81_FR_45966 81 FR 45831 - Federal Acquisition Regulation; Federal Acquisition Circular 2005-89; Introduction

81 FR 45831 - Federal Acquisition Regulation; Federal Acquisition Circular 2005-89; Introduction

DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

Federal Register Volume 81, Issue 135 (July 14, 2016)

Page Range45831-45833
FR Document2016-16244

This document summarizes the Federal Acquisition Regulation (FAR) rules agreed to by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) in this Federal Acquisition Circular (FAC) 2005-89. A companion document, the Small Entity Compliance Guide (SECG), follows this FAC. The FAC, including the SECG, is available via the Internet at http://www.regulations.gov.

Federal Register, Volume 81 Issue 135 (Thursday, July 14, 2016)
[Federal Register Volume 81, Number 135 (Thursday, July 14, 2016)]
[Rules and Regulations]
[Pages 45831-45833]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-16244]



[[Page 45831]]

Vol. 81

Thursday,

No. 135

July 14, 2016

Part IV





Department of Defense





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General Services Administration





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National Aeronautics and Space Administration





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48 CFR Chapter 1





Federal Acquisition Regulation; Federal Acquisition Circular 2005-89; 
Introduction, Small Business Improvements, OMB Circular Citation 
Update, FPI Blanket Waiver, Revision to Standard Forms for Bonds, 
Technical Amendments, and Federal Acquisition Circular 2005-89; Small 
Entity Compliance Guide; Final Rules

Federal Register / Vol. 81 , No. 135 / Thursday, July 14, 2016 / 
Rules and Regulations

[[Page 45832]]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1

[Docket No. FAR 2016-0051, Sequence No. 3]


Federal Acquisition Regulation; Federal Acquisition Circular 
2005-89; Introduction

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

ACTION: Summary presentation of final rules.

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

SUMMARY: This document summarizes the Federal Acquisition Regulation 
(FAR) rules agreed to by the Civilian Agency Acquisition Council and 
the Defense Acquisition Regulations Council (Councils) in this Federal 
Acquisition Circular (FAC) 2005-89. A companion document, the Small 
Entity Compliance Guide (SECG), follows this FAC. The FAC, including 
the SECG, is available via the Internet at http://www.regulations.gov.

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

FOR FURTHER INFORMATION CONTACT: The analyst whose name appears in the 
table below in relation to the FAR case. Please cite FAC 2005-89 and 
the specific FAR case number. For information pertaining to status or 
publication schedules, contact the Regulatory Secretariat Division at 
202-501-4755.

                                           Rules Listed in FAC 2005-89
----------------------------------------------------------------------------------------------------------------
              Item                            Subject                 FAR Case                Analyst
----------------------------------------------------------------------------------------------------------------
I...............................  Small Business Subcontracting          2014-003  Uddowla.
                                   Improvements.
II..............................   OMB Circular Citation Update..        2014-023  Hopkins.
III.............................   FPI Blanket Waiver Threshold..        2016-008  Uddowla.
IV..............................   Revision to Standard Forms for        2015-025  Hopkins.
                                   Bonds.
V...............................  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 2005-89 amends the FAR as follows:

Item I--Small Business Subcontracting Improvements (FAR Case 2014-003)

    This final rule amends the FAR to implement SBA's final rule 
published at 78 FR 42391 on July 16, 2013. The rule will implement the 
statutory requirements set forth in section 1321 and 1322 of the Small 
Business Jobs Act of 2010, (Pub. L. 111-240), as well as other 
requirements aimed at improving subcontracting regulations to increase 
small business opportunities. This rule accomplishes the following:
    (1) Requires prime contractors to make good faith efforts to 
utilize their proposed small business subcontractors during performance 
of a contract to the same degree the prime contractor relied on the 
small business in preparing and submitting its bid or proposal. To the 
extent a prime contractor is unable to make a good faith effort to 
utilize its small business subcontractors as described above, the prime 
contractor is required to explain, in writing, within 30 days of 
contract completion, to the contracting officer the reasons why it was 
unable to do so.
    (2) Authorizes contracting officers to calculate subcontracting 
goals in terms of total contract dollars in addition to the required 
goals in terms of total subcontracted dollars.
    (3) Provides contracting officers with the discretion to require a 
subcontracting plan in instances where a small business rerepresents 
its size as an other than small business.
    (4) Requires subcontracting plans even for modifications under the 
subcontracting plan threshold if said modifications would cause the 
contract to exceed the plan threshold.
    (5) Requires prime contractors to assign (North American Industry 
Classification System (NAICS)) codes to subcontracts.
    (6) Restricts prime contractors from prohibiting a subcontractor 
from discussing payment or utilization matters with the contracting 
officer.
    (7) Requires prime contractors to resubmit a corrected 
subcontracting report within 30 days of receiving the contracting 
officer's notice of report rejection.
    (8) Requires prime contractors to provide the socioeconomic status 
of the subcontractor in the notification to unsuccessful offerors for 
subcontracts.
    (9) Requires prime contracts with subcontracting plans on task and 
delivery order contracts to report order level subcontracting 
information after November 2017.
    (10) Facilitates funding agencies receiving small business 
subcontracting credit.
    (11) On indefinite-delivery, indefinite-quantity contracts, allows 
the contracting officer to establish subcontracting goals at the order 
level (but not a new subcontracting plan).
    This rule may have a positive economic impact on any small business 
entity that wishes to participate in the Federal procurement arena as a 
subcontractor.

Item II--OMB Circular Citation Update (FAR Case 2014-023)

    This final rule amends the FAR to update outdated OMB Circular 
citation references. On December 26, 2013, the Office of Management and 
Budget (OMB) published new guidance at 2 CFR part 200 entitled Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements 
for Federal Awards, adopted by Federal agencies as a set of binding 
regulations that became effective December 26, 2014. This new guidance 
supersedes and streamlines requirements from OMB Circulars A-21, A-87, 
A-89, A-102, A-110, A-122, and A-133, as well as the guidance in 
Circular A-50 on Audit Followup. As such, this final rule replaces OMB 
citations in the FAR to the circulars cited above that have been 
superseded. The replacement of these outdated OMB citations in the FAR 
will have no impact on small businesses since the intent of the OMB 
guidance remains unchanged.

[[Page 45833]]

Item III--FPI Blanket Waiver Threshold (FAR Case 2016-008)

    This final rule amends the FAR to increase the blanket waiver 
threshold for small dollar-value purchases from Federal Prison 
Industries (FPI) by Federal agencies from $3,000 to $3,500. No waiver 
is required to buy from an alternative source below $3,500. Customers 
may, however, still purchase from FPI at, or below, this threshold, if 
they so choose.

Item IV--Revision to Standard Forms for Bonds (FAR Case 2015-025)

    This rule amends the FAR to revise five Standard Forms prescribed 
for contracts involving bonds and other financial protections. The 
revisions, aimed at clarifying liability limitations and expanding the 
options for organization types, are made to Standard Forms 24, 25, 25A, 
34, and 35. These changes will minimize questions from industry to the 
contracting officer.
    This final rule does not place any new requirements on small 
entities.

Item V--Technical Amendments

    Editorial changes are made at FAR 4.1801, 4.1803, 52.204-16, 
52.204-17, 52.204-18, 52.204-20, and 52.212-3.

    Dated: June 30, 2016.
William Clark,
Director, Office of Government-wide Acquisition Policy, Office of 
Acquisition Policy, Office of Government-wide Policy.
    Federal Acquisition Circular (FAC) 2005-89 is issued under the 
authority of the Secretary of Defense, the Administrator of General 
Services, and the Administrator for the National Aeronautics and Space 
Administration.
    Unless otherwise specified, all Federal Acquisition Regulation 
(FAR) and other directive material contained in FAC 2005-89 is 
effective July 14, 2016 except for item I which is effective November 
1, 2016, and items II, III, and IV, which are effective August 15, 
2016.

    Dated: July 1, 2016.
Claire M. Grady,
Director, Defense Procurement and Acquisition Policy
    Dated: July 1, 2016.
Jeffrey A. Koses,
Senior Procurement Executive/Deputy CAO, Office of Acquisition Policy, 
U.S. General Services Administration.
    Dated: June 29, 2016.
William G. Roets,
Acting Assistant Administrator, Office of Procurement National 
Aeronautics and Space Administration.
[FR Doc. 2016-16244 Filed 7-13-16; 8:45 am]
 BILLING CODE 6820-EP-P



                                                                                                       Vol. 81                           Thursday,
                                                                                                       No. 135                           July 14, 2016




                                                                                                       Part IV


                                                                                                       Department of Defense


                                                                                                       General Services Administration


                                                                                                       National Aeronautics and Space Administration
                                                                                                       48 CFR Chapter 1
                                                                                                       Federal Acquisition Regulation; Federal Acquisition Circular 2005–89;
                                                                                                       Introduction, Small Business Improvements, OMB Circular Citation Update,
                                                                                                       FPI Blanket Waiver, Revision to Standard Forms for Bonds, Technical
                                                                                                       Amendments, and Federal Acquisition Circular 2005–89; Small Entity
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                                                                                                       Compliance Guide; Final Rules




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                                                 45832                         Federal Register / Vol. 81, No. 135 / Thursday, July 14, 2016 / Rules and Regulations

                                                 DEPARTMENT OF DEFENSE                                                   and National Aeronautics and Space                                  DATES: For effective dates see the
                                                                                                                         Administration (NASA).                                              separate documents, which follow.
                                                 GENERAL SERVICES
                                                 ADMINISTRATION                                                          ACTION:     Summary presentation of final                           FOR FURTHER INFORMATION CONTACT:     The
                                                                                                                         rules.                                                              analyst whose name appears in the table
                                                 NATIONAL AERONAUTICS AND                                                                                                                    below in relation to the FAR case.
                                                 SPACE ADMINISTRATION                                                    SUMMARY:   This document summarizes                                 Please cite FAC 2005–89 and the
                                                                                                                         the Federal Acquisition Regulation                                  specific FAR case number. For
                                                 48 CFR Chapter 1                                                        (FAR) rules agreed to by the Civilian                               information pertaining to status or
                                                                                                                         Agency Acquisition Council and the                                  publication schedules, contact the
                                                 [Docket No. FAR 2016–0051, Sequence                                     Defense Acquisition Regulations                                     Regulatory Secretariat Division at 202–
                                                 No. 3]                                                                  Council (Councils) in this Federal                                  501–4755.
                                                                                                                         Acquisition Circular (FAC) 2005–89. A
                                                 Federal Acquisition Regulation;
                                                 Federal Acquisition Circular 2005–89;                                   companion document, the Small Entity
                                                 Introduction                                                            Compliance Guide (SECG), follows this
                                                                                                                         FAC. The FAC, including the SECG, is
                                                 AGENCY: Department of Defense (DoD),                                    available via the Internet at http://
                                                 General Services Administration (GSA),                                  www.regulations.gov.

                                                                                                                              RULES LISTED IN FAC 2005–89
                                                           Item                                                                          Subject                                                                 FAR Case        Analyst

                                                 I .........................    Small Business Subcontracting Improvements .......................................................................                 2014–003   Uddowla.
                                                 II ........................    OMB Circular Citation Update .................................................................................................     2014–023   Hopkins.
                                                 III .......................    FPI Blanket Waiver Threshold .................................................................................................     2016–008   Uddowla.
                                                 IV .......................     Revision to Standard Forms for Bonds ...................................................................................           2015–025   Hopkins.
                                                 V ........................     Technical Amendments.



                                                 SUPPLEMENTARY INFORMATION:                                              of total contract dollars in addition to                            contracting officer to establish
                                                 Summaries for each FAR rule follow.                                     the required goals in terms of total                                subcontracting goals at the order level
                                                 For the actual revisions and/or                                         subcontracted dollars.                                              (but not a new subcontracting plan).
                                                 amendments made by these rules, refer                                      (3) Provides contracting officers with
                                                                                                                                                                                               This rule may have a positive
                                                 to the specific item numbers and                                        the discretion to require a
                                                                                                                         subcontracting plan in instances where                              economic impact on any small business
                                                 subjects set forth in the documents
                                                                                                                         a small business rerepresents its size as                           entity that wishes to participate in the
                                                 following these item summaries. FAC
                                                                                                                         an other than small business.                                       Federal procurement arena as a
                                                 2005–89 amends the FAR as follows:
                                                                                                                            (4) Requires subcontracting plans                                subcontractor.
                                                 Item I—Small Business Subcontracting                                    even for modifications under the
                                                 Improvements (FAR Case 2014–003)                                                                                                            Item II—OMB Circular Citation Update
                                                                                                                         subcontracting plan threshold if said                               (FAR Case 2014–023)
                                                   This final rule amends the FAR to                                     modifications would cause the contract
                                                 implement SBA’s final rule published at                                 to exceed the plan threshold.                                         This final rule amends the FAR to
                                                 78 FR 42391 on July 16, 2013. The rule                                     (5) Requires prime contractors to                                update outdated OMB Circular citation
                                                 will implement the statutory                                            assign (North American Industry                                     references. On December 26, 2013, the
                                                 requirements set forth in section 1321                                  Classification System (NAICS)) codes to                             Office of Management and Budget
                                                 and 1322 of the Small Business Jobs Act                                 subcontracts.                                                       (OMB) published new guidance at 2
                                                 of 2010, (Pub. L. 111–240), as well as                                     (6) Restricts prime contractors from
                                                                                                                         prohibiting a subcontractor from                                    CFR part 200 entitled Uniform
                                                 other requirements aimed at improving                                                                                                       Administrative Requirements, Cost
                                                 subcontracting regulations to increase                                  discussing payment or utilization
                                                                                                                         matters with the contracting officer.                               Principles, and Audit Requirements for
                                                 small business opportunities. This rule                                                                                                     Federal Awards, adopted by Federal
                                                                                                                            (7) Requires prime contractors to
                                                 accomplishes the following:                                                                                                                 agencies as a set of binding regulations
                                                                                                                         resubmit a corrected subcontracting
                                                   (1) Requires prime contractors to                                     report within 30 days of receiving the                              that became effective December 26,
                                                 make good faith efforts to utilize their                                contracting officer’s notice of report                              2014. This new guidance supersedes
                                                 proposed small business subcontractors                                  rejection.                                                          and streamlines requirements from
                                                 during performance of a contract to the                                    (8) Requires prime contractors to                                OMB Circulars A–21, A–87, A–89, A–
                                                 same degree the prime contractor relied                                 provide the socioeconomic status of the                             102, A–110, A–122, and A–133, as well
                                                 on the small business in preparing and                                  subcontractor in the notification to                                as the guidance in Circular A–50 on
                                                 submitting its bid or proposal. To the                                  unsuccessful offerors for subcontracts.                             Audit Followup. As such, this final rule
                                                 extent a prime contractor is unable to                                     (9) Requires prime contracts with
                                                 make a good faith effort to utilize its                                                                                                     replaces OMB citations in the FAR to
                                                                                                                         subcontracting plans on task and                                    the circulars cited above that have been
                                                 small business subcontractors as                                        delivery order contracts to report order
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                                                 described above, the prime contractor is                                                                                                    superseded. The replacement of these
                                                                                                                         level subcontracting information after
                                                 required to explain, in writing, within                                                                                                     outdated OMB citations in the FAR will
                                                                                                                         November 2017.
                                                 30 days of contract completion, to the                                     (10) Facilitates funding agencies                                have no impact on small businesses
                                                 contracting officer the reasons why it                                  receiving small business subcontracting                             since the intent of the OMB guidance
                                                 was unable to do so.                                                    credit.                                                             remains unchanged.
                                                   (2) Authorizes contracting officers to                                   (11) On indefinite-delivery,
                                                 calculate subcontracting goals in terms                                 indefinite-quantity contracts, allows the


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                                                                    Federal Register / Vol. 81, No. 135 / Thursday, July 14, 2016 / Rules and Regulations                                         45833

                                                 Item III—FPI Blanket Waiver                              DEPARTMENT OF DEFENSE                                 make a good faith effort to utilize its
                                                 Threshold (FAR Case 2016–008)                                                                                  small business subcontractors as
                                                                                                          GENERAL SERVICES                                      described above, the prime contractor is
                                                    This final rule amends the FAR to                     ADMINISTRATION                                        required to explain, in writing, within
                                                 increase the blanket waiver threshold
                                                                                                                                                                30 days of contract completion, to the
                                                 for small dollar-value purchases from                    NATIONAL AERONAUTICS AND                              contracting officer the reasons why it is
                                                 Federal Prison Industries (FPI) by                       SPACE ADMINISTRATION                                  unable to do so.
                                                 Federal agencies from $3,000 to $3,500.                                                                           (2) Authorizing contracting officers to
                                                 No waiver is required to buy from an                     48 CFR Parts 1, 2, 15, 19, and 52                     calculate subcontracting goals in terms
                                                 alternative source below $3,500.                                                                               of total contract dollars in addition to
                                                 Customers may, however, still purchase                   [FAC 2005–89; FAR Case 2014–003; Item
                                                                                                          I; Docket No. 2014–0003; Sequence No. 1]              the required goals in terms of total
                                                 from FPI at, or below, this threshold, if                                                                      subcontracted dollars.
                                                 they so choose.                                          RIN 9000–AM91                                            (3) Providing contracting officers with
                                                 Item IV—Revision to Standard Forms                                                                             the discretion to require a
                                                                                                          Federal Acquisition Regulation; Small                 subcontracting plan in instances where
                                                 for Bonds (FAR Case 2015–025)                            Business Subcontracting                               a small business rerepresents its size as
                                                    This rule amends the FAR to revise                    Improvements                                          an other than small business.
                                                 five Standard Forms prescribed for                                                                                (4) Requiring subcontracting plans
                                                                                                          AGENCY:  Department of Defense (DoD),
                                                 contracts involving bonds and other                                                                            even for modifications under the
                                                                                                          General Services Administration (GSA),
                                                 financial protections. The revisions,                                                                          subcontracting plan threshold if said
                                                                                                          and the National Aeronautics and Space
                                                 aimed at clarifying liability limitations                                                                      modifications would cause the contract
                                                                                                          Administration (NASA).
                                                 and expanding the options for                                                                                  to exceed the plan threshold.
                                                                                                          ACTION: Final rule.
                                                 organization types, are made to                                                                                   (5) Requiring prime contractors to
                                                 Standard Forms 24, 25, 25A, 34, and 35.                  SUMMARY:    DoD, GSA, and NASA are                    assign North American Industry
                                                 These changes will minimize questions                    issuing a final rule amending the                     Classification System (NAICS) codes to
                                                 from industry to the contracting officer.                Federal Acquisition Regulation (FAR) to               subcontracts.
                                                    This final rule does not place any new                implement regulatory changes made by                     (6) Restricting prime contractors from
                                                 requirements on small entities.                          the Small Business Administration,                    prohibiting a subcontractor from
                                                                                                          which provide for a Governmentwide                    discussing payment or utilization
                                                 Item V—Technical Amendments
                                                                                                          policy on small business subcontracting.              matters with the contracting officer.
                                                   Editorial changes are made at FAR                      DATES: Effective: November 1, 2016.                      (7) Requiring prime contractors to
                                                 4.1801, 4.1803, 52.204–16, 52.204–17,                                                                          resubmit a corrected subcontracting
                                                                                                          FOR FURTHER INFORMATION CONTACT: Ms.
                                                 52.204–18, 52.204–20, and 52.212–3.                                                                            report within 30 days of receiving the
                                                                                                          Mahruba Uddowla, Procurement
                                                   Dated: June 30, 2016.                                                                                        contracting officer’s notice of report
                                                                                                          Analyst, at 703–605–2868 for
                                                                                                                                                                rejection.
                                                 William Clark,                                           clarification of content. For information                (8) Requiring prime contractors to
                                                 Director, Office of Government-wide                      pertaining to status or publication                   provide the socioeconomic status of the
                                                 Acquisition Policy, Office of Acquisition                schedules, contact the Regulatory                     subcontractor in the notification to
                                                 Policy, Office of Government-wide Policy.                Secretariat Division at 202–501–4755.                 unsuccessful offerors for subcontracts.
                                                   Federal Acquisition Circular (FAC)                     Please cite FAC 2005–89, FAR Case                        (9) Requiring prime contracts with
                                                 2005–89 is issued under the authority of                 2014–003.                                             subcontracting plans on task and
                                                 the Secretary of Defense, the                            SUPPLEMENTARY INFORMATION:                            delivery order contracts to report order
                                                 Administrator of General Services, and                                                                         level subcontracting information after
                                                 the Administrator for the National                       I. Background
                                                                                                                                                                November 2017.
                                                 Aeronautics and Space Administration.                       DoD, GSA, and NASA published a                        (10) Funding agencies receiving small
                                                   Unless otherwise specified, all                        proposed rule in the Federal Register at              business subcontracting credit.
                                                 Federal Acquisition Regulation (FAR)                     80 FR 32909 on June 10, 2015. The                        (11) On indefinite-delivery,
                                                 and other directive material contained                   proposed rule discussed regulatory                    indefinite-quantity contracts, the
                                                 in FAC 2005–89 is effective July 14,                     changes made by the Small Business                    contracting officer may establish
                                                 2016 except for item I which is effective                Administration (SBA) in its final rule                subcontracting goals at the order level
                                                 November 1, 2016, and items II, III, and                 published at 78 FR 42391, on July 16,                 (but not a new subcontracting plan).
                                                 IV, which are effective August 15, 2016.                 2013, concerning small business                          Twenty-seven respondents submitted
                                                                                                          subcontracting. SBA’s final rule                      comments on the proposed rule.
                                                   Dated: July 1, 2016.
                                                                                                          implements the statutory requirements
                                                 Claire M. Grady,                                                                                               II. Discussion and Analysis
                                                                                                          in sections 1321 and 1322 of the Small
                                                 Director, Defense Procurement and                        Business Jobs Act of 2010 (Pub. L. 111–                 The Civilian Agency Acquisition
                                                 Acquisition Policy
                                                                                                          240), as well as other changes aimed at               Council and the Defense Acquisition
                                                   Dated: July 1, 2016.                                   improving subcontracting regulations to               Regulations Council (the Councils)
                                                 Jeffrey A. Koses,                                        increase small business opportunities.                reviewed the public comments in the
                                                 Senior Procurement Executive/Deputy CAO,                 The changes being implemented in this                 development of the final rule. A
                                                 Office of Acquisition Policy, U.S. General               final rule include the following:                     discussion of the comments received
                                                 Services Administration.                                    (1) Requiring prime contractors to                 and the changes made to the rule as a
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                                                   Dated: June 29, 2016.                                  make good faith efforts to utilize their              result of those comments are provided
                                                 William G. Roets,                                        proposed small business subcontractors                as follows:
                                                 Acting Assistant Administrator, Office of                during performance of a contract to the
                                                 Procurement National Aeronautics and Space               same degree the prime contractor relied               A. Summary of Significant Changes
                                                 Administration.                                          on the small business in preparing and                  This final rule makes the following
                                                 [FR Doc. 2016–16244 Filed 7–13–16; 8:45 am]              submitting its bid or proposal. To the                significant changes from the proposed
                                                 BILLING CODE 6820–EP–P                                   extent a prime contractor is unable to                rule:


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Document Created: 2016-07-14 01:54:45
Document Modified: 2016-07-14 01:54:45
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
ActionSummary presentation of final rules.
DatesFor effective dates see the separate documents, which follow.
ContactThe analyst whose name appears in the table below in relation to the FAR case. Please cite FAC 2005-89 and the specific FAR case number. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755.
FR Citation81 FR 45831 

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