements for flow down of labor clauses more precise. The most significant impact of this rule is that contractors must pay DavisBacon Act wages at a secondary site of the work, if a significant portion of the work is to be constructed at that site and the site meets the other criteria specified in the rule. When transporting portions of the building or work between the secondary site of the work and the primary site of the work, the wages for the primary site of the work are applicable. The contracting officer must coordinate with the Department of Labor when there is any uncertainty as to whether a work site is a secondary site of the work. Item VII—Deferred Compensation and Postretirement Benefits Other Than Pensions (FAR Case 2001–031) This final rule amends the FAR by revising paragraph (k), Deferred compensation other than pensions, and paragraph (o), Postretirement benefits other than pensions, of FAR 31.205–6, Compensation for personal services, cost principle. Changes to paragraph (k) PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 33677 include: deletion of language that duplicates definitions provided in FAR 31.001, elimination of obsolete coverage, and use of terminology consistent with Cost Accounting Standards. Changes to paragraph (o) include: moving and revising language in (o)(3) through (o)(5) to (o)(2)(iii) because these requirements only apply to accrual costing other than terminal funding. In addition, new coverage is added to the related contract clause at FAR 52.215–18, Reversion or Adjustment of Plans for Postretirement Benefits (PRB) Other Than Pensions, specifying the method of recovery of refunds and credits. The rule revises the cost principle and contract clause by improving clarity and structure, and removing unnecessary and duplicative language. The case was initiated as a result of comments and recommendations received from industry and Government representatives during a series of public meetings. This rule is of particular interest to contractors and contracting officers who use cost analysis to price contracts and modifications, and who determine or negotiate reasonable costs in accordance with a clause of a contract, e.g., price revision of fixedprice incentive contracts, terminated contracts, or indirect cost rates. Item VIII—Gains and Losses (FAR Case 2004–005) This final rule amends FAR 31.205– 16 to address the timing of the gain or loss recognition of sale and leaseback arrangements of contractor depreciable property or other capital assets. The final rule defines the disposition date for a sale leaseback arrangement as the date the contractor begins to incur an obligation for lease or rental costs. Contracting officers, auditors, and contractors with responsibilities related to allowable cost determinations involving sale and leaseback arrangements of contractor depreciable property or other capital assets will be impacted by new policies governing that area. Dated: May 27, 2005. Julia B. Wise, Director, Contract Policy Division. [FR Doc. 05–11183 Filed 6–7–05; 8:45 am] BILLING CODE 6820–EP–S E:\FR\FM\08JNR4.SGM 08JNR4

Agencies

[Federal Register Volume 70, Number 109 (Wednesday, June 8, 2005)]
[Rules and Regulations]
[Pages 33676-33677]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-11183]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1


Federal Acquisition Regulation; Small Entity Compliance Guide

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

ACTION: Small Entity Compliance Guide.

-----------------------------------------------------------------------

SUMMARY: This document is issued under the joint authority of the 
Secretary of Defense, the Administrator of General Services and the 
Administrator for the National Aeronautics and Space Administration. 
This Small Entity Compliance Guide has been prepared in accordance with 
Section 212 of the Small Business Regulatory Enforcement Fairness Act 
of 1996. It consists of a summary of rules appearing in Federal 
Acquisition Circular (FAC) 2005-04 which amend the FAR. An asterisk (*) 
next to a rule indicates that a regulatory flexibility analysis has 
been prepared. Interested parties may obtain further information 
regarding these rules by referring to FAC 2005-04 which precedes this 
document. These documents are also available via the Internet at http:/
/www.acqnet.gov/far.

FOR FURTHER INFORMATION CONTACT: Laurieann Duarte, FAR Secretariat, 
(202) 501-4755. For clarification of content, contact the analyst whose 
name appears in the table below.

                                          List of Rules in FAC 2005-04
----------------------------------------------------------------------------------------------------------------
      Item                          Subject                             FAR case                 Analyst
----------------------------------------------------------------------------------------------------------------
I..............  Notification of Employee Rights Concerning     2004-010                 Marshall.
                  Payment of Union Dues or Fees.
II.............  Telecommuting for Federal Contractors........  2003-025                 Zaffos.
*III...........  Incentives for Use of Performance-Based        2004-004                 Wise.
                  Contracting for Services.
IV.............  Submission of Cost or Pricing Data on          2004-035                 Olson.
                  Noncommercial Modifications of Commercial
                  Items (Interim).
*V.............  Applicability of SDB and HUBZone Price         2003-015                 Marshall.
                  Evaluation Factor.
VI.............  Labor Standards for Contracts Involving        2002-004                 Nelson.
                  Construction.
VII............  Deferred Compensation and Postretirement       2001-031                 Olson.
                  Benefits Other Than Pensions.
VIII...........  Gains and Losses.............................  2004-005                 Olson.
----------------------------------------------------------------------------------------------------------------


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 2005-04 amends the FAR as specified below:

Item I--Notification of Employee Rights Concerning Payment of Union 
Dues or Fees (FAR Case 2004-010)

    This final rule adopts, without change, the interim rule published 
in the Federal Register at 69 FR 76352, December 20, 2004, and issued 
as Item IV of FAC 2001-26. It amends FAR parts 2, 22, and 52 to 
implement Executive Order (E.O.) 13201, Notification of Employee Rights 
Concerning Payment of Union Dues or Fees, and Department of Labor 
regulations at 29 CFR 470. The rule requires Government contractors and 
subcontractors to post notices informing their employees that under 
Federal law they cannot be required to join a union or maintain 
membership in a union to retain their jobs. The required notice also 
advises employees who are not union members that they can object to the 
use of their union dues for certain purposes. This rule applies to 
Federal contractors and subcontractors with contracts or subcontracts 
that exceed the simplified acquisition threshold, unless covered by an 
exemption granted by the Secretary of Labor.

Item II--Telecommuting for Federal Contractors (FAR Case 2003-025)

    This rule finalizes without changes the interim rule published in 
the Federal Register at 69 FR 59701, October 5, 2004, and issued as 
Item III of FAC 2001-025. This final rule implements Section 1428 of 
the Services Acquisition Reform Act of 2003 (Title XIV of Public Law 
108-136), which prohibits agencies from including a requirement in a 
solicitation that precludes an offeror from permitting its employees to 
telecommute or, when telecommuting is not precluded, from

[[Page 33677]]

unfavorably evaluating an offeror's proposal that includes 
telecommuting unless it would adversely affect agency requirements, 
such as security. Contracting officers awarding service contracts 
should familiarize themselves with this rule.

Item III--Incentives for Use of Performance-Based Contracting for 
Services (FAR Case 2004-004)

    This final rule amends the Federal Acquisition Regulation (FAR) to 
provide Governmentwide authority to treat performance-based contracts 
or task orders for services as commercial items, if certain conditions 
are met. Agencies must report on the use of this authority. This change 
implements sections 1431 and 1433 of the National Defense Authorization 
Act for Fiscal Year 2004 (Pub. L. 108-136) and is intended to promote 
the use of performance-based contracting.

Item IV--Submission of Cost or Pricing Data on Noncommercial 
Modifications of Commercial Items (FAR Case 2004-035)

    This interim rule implements an amendment to 10 U.S.C. 2306a. The 
change requires that the exception from the requirement to obtain 
certified cost or pricing data for a commercial item does not apply to 
noncommercial modifications of a commercial item that are expected to 
cost, in the aggregate, more than $500,000 or 5 percent of the total 
price of the contract, whichever is greater. Section 818 applies to 
offers submitted, and to modifications of contracts or subcontracts 
made, on or after June 1, 2005. This new policy applies only to 
acquisitions funded by DoD, NASA, or the Coast Guard, since the statute 
amends 10 U.S.C. 2306a, which only applies to DoD, NASA, and the Coast 
Guard. The new language does not apply to acquisitions funded by other 
than DoD, NASA, or the Coast Guard because Section 818 did not amend 41 
U.S.C. 254b, which prohibits obtaining cost or pricing data for 
commercial items. However, the new policy applies to contracts awarded 
or task or delivery orders placed on behalf of DoD, NASA, or the Coast 
Guard by an official of the United States outside of those agencies, 
because the statutory requirement of Section 818 applies to the funds 
provided by DoD, NASA, or the Coast Guard.

Item V--Applicability of SDB and HUBZone Price Evaluation Factor (FAR 
Case 2003-015)

    This final rule removes some of the exceptions to the Small 
Disadvantaged Business and HUBZone preference programs. The contracting 
officer will now apply a price evaluation adjustment to offers of 
eligible products in acquisitions subject to the Trade Agreements Act. 
This rule will have a beneficial impact on all domestic concerns, 
especially small entities that are small disadvantaged business 
concerns or HUBZone small business concerns.

Item VI--Labor Standards for Contracts Involving Construction (FAR Case 
2002-004)

    This final rule implements in the FAR the DoL rule revising the 
terms ``construction, prosecution, completion or repair'' (29 CFR 
5.2(j)) and ``site of the work'' (29 CFR 5.2(l)). In addition, the 
Councils have clarified several definitions relating to labor standards 
for contracts involving construction and made requirements for flow 
down of labor clauses more precise.
    The most significant impact of this rule is that contractors must 
pay Davis-Bacon Act wages at a secondary site of the work, if a 
significant portion of the work is to be constructed at that site and 
the site meets the other criteria specified in the rule. When 
transporting portions of the building or work between the secondary 
site of the work and the primary site of the work, the wages for the 
primary site of the work are applicable. The contracting officer must 
coordinate with the Department of Labor when there is any uncertainty 
as to whether a work site is a secondary site of the work.

Item VII--Deferred Compensation and Postretirement Benefits Other Than 
Pensions (FAR Case 2001-031)

    This final rule amends the FAR by revising paragraph (k), Deferred 
compensation other than pensions, and paragraph (o), Postretirement 
benefits other than pensions, of FAR 31.205-6, Compensation for 
personal services, cost principle. Changes to paragraph (k) include: 
deletion of language that duplicates definitions provided in FAR 
31.001, elimination of obsolete coverage, and use of terminology 
consistent with Cost Accounting Standards. Changes to paragraph (o) 
include: moving and revising language in (o)(3) through (o)(5) to 
(o)(2)(iii) because these requirements only apply to accrual costing 
other than terminal funding. In addition, new coverage is added to the 
related contract clause at FAR 52.215-18, Reversion or Adjustment of 
Plans for Postretirement Benefits (PRB) Other Than Pensions, specifying 
the method of recovery of refunds and credits. The rule revises the 
cost principle and contract clause by improving clarity and structure, 
and removing unnecessary and duplicative language.
    The case was initiated as a result of comments and recommendations 
received from industry and Government representatives during a series 
of public meetings. This rule is of particular interest to contractors 
and contracting officers who use cost analysis to price contracts and 
modifications, and who determine or negotiate reasonable costs in 
accordance with a clause of a contract, e.g., price revision of fixed-
price incentive contracts, terminated contracts, or indirect cost 
rates.

Item VIII--Gains and Losses (FAR Case 2004-005)

    This final rule amends FAR 31.205-16 to address the timing of the 
gain or loss recognition of sale and leaseback arrangements of 
contractor depreciable property or other capital assets. The final rule 
defines the disposition date for a sale leaseback arrangement as the 
date the contractor begins to incur an obligation for lease or rental 
costs. Contracting officers, auditors, and contractors with 
responsibilities related to allowable cost determinations involving 
sale and leaseback arrangements of contractor depreciable property or 
other capital assets will be impacted by new policies governing that 
area.

    Dated: May 27, 2005.
Julia B. Wise,
Director, Contract Policy Division.
[FR Doc. 05-11183 Filed 6-7-05; 8:45 am]
BILLING CODE 6820-EP-S