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Federal Acquisition Circular 97-16; Introduction

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Information about this document as published in the Federal Register.

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


Summary presentation of final and interim rules, and technical amendments.


This document summarizes the Federal Acquisition Regulation (FAR) rules issued by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council in this Federal Acquisition Circular (FAC) 97-16. The Councils drafted these FAR rules using plain language in accordance with the White House memorandum, Plain Language in Government Writing, dated June 1, 1998. The Councils wrote all new and revised text using plain language. A companion document, the Small Entity Compliance Guide (SECG), follows this FAC. The FAC, including the SECG, is available via the Internet at​far.


For effective dates and comment dates, see separate documents which follow.

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The FAR Secretariat, Room 4035, GS Building, Washington, DC 20405, (202) 501-4755 for information pertaining to status or publication schedules. For clarification of content, contact the analyst whose name appears in the table below in relation to each FAR case or subject area. Please cite FAC 97-16 and specific FAR case number(s). Interested parties may also visit our website at​far.

ItemSubjectFAR caseAnalyst
ISmall Business Competitiveness Demonstration Program (Interim)1999-012Moss.
IIProgress Payments and Related Financing Policies1998-400 (98-400)Olson.
IIITechnical Amendments
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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.

Federal Acquisition Circular 97-16 amends the FAR as specified below:

Item I—Small Business Competitiveness Demonstration Program (FAR Case 1999-012)

This interim rule amends FAR Subpart 19.10 to clarify language pertaining to the Small Business Competitiveness Demonstration (Comp. Demo.) Program, consistent with revisions to the Program that were contained in an OFPP and SBA joint final policy directive dated May 25, 1999.

The interim rule—

  • Advises the contracting officer to consider the 8(a) Program and HUBZone Program, in addition to small business set-asides, for acquisitions of $25,000 or less in one of the four designated industry groups that will not be set aside for emerging small business concerns.
  • Adds FAR 19.1006, Exclusions, to specify acquisitions to which Subpart 19.10 does not apply. None of the Small Business Comp. Demo. policies and procedures apply to orders under the Federal Supply Schedule Program or to contracts awarded to educational and nonprofit institutions or governmental entities.

This interim rule only will affect contracting officers at participating agencies when acquiring supplies or services subject to the procedures of the Small Business Comp. Demo. Program. The participating agencies are: Department of Agriculture; Department of Defense, except the National Imagery and Mapping Agency; Department of Energy; Department of Health and Human Services; Department of the Interior; Department of Transportation; Department of Veterans Affairs; Environmental Protection Agency; General Services Administration; and National Aeronautics and Space Administration.

Item II—Progress Payments and Related Financing Policies (FAR Case 1998-400) (98-400)

This final rule revises certain financing policies at FAR Part 32, Contract Financing, and related contract provisions at FAR Part 52. The rule—

  • Emphasizes that performance-based payments are the preferred method of contract financing. Performance-based payments are contract financing payments made after achievement of predetermined goals, such as performance objectives or defined events. Contracting officers should consider performance-based payments and deem their use impracticable before deciding to provide customary progress payments;
  • Permits contracting officers to provide contract financing on contracts awarded to large businesses if the individual contract is $2 million or more. Previously, the threshold in the FAR for financing a contract with a large business was $1 million;
  • Permits a large business to bill the Government for subcontract costs that the large business has incurred but not actually paid, if certain conditions are met. Previously, the FAR permitted only small business concerns to bill for subcontract costs that have been incurred but not paid;
  • Permits the contracting officer to use performance-based payments in contracts for research and development, and in contracts awarded through competitive negotiation procedures; and
  • Is effective on March 27, 2000. However, it is mandatory only for solicitations issued on or after May 26, 2000. Contracting officers may, at their discretion, include the clauses and provisions in this rule in solicitations issued before that date.

Item III—Technical Amendments

These amendments update references and make editorial changes at sections 1.106, 1.201-1, 1.304, 6.305, 9.404, 9.405, 15.404-1, 49.105-2, 52.212-1, 52.217-9, and 52.219-23.

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Dated: March 20, 2000.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

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Federal Acquisition Circular

Federal Acquisition Circular (FAC) 97-16 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.Start Printed Page 16275

All Federal Acquisition Regulation (FAR) changes and other directive material contained in FAC 97-16 are effective March 27, 2000. For Item II, the rule is mandatory for solicitations issued on or after May 26, 2000, but contracting officers may, at their discretion, include the clauses and provisions in soliciations issued before May 26, 2000. For Item I, the rule is applicable to solicitations issued on or after the rule's effective date.

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Dated: March 15, 2000.

R.D. Kerrins, Jr.,

Acting Director, Defense Procurement.

Dated: March 20, 2000.

Sue McIver,

Acting Deputy Associate Administrator, Office of Acquisition Policy, General Services Administration.

Dated: March 16, 2000.

Tom Luedtke,

Associate Administrator for Procurement, National Aeronautics and Space Administration.

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[FR Doc. 00-7307 Filed 3-24-00; 8:45 am]