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Federal Acquisition Regulation; Small Entity Compliance Guide

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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).


Small Entity Compliance Guide.


This document is issued under the joint authority of the Secretary of Defense, the Administrator of General Services and the Administrator for the National Aeronautics and Space Administration. This Small Entity Compliance Guide has been prepared in accordance with Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996. It consists of a summary of rules appearing in Federal Acquisition Circular (FAC) 2005-05 which amend the FAR. An asterisk (*) next to a rule indicates that a regulatory flexibility analysis has been prepared. Interested parties may obtain further information regarding these rules by referring to FAC 2005-05 which precedes this document. These documents are also available via the Internet at​far.

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

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List of Rules in FAC 2005-05

ItemSubjectFAR caseAnalyst
IDefinition of Information Technology (Interim)2004-030Davis.
IIDocumentation Requirement for Limited Sources under Federal Supply Schedules2005-004Nelson.
IIIPayment Withholding2004-003Olson.
*IVConfirmation of HUBZone Certification (Interim)2005-009Cundiff.
VGovernment Property Rental and Special Tooling2002-015Parnell.
VITechnical Amendment
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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.

FAC 2005-05 amends the FAR as specified below:

Item I—Definition of Information Technology(FAR Case 2004-030)

This interim rule amends FAR 2.101(b) to revise the definition of “information technology” to reflect the recent changes to the definition resulting from the enactment of Public Law 108-199.

The new language at Section 535(b) of Division F of Public law 108-199 permanently revises the term “information technology,” which is defined at 40 U.S.C. 11101, to add “analysis” and “evaluation” and to clarify the term “ancillary equipment.” This permanent change to the terminology necessitated this interim rule to amend the FAR.

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Item II—Documentation Requirement for Limited Sources under Federal Supply Schedules (FAR Case 2005-004)

On June 18, 2004, DoD, GSA, and NASA published FAR case 1999-603 (69 FR 34231) amending the FAR to incorporate ordering procedures for orders against Federal Supply Schedules (FSS), including the documentation requirements for justifying sole source orders. The rule inadvertently established these justification and approval requirements for sole source orders instead of when an ordering activity restricts consideration of schedule contractors to less than the required number. This rule corrects that oversight. The final rule also based the content of the documentation requirements on that in FAR 6.303-2. By doing so, the rule established some unintentional and inapplicable content requirements, especially for orders under the simplified acquisition threshold (SAT). This rule corrects those unintended changes by establishing the standard for justifying restricted orders under the SAT and accurately specifying the justification content for restricted orders above the SAT. The rule will clarify the procedures for ordering activities.

Item III—Payment Withholding (FAR Case 2004-003)

Contracting officers and contracting officer's representatives who award or administer Time-and-Materials or Labor-Hour contracts or orders should be familiar with this amendment. Also, contractor personnel who are responsible for managing invoicing for those types of contracts should be aware of this new requirement. The amendment removes the mandatory requirement that a contracting officer withhold 5 percent of the payments due under a time-and-materials contract, unless it is necessary to withhold payment to protect the Government's interest or otherwise prescribed in the contract Schedule. It requires the use of a contract modification in order to make payment withholding and, in the event withholding is required, the contractor is responsible to withhold the amounts from its billings.

Item IV—Confirmation of HUBZone Certification(FAR Case 2005-009)

This interim rule amends FAR 19.703 and the clause at 52.219-9 to clarify that prime contractors must confirm that a subcontractor representing itself as a Historically Underutilized Business Zone (HUBZone) small business concern is certified, consistent with the requirements of 15 U.S.C. 632 et seq., as amended. This change is expected to increase subcontracting opportunities for certified HUBZone small business concerns and ensure accurate reporting of awards to HUBZone small business concerns under Government contracts.

Item V—Government Property Rental and Special Tooling(FAR Case 2002-015)

This final rule amends FAR Parts 45 and 52 to clarify the basis for determining rental charges for the use of Government property. The change, which is intended to promote the dual use of such property, will impact contracting officers and property administrators responsible for the management of Government property and contractors that desire to use Government property for commercial purposes.

Item VI—Technical Amendment

An editorial change is made at FAR 4.1102 in order to update a reference.

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Dated: July 20, 2005.

Julia B. Wise,

Director, Contract Policy Division.

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[FR Doc. 05-14672 Filed 7-26-05; 8:45 am]