Federal Acquisition Regulation; FAR Case 2005-029, Termination or Cancellation of Purchase Orders, 13586 [07-1356]

Agencies

• General Services Administration
• National Aeronautics and Space Administration
• DEPARTMENT OF DEFENSE

[Federal Register Volume 72, Number 55 (Thursday, March 22, 2007)]
[Rules and Regulations]
[Page 13586]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 07-1356]



[[Page 13586]]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 13

[FAC 2005-16; FAR Case 2005-029; Item II;Docket 2006-0020, Sequence 21]
RIN 9000-AK46


Federal Acquisition Regulation; FAR Case 2005-029, Termination or 
Cancellation of Purchase Orders

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

ACTION: Final rule.

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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 correct the 
inadvertent omission of an appropriate reference pertaining to the 
termination for cause procedures for purchase orders that have been 
accepted in writing.

DATES: Effective Date: March 22, 2007.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Mr. Michael Jackson, Procurement Analyst, at (202) 208-4949. Please 
cite FAC 2005-16, FAR case 2005-029. 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 amend 
FAR 13.302-4 by reinstating the appropriate coverage for termination 
for cause of commercial purchase orders. For commercial purchase orders 
that have been accepted in writing by the contractor, current 
references to FAR 12.403(d) and FAR 52.212-4(l) as stated in 13.302-
4(a) address termination for convenience. The current FAR language at 
13.302-4(a) was established under FAC 97-3, published in the Federal 
Register at 62 FR 64912 on December 9, 1997, and became effective on 
February 9, 1998. This change constituted a complete rewrite and 
reorganization of FAR Part 13. Previously, FAR Part 13 identified both 
termination for cause as well as for convenience as the termination 
methods available to contracting officers. Furthermore, FAR 12.403 
permits the Government to terminate a contract for commercial items 
either for the convenience of the Government or for cause, and makes no 
distinction based on the dollar value of the commercial item contract, 
nor the contractual method utilized to procure the commercial item. 
Therefore, this final rule amends FAR Part 13.302-4(a) by reinstating 
the appropriate coverage for and references to termination for cause of 
commercial purchase orders.
    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 71 FR 14445 on March 22, 2006. The 60-day comment period 
for the proposed rule ended May 22, 2006. One respondent provided a 
comment. This comment is discussed below.
    Public Comment
    Comment: The commenter suggests that the words ``in writing by the 
contractor'' be deleted. The commenter asserts that the beginning of 
performance of work under a purchase order should be recognized as 
contractor acceptance of the purchase order, which in most cases, 
begins on the date of award.
    Response: The scope of this case is the correction of an 
administrative error to re-establish the FAR language for termination 
for cause procedures for purchase orders that have been accepted in 
writing. To revise the case now to include all purchase orders, whether 
accepted in writing or not, would exceed the scope of what was 
published in the proposed rule. The Councils recognize that this issue 
requires additional review and will set up a separate case to address 
it.
    Summary of Changes
    FAR 13.302-4(a) is revised to reinstitute references to procedures 
for termination for cause as well as termination for convenience under 
FAR 12.403 and 52.212-4(l) or (m).
    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 rule does not 
change the Government's existing termination rights but merely 
clarifies those rights by correcting an inadvertent error in the FAR.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose information collection requirements that require 
the approval of the Office of Management and Budget under 44 U.S.C. 
3501, et seq.

List of Subjects in 48 CFR Part 13

    Government procurement.

    Dated: March 15, 2007
Ralph De Stefano,
Director, Contract Policy Division.

0
Therefore, DoD, GSA, and NASA amend 48 CFR part 13 as set forth below:

PART 13--SIMPLIFIED ACQUISITION METHODS

0
1. The authority citation for 48 CFR part 13 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).
0
2. Amend section 13.302-4 by revising paragraphs (a)(1) and (b)(2) to 
read as follows:


13.302-4  Termination or cancellation of purchase orders.

    (a) * * *
    (1) 12.403 and 52.212-4(l) or (m) for commercial items; or
* * * * *
    (b) * * *
    (2) If the contractor does not accept the cancellation or claims 
that costs were incurred as a result of beginning performance under the 
purchase order, the contracting officer shall process the action as a 
termination prescribed in paragraph (a) of this subsection.
[FR Doc. 07-1356 Filed 3-21-07; 8:45 am]
BILLING CODE 6820-EP-S