80_FR_38440 80 FR 38313 - Federal Acquisition Regulation; Federal Acquisition Circular 2005-83; Small Entity Compliance Guide

80 FR 38313 - Federal Acquisition Regulation; Federal Acquisition Circular 2005-83; Small Entity Compliance Guide

DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

Federal Register Volume 80, Issue 127 (July 2, 2015)

Page Range38313-38314
FR Document2015-16218

This document is issued under the joint authority of DOD, GSA, and NASA. 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 the rules appearing in Federal Acquisition Circular (FAC) 2005-83, which amends the Federal Acquisition Regulation (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 2005-83, which precedes this document. These documents are also available via the Internet at http:// www.regulations.gov.

Federal Register, Volume 80 Issue 127 (Thursday, July 2, 2015)
[Federal Register Volume 80, Number 127 (Thursday, July 2, 2015)]
[Rules and Regulations]
[Pages 38313-38314]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-16218]



[[Page 38313]]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1

[Docket No. FAR 2015-0051, Sequence No. 3]


Federal Acquisition Regulation; Federal Acquisition Circular 
2005-83; 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 DOD, GSA, 
and NASA. 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 the rules 
appearing in Federal Acquisition Circular (FAC) 2005-83, which amends 
the Federal Acquisition Regulation (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 2005-83, which precedes this document. 
These documents are also available via the Internet at http://www.regulations.gov.

DATES: July 2, 2015.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
the analyst whose name appears in the table below. Please cite FAC 
2005-83 and the FAR case number. For information pertaining to status 
or publication schedules, contact the Regulatory Secretariat at 202-
501-4755.

                       Rules Listed in FAC 2005-83
------------------------------------------------------------------------
      Item               Subject           FAR Case          Analyst
------------------------------------------------------------------------
I *.............  Inflation Adjustment        2014-022  Jackson.
                   of Acquisition-
                   Related Thresholds.
II..............  Prohibition on              2015-006  Jackson.
                   Contracting With
                   Inverted Domestic
                   Corporations--Repre
                   sentation and
                   Notification.
III.............  Update to Product           2015-008  Jackson.
                   and Service Codes.
*IV.............  Clarification on            2014-020  Jackson.
                   Justification for
                   Urgent
                   Noncompetitive
                   Awards Exceeding
                   One Year.
V...............  Prohibition on              2014-017  Jackson.
                   Contracting with
                   Inverted Domestic
                   Corporations.
VI..............  Permanent Authority         2015-010  Jackson.
                   for Use of
                   Simplified
                   Acquisition
                   Procedures for
                   Certain Commercial
                   Items.
VII.............  Technical Amendments
------------------------------------------------------------------------


SUPPLEMENTARY INFORMATION: Summaries for each FAR rule follow. For the 
actual revisions and/or amendments made by these rules, refer to the 
specific item numbers and subjects set forth in the documents following 
these item summaries. FAC 2005-83 amends the FAR as specified below:

Item I--Inflation Adjustment of Acquisition-Related Thresholds (FAR 
Case 2014-022)

    This final rule amends the FAR to implement 41 U.S.C. 1908, which 
requires an adjustment every five years of acquisition-related 
thresholds for inflation using the Consumer Price Index for all urban 
consumers, except the Construction Wage Rate Requirements statute 
(Davis-Bacon Act), Service Contract Labor Standards statute, and trade 
agreements thresholds (see FAR 1.109). As a matter of policy, DoD, GSA, 
and NASA also use the same methodology to adjust nonstatutory FAR 
acquisition-related thresholds.
    This is the third review of FAR acquisition-related thresholds. The 
Councils published a proposed rule in the Federal Register at 79 FR 
70141 on November 25, 2014.
    There is no change in the final rule from the proposed frequently-
used thresholds identified in the proposed rule:
     The micro-purchase base threshold of $3,000 (FAR 2.101) is 
increased to $3,500.
     The simplified acquisition threshold (FAR 2.101) of 
$150,000 is unchanged.
     The FedBizOpps preaward and post-award notices (FAR part 
5) remain at $25,000 because of trade agreements.
     The threshold for use of simplified acquisition procedures 
for acquisition of commercial items (FAR 13.500) is raised from $6.5 
million to $7 million.
     The cost or pricing data threshold (FAR 15.403-4) and the 
statutorily equivalent Cost Accounting Standard threshold are raised 
from $700,000 to $750,000.
     The prime contractor subcontracting plan (FAR 19.702) 
floor is raised from $650,000 to $700,000, and the construction 
threshold of $1.5 million stays the same.
     The threshold for reporting first-tier subcontract 
information including executive compensation will increase from $25,000 
to $30,000 (FAR subpart 4.14 and 52.204-10).

Item II--Prohibition on Contracting With Inverted Domestic 
Corporations--Representation and Notification (FAR Case 2015-006)

    This final rule amends the provision and clause of the FAR that 
address the continuing Government-wide statutory prohibition (in effect 
since fiscal year 2008) on the award of contracts using appropriated 
funds to any foreign incorporated entity that is an inverted domestic 
corporation (under section 835 of the Homeland Security Act of 2002, 
codified at 6 U.S.C. 395) or to any subsidiary of such entity. In 
particular, this rule modifies the existing representation at FAR 
52.209-2 and adds a requirement in the clause at 52.209-10 to notify 
the contracting officer if the contractor becomes an inverted domestic 
corporation, or a subsidiary of an inverted domestic corporation, 
during performance of the contract.
    This rule will not have any significant effect on most contractors, 
because few contractors are expected to become an inverted domestic 
corporation or a subsidiary of an inverted domestic corporation during 
contract performance. Small business concerns are particularly unlikely 
to have been incorporated in the United States and then reincorporated 
in a tax haven.

Item III--Update to Product and Service Codes (FAR Case 2015-008)

    DoD, GSA, and NASA are revising the FAR to update the descriptions 
of the Federal product and service codes to conform to the Federal 
Procurement Data System Product and Service Codes Manual, August 2011 
Edition. There is no change to the groups covered, and

[[Page 38314]]

the new descriptions better reflect product coverage.
    This final rule is not required to be published for public comment, 
because it does not change the Federal Supply Groups covered, but just 
updates the descriptions of the listed product service groups to 
reflect the current Product and Service Codes Manual. It does not 
impact which products are subject to the service contract labor 
standards or trade agreements.

Item IV--Clarification on Justification for Urgent Noncompetitive 
Awards Exceeding One Year (FAR Case 2014-020)

    DoD, GSA, and NASA are issuing a final rule amending the FAR to 
clarify when a justification for noncompetitive contracts based on 
urgency, exceeding one year, is needed. The rule comes as a response to 
Government Accountability Office (GAO) report GAO-14-304, entitled 
Federal Contracting: Noncompetitive Contracts Based on Urgency Need 
Additional Oversight, dated March 2014.
    This rule is not expected to have a significant impact on small 
businesses. Contracting officers will benefit from this rule because it 
clarifies when determinations of exceptional circumstances are needed 
when awarding a noncompetitive contract on the basis of unusual and 
compelling urgency, exceeding one year, either at time of award or 
modified after contract award.

Item V--Prohibition on Contracting With Inverted Domestic Corporations 
(FAR Case 2014-017)

    This rule converts to a final rule, without change, an interim rule 
that amended the provisions of the FAR that address the continuing 
Governmentwide statutory prohibition (in effect since fiscal year 2008) 
on the award of contracts using appropriated funds to any foreign 
incorporated entity that is an inverted domestic corporation (under 
section 835 of the Homeland Security Act of 2002, codified at 6 U.S.C. 
395) or to any subsidiary of such entity. The interim rule amended FAR 
9.108 to revise the FAR coverage, including the language of 
solicitation provisions and contract clauses, so that it more clearly 
reflects the ongoing, continuing nature of the statutory prohibition on 
contracting with inverted domestic corporations and their subsidiaries.
    This rule does not have an effect on small business because this 
rule will only impact an offeror that is a foreign incorporated entity 
that is treated as an inverted domestic corporation and wants to do 
business with the Government. Small business concerns are unlikely to 
have been incorporated in the United States and then reincorporated in 
a tax haven.

Item VI--Permanent Authority for Use of Simplified Acquisition 
Procedures for Certain Commercial Items (FAR Case 2015-010)

    This is a final rule to amend FAR subparts 13.5 and 18.2 to 
implement section 815 of the Carl Levin and Howard P. `Buck' McKeon 
National Defense Authorization Act for Fiscal Year 2015 (Pub. L. 113-
291). Section 815 amends section 4202(e) of the Clinger-Cohen Act of 
1996 (Divisions D and E of Pub. L. 104-106; 10 U.S.C. 2304 note) to 
make permanent the test program for special simplified procedures for 
purchases of commercial items greater than the simplified acquisition 
threshold, but not exceeding $6.5 million ($12 million for certain 
acquisitions). This final rule is not required to be published for 
public comment because it makes permanent a statutory authority that 
currently exists within the FAR. The rule will not have a significant 
impact on small business or on Government contracting officers.

Item VII--Technical Amendments

    Editorial changes are made at FAR 15.404-2(b)(2), 52.204-16(b)(3), 
52.204-18(d), and 52.212-5(e)(1)(ii)(E).

    Dated: June 18, 2015.
William Clark,
Director, Office of Government-wide Acquisition Policy, Office of 
Acquisition Policy, Office of Government-wide Policy.
[FR Doc. 2015-16218 Filed 7-1-15; 8:45 am]
 BILLING CODE 6820-EP-P



                                                                               Federal Register / Vol. 80, No. 127 / Thursday, July 2, 2015 / Rules and Regulations                                                             38313

                                                  DEPARTMENT OF DEFENSE                                                 and National Aeronautics and Space                               further information regarding these
                                                                                                                        Administration (NASA).                                           rules by referring to FAC 2005–83,
                                                  GENERAL SERVICES                                                      ACTION: Small Entity Compliance Guide.                           which precedes this document. These
                                                  ADMINISTRATION                                                                                                                         documents are also available via the
                                                                                                                        SUMMARY:   This document is issued                               Internet at http://www.regulations.gov.
                                                  NATIONAL AERONAUTICS AND                                              under the joint authority of DOD, GSA,
                                                  SPACE ADMINISTRATION                                                  and NASA. This Small Entity                                      DATES:     July 2, 2015.
                                                                                                                        Compliance Guide has been prepared in                            FOR FURTHER INFORMATION CONTACT:      For
                                                  48 CFR Chapter 1                                                      accordance with section 212 of the                               clarification of content, contact the
                                                                                                                        Small Business Regulatory Enforcement
                                                  [Docket No. FAR 2015–0051, Sequence                                                                                                    analyst whose name appears in the table
                                                                                                                        Fairness Act of 1996. It consists of a
                                                  No. 3]                                                                                                                                 below. Please cite FAC 2005–83 and the
                                                                                                                        summary of the rules appearing in
                                                                                                                        Federal Acquisition Circular (FAC)                               FAR case number. For information
                                                  Federal Acquisition Regulation;                                                                                                        pertaining to status or publication
                                                  Federal Acquisition Circular 2005–83;                                 2005–83, which amends the Federal
                                                                                                                        Acquisition Regulation (FAR). An                                 schedules, contact the Regulatory
                                                  Small Entity Compliance Guide                                                                                                          Secretariat at 202–501–4755.
                                                                                                                        asterisk (*) next to a rule indicates that
                                                  AGENCIES: Department of Defense (DoD),                                a regulatory flexibility analysis has been
                                                  General Services Administration (GSA),                                prepared. Interested parties may obtain

                                                                                                                             RULES LISTED IN FAC 2005–83
                                                         Item                                                                          Subject                                                                 FAR Case       Analyst

                                                  I * ...................    Inflation Adjustment of Acquisition–Related Thresholds ................................................................             2014–022   Jackson.
                                                  II ....................    Prohibition on Contracting With Inverted Domestic Corporations—Representation and Notifica-                                         2015–006   Jackson.
                                                                                tion.
                                                  III ...................    Update to Product and Service Codes ...........................................................................................     2015–008   Jackson.
                                                  *IV .................      Clarification on Justification for Urgent Noncompetitive Awards Exceeding One Year .................                                2014–020   Jackson.
                                                  V ...................      Prohibition on Contracting with Inverted Domestic Corporations ...................................................                  2014–017   Jackson.
                                                  VI ..................      Permanent Authority for Use of Simplified Acquisition Procedures for Certain Commercial Items                                       2015–010   Jackson.
                                                  VII .................      Technical Amendments.



                                                  SUPPLEMENTARY INFORMATION:                                               • The micro-purchase base threshold                           2008) on the award of contracts using
                                                  Summaries for each FAR rule follow.                                   of $3,000 (FAR 2.101) is increased to                            appropriated funds to any foreign
                                                  For the actual revisions and/or                                       $3,500.                                                          incorporated entity that is an inverted
                                                  amendments made by these rules, refer                                    • The simplified acquisition                                  domestic corporation (under section 835
                                                  to the specific item numbers and                                      threshold (FAR 2.101) of $150,000 is                             of the Homeland Security Act of 2002,
                                                  subjects set forth in the documents                                   unchanged.                                                       codified at 6 U.S.C. 395) or to any
                                                  following these item summaries. FAC                                      • The FedBizOpps preaward and                                 subsidiary of such entity. In particular,
                                                  2005–83 amends the FAR as specified                                   post-award notices (FAR part 5) remain                           this rule modifies the existing
                                                  below:                                                                at $25,000 because of trade agreements.                          representation at FAR 52.209–2 and
                                                                                                                           • The threshold for use of simplified                         adds a requirement in the clause at
                                                  Item I—Inflation Adjustment of                                        acquisition procedures for acquisition of                        52.209–10 to notify the contracting
                                                  Acquisition-Related Thresholds (FAR                                   commercial items (FAR 13.500) is raised                          officer if the contractor becomes an
                                                  Case 2014–022)                                                        from $6.5 million to $7 million.                                 inverted domestic corporation, or a
                                                     This final rule amends the FAR to                                     • The cost or pricing data threshold                          subsidiary of an inverted domestic
                                                  implement 41 U.S.C. 1908, which                                       (FAR 15.403–4) and the statutorily                               corporation, during performance of the
                                                  requires an adjustment every five years                               equivalent Cost Accounting Standard                              contract.
                                                  of acquisition-related thresholds for                                 threshold are raised from $700,000 to
                                                                                                                                                                                            This rule will not have any significant
                                                  inflation using the Consumer Price                                    $750,000.
                                                                                                                           • The prime contractor                                        effect on most contractors, because few
                                                  Index for all urban consumers, except                                                                                                  contractors are expected to become an
                                                  the Construction Wage Rate                                            subcontracting plan (FAR 19.702) floor
                                                                                                                        is raised from $650,000 to $700,000, and                         inverted domestic corporation or a
                                                  Requirements statute (Davis-Bacon Act),                                                                                                subsidiary of an inverted domestic
                                                  Service Contract Labor Standards                                      the construction threshold of $1.5
                                                                                                                        million stays the same.                                          corporation during contract
                                                  statute, and trade agreements thresholds                                                                                               performance. Small business concerns
                                                                                                                           • The threshold for reporting first-tier
                                                  (see FAR 1.109). As a matter of policy,                                                                                                are particularly unlikely to have been
                                                                                                                        subcontract information including
                                                  DoD, GSA, and NASA also use the same                                                                                                   incorporated in the United States and
                                                                                                                        executive compensation will increase
                                                  methodology to adjust nonstatutory FAR                                                                                                 then reincorporated in a tax haven.
                                                                                                                        from $25,000 to $30,000 (FAR subpart
                                                  acquisition-related thresholds.
                                                                                                                        4.14 and 52.204–10).                                             Item III—Update to Product and
                                                     This is the third review of FAR
                                                                                                                                                                                         Service Codes (FAR Case 2015–008)
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                                                  acquisition-related thresholds. The                                   Item II—Prohibition on Contracting
                                                  Councils published a proposed rule in                                 With Inverted Domestic Corporations—                               DoD, GSA, and NASA are revising the
                                                  the Federal Register at 79 FR 70141 on                                Representation and Notification (FAR                             FAR to update the descriptions of the
                                                  November 25, 2014.                                                    Case 2015–006)                                                   Federal product and service codes to
                                                     There is no change in the final rule                                  This final rule amends the provision                          conform to the Federal Procurement
                                                  from the proposed frequently-used                                     and clause of the FAR that address the                           Data System Product and Service Codes
                                                  thresholds identified in the proposed                                 continuing Government-wide statutory                             Manual, August 2011 Edition. There is
                                                  rule:                                                                 prohibition (in effect since fiscal year                         no change to the groups covered, and


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                                                  38314               Federal Register / Vol. 80, No. 127 / Thursday, July 2, 2015 / Rules and Regulations

                                                  the new descriptions better reflect                      Item V—Prohibition on Contracting                     Item VI—Permanent Authority for Use
                                                  product coverage.                                        With Inverted Domestic Corporations                   of Simplified Acquisition Procedures
                                                     This final rule is not required to be                 (FAR Case 2014–017)                                   for Certain Commercial Items (FAR
                                                  published for public comment, because                                                                          Case 2015–010)
                                                  it does not change the Federal Supply                       This rule converts to a final rule,
                                                                                                           without change, an interim rule that                     This is a final rule to amend FAR
                                                  Groups covered, but just updates the                                                                           subparts 13.5 and 18.2 to implement
                                                  descriptions of the listed product                       amended the provisions of the FAR that
                                                                                                                                                                 section 815 of the Carl Levin and
                                                  service groups to reflect the current                    address the continuing
                                                                                                                                                                 Howard P. ‘Buck’ McKeon National
                                                  Product and Service Codes Manual. It                     Governmentwide statutory prohibition
                                                                                                                                                                 Defense Authorization Act for Fiscal
                                                  does not impact which products are                       (in effect since fiscal year 2008) on the             Year 2015 (Pub. L. 113–291). Section
                                                  subject to the service contract labor                    award of contracts using appropriated                 815 amends section 4202(e) of the
                                                  standards or trade agreements.                           funds to any foreign incorporated entity              Clinger-Cohen Act of 1996 (Divisions D
                                                  Item IV—Clarification on Justification                   that is an inverted domestic corporation              and E of Pub. L. 104–106; 10 U.S.C.
                                                  for Urgent Noncompetitive Awards                         (under section 835 of the Homeland                    2304 note) to make permanent the test
                                                  Exceeding One Year (FAR Case 2014–                       Security Act of 2002, codified at 6                   program for special simplified
                                                  020)                                                     U.S.C. 395) or to any subsidiary of such              procedures for purchases of commercial
                                                                                                           entity. The interim rule amended FAR                  items greater than the simplified
                                                     DoD, GSA, and NASA are issuing a
                                                                                                           9.108 to revise the FAR coverage,                     acquisition threshold, but not exceeding
                                                  final rule amending the FAR to clarify
                                                                                                           including the language of solicitation                $6.5 million ($12 million for certain
                                                  when a justification for noncompetitive
                                                                                                           provisions and contract clauses, so that              acquisitions). This final rule is not
                                                  contracts based on urgency, exceeding
                                                  one year, is needed. The rule comes as                   it more clearly reflects the ongoing,                 required to be published for public
                                                  a response to Government                                 continuing nature of the statutory                    comment because it makes permanent a
                                                  Accountability Office (GAO) report                       prohibition on contracting with inverted              statutory authority that currently exists
                                                  GAO–14–304, entitled Federal                             domestic corporations and their                       within the FAR. The rule will not have
                                                  Contracting: Noncompetitive Contracts                    subsidiaries.                                         a significant impact on small business
                                                  Based on Urgency Need Additional                                                                               or on Government contracting officers.
                                                                                                              This rule does not have an effect on
                                                  Oversight, dated March 2014.                             small business because this rule will                 Item VII—Technical Amendments
                                                     This rule is not expected to have a                   only impact an offeror that is a foreign                Editorial changes are made at FAR
                                                  significant impact on small businesses.                  incorporated entity that is treated as an             15.404–2(b)(2), 52.204–16(b)(3), 52.204–
                                                  Contracting officers will benefit from                   inverted domestic corporation and                     18(d), and 52.212–5(e)(1)(ii)(E).
                                                  this rule because it clarifies when                      wants to do business with the
                                                  determinations of exceptional                                                                                    Dated: June 18, 2015.
                                                                                                           Government. Small business concerns
                                                  circumstances are needed when                                                                                  William Clark,
                                                                                                           are unlikely to have been incorporated
                                                  awarding a noncompetitive contract on                    in the United States and then                         Director, Office of Government-wide
                                                  the basis of unusual and compelling                                                                            Acquisition Policy, Office of Acquisition
                                                                                                           reincorporated in a tax haven.                        Policy, Office of Government-wide Policy.
                                                  urgency, exceeding one year, either at
                                                  time of award or modified after contract                                                                       [FR Doc. 2015–16218 Filed 7–1–15; 8:45 am]
                                                  award.                                                                                                         BILLING CODE 6820–EP–P
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Document Created: 2015-12-15 13:15:23
Document Modified: 2015-12-15 13:15:23
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionSmall Entity Compliance Guide.
DatesJuly 2, 2015.
ContactFor clarification of content, contact the analyst whose name appears in the table below. Please cite FAC 2005-83 and the FAR case number. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202- 501-4755.
FR Citation80 FR 38313 

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