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Federal Register / Vol. 71, No.

188 / Thursday, September 28, 2006 / Rules and Regulations 57357

$3,000, because the simplified Item VII—Exception to the Buy Dated: September 19, 2006.
acquisition threshold will not be raised American Act for Commercial Ralph De Stefano,
at this time. Other frequently used Information Technology (FAR Case Director, Contract Policy Division.
thresholds that are adjusted include— 2005-022)
Federal Acquisition Circular
• The FPDS reporting threshold (FAR This final rule converts the interim Federal Acquisition Circular (FAC)
4.602(c)) will be raised from $2,500 to rule published at 71 FR 223, January 3, 2005-13 is issued under the authority of
$3,000. 2006, to a final rule without change. the Secretary of Defense, the
• Commercial Items test program This final rule amends FAR 25.103 and Administrator of General Services, and
ceiling (FAR 13.500) will be raised from Subpart 25.11 to implement Section the Administrator for the National
$5,000,000 to $5,500,000. 535(a) of Division F of the Consolidated Aeronautics and Space Administration.
• The cost and pricing data threshold Appropriations Act, 2004, and similar Unless otherwise specified, all
(FAR 15.403-4) will be raised from sections in subsequent appropriations Federal Acquisition Regulation (FAR)
$550,000 to $650,000. acts. Section 535(a) authorizes an and other directive material contained
exception to the Buy American Act for in FAC 2005-13 is effective September
The prime contractor subcontracting 28, 2006.
plan (FAR 19.702) floor will be raised acquisitions of information technology
from $500,000 to $550,000, but for that are commercial items. The final Dated: September 19, 2006.
construction ($1,000,000) is unchanged. rule applies to all offerors responding to Roger D. Waldron,
solicitations for commercial information Acting Senior Procurement Executive,
Item V—Trade Agreements–Thresholds technology where the Buy American Act General Services Administration.
(FAR Case 2005-030) previously applied (generally,
Dated: September 8, 2006.
acquisitions between the micro-
This final rule converts the interim Shay D. Assad,
purchase threshold and $193,000). The
rule published at 71 FR 864, January 5, effect of this exemption is that the
Director, Defense Procurement and
2006, to a final rule without change. Acquisition Policy.
following clauses are no longer
This rule changes the thresholds for applicable in acquisition of commercial Dated: September 12, 2006.
application of the World Trade information technology: Thomas Luedtke,
Organization Government Procurement Assistant Administrator for Procurement,
Agreement and the other Free Trade • FAR 52.225-1, Buy American Act–
National Aeronautics and Space
Agreements with Canada, Mexico, Supplies,
Administration.
Chile, Singapore, and Australia. These • FAR 52.225-2, Buy American Act [FR Doc. 06–8199 Filed 9–27–06; 8:45 am]
threshold increases occur every two Certificate, BILLING CODE 6820–EP–S
years in order to keep pace with • FAR 52.225-3, Buy American Act–
inflation. Free Trade Agreements–Israeli Trade
Act, DEPARTMENT OF DEFENSE
Item VI—Reporting of Purchases from
Overseas Sources (Interim) (FAR Case • FAR 52.225-4, Buy American Act– GENERAL SERVICES
2005-034) Free Trade Agreements–Israeli Trade ADMINISTRATION
Act Certificate.
This interim rule amends FAR Part 25 NATIONAL AERONAUTICS AND
and adds a provision in FAR 52.225 to This is because the Buy American Act
no longer applies. The Free Trade SPACE ADMINISTRATION
implement Section 837 of Division A of
the Transportation, Treasury, Housing Agreement non-discriminatory
provisions are no longer necessary since 48 CFR Parts 5, 6, 8, 11, and 13
and Urban Development, the Judiciary,
the District of Columbia, and all products now are treated without the
[FAC 2005–13; FAR Case 2005–037; Item
Independent Agencies Appropriations restrictions of the Buy American Act. I; Docket 2006–0020, Sequence 10]
Act, 2006 (Pub. L. 109-115). Section 837 The Trade Agreements provision and
requires the head of each Federal agency clause at FAR 52.225–5 and FAR RIN 9000–AK55
to submit a report to Congress relating 52.225–6 are still necessary when the
Federal Acquisition Regulation; FAR
to acquisitions of articles, materials, or Trade Agreements Act applies
Case 2005–037, Implement OMB Policy
supplies that are manufactured outside (acquisitions above $193,000). The
on the Use of Brand Name
the United States. The new provision Trade Agreements provision and clause Specifications
requests from offerors necessary data already waive applicability of the Buy
regarding place of manufacture. The American Act for eligible products and AGENCIES: Department of Defense (DoD),
new provisions will require an offeror to are needed to implement the restrictions General Services Administration (GSA),
indicate whether the place of on procurement of noneligible end and National Aeronautics and Space
manufacture of the end products it products. Section 535 and subsequent Administration (NASA).
expects to provide in response to the similar sections waived only the Buy ACTION: Interim rule with request for
solicitation is predominantly inside or American Act, not all restrictions on the comments.
outside the United States. Whenever the purchase of foreign information
SUMMARY: The Civilian Agency
place of manufacture for a contract is technology.
Acquisition Council and the Defense
coded outside the United States, the Item VIII—Technical Amendments Acquisition Regulations Council
contracting officer will be required to
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(Councils) have agreed to amend the


enter into Federal Procurement Data Editorial changes are made at FAR 1, Federal Acquisition Regulation (FAR) to
System (FPDS) the reason for buying 3, 4, 5, 7, 13, 26, 33, 49, 50, 52, and 53 require agencies to publish on the
items manufactured outside the United in order to update references. Governmentwide point of entry (GPE) or
States. e-Buy the documentation required by

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57358 Federal Register / Vol. 71, No. 188 / Thursday, September 28, 2006 / Rules and Regulations

the FAR to support the use of brand the contract solicitation. While the for quotation (RFQ) when using the FSS.
name specifications. justifications are generally available However, some agencies use
DATES: Effective Date: September 28, upon request, posting the brand name commercial companies such as FedBid
2006. justifications will improve the overall to post the RFQs for FSS purchases and
Comment Date: Interested parties transparency of the acquisition process. FedBid posts the RFQ to FedBizOpps
should submit written comments to the Contracting officers must be sensitive instead of e-Buy. Should agencies be
FAR Secretariat on or before November when dealing with proprietary allowed to post the brand name
27, 2006 to be considered in the information when posting justifications. justification to FedBizOpps instead of e-
formulation of a final rule. FAR 6.305 requires contracting officers Buy when they use FedBid or another
ADDRESSES: Submit comments to carefully screen all justifications for commercial company to post an RFQ for
identified by FAC 2005–13, FAR case contractor proprietary information and FSS purchases? If an alternative posting
2005–037, by any of the following remove such information before making solution is used, will OMB be able to
methods: available to the public. Contracting obtain a report on the use of these brand
• Federal eRulemaking Portal: officers are to adhere to the exemptions name justifications, if necessary?
http://www.regulations.gov. Search on disclosure of information contained 2. The OMB memorandum requires
for this document at the ‘‘Federal in the Freedom of Information Act (5 agencies to post brand name
Acquisition Regulation’’ agency and U.S.C. 552) and the prohibitions against justifications for orders against the FSS
review the ‘‘Document Title’’ column; disclosure in FAR 24.202 in but not for orders against indefinite-
click on the Document ID number. Click determining the information that should delivery contracts including GWACS.
on ‘‘Add Comments’’. be removed. Agencies can avoid the posting
You may also search for any The OMB memorandum applies to all requirement simply by purchasing on an
document using the ‘‘Advanced search/ acquisitions exceeding $25,000 that use indefinite-delivery contract instead of
document search’’ tab, selecting from brand name specifications, including the FSS. Should agencies be required to
the agency field ‘‘Federal Acquisition open market purchases, purchases from post brand name justifications for orders
the Federal Supply Schedules (FSS) against indefinite-delivery contracts? If
Regulation’’, and typing the FAR case
program, and sole source procurements. yes, where is the best place to post the
number in the keyword field.
• Fax: 202–501–4067. Contracting officers should not use justification?
• Mail: General Services other contract vehicles instead of the 3. Should agencies be required to post
Administration, Regulatory Secretariat FSS program when it is not in the best brand name justifications for orders
(VIR), 1800 F Street, NW, Room 4035, interest of the Government to do so, just issued on the SmartBuy program and
ATTN: Laurieann Duarte, Washington, to circumvent the brand name posting other strategic sourcing vehicles?
DC 20405. requirement. 4. Should agencies be required to post
To implement the OMB brand name justifications to renew
Instructions: Please submit comments
memorandum, the Councils are software license agreements that are
only and cite FAC 2005–13, FAR case
amending the FAR to add a requirement required to receive software updates?
2005–037, in all correspondence related
to publish on the GPE or e-Buy the This is not a significant regulatory
to this case. All comments received will
documentation required by the FAR to action and, therefore, was not subject to
be posted without change to http://
support the use of brand name review under Section 6(b) of Executive
www.regulations.gov, including any
specifications. The proposed changes Order 12866, Regulatory Planning and
personal and/or business confidential
require— Review, dated September 30, 1993. This
information provided. • For brand name orders against the rule is not a major rule under 5 U.S.C.
FOR FURTHER INFORMATION CONTACT For FSS program, posting to e-Buy the 804.
clarification of content, contact Ms. documentation or justification required
Cecelia L. Davis, Procurement Analyst, by FAR 8.405–6. The rule also restricts B. Regulatory Flexibility Act
at (202) 219–0202. Please cite FAC the use of oral orders over $25,000 The interim rule is not expected to
2005–13, FAR case 2005–037. For against the FSS that contain brand have a significant economic impact on
information pertaining to status or specifications. a substantial number of small entities
publication schedules, contact the FAR • For non-FSS acquisitions, including within the meaning of the Regulatory
Secretariat at (202) 501–4755. simplified acquisitions, posting to the Flexibility Act, 5 U.S.C. 601, et seq.,
SUPPLEMENTARY INFORMATION: Federal Business Opportunities website because the rule adds no new
(www.fedbizopps.gov) the justification requirements for contractors. The rule
A. Background
or documentation required by FAR requires agencies to post documentation
On April 11, 2005, the Office of 11.105. required by the FAR to the GPE or e-
Management and Budget (OMB) issued OMB issued a second memorandum Buy. An Initial Regulatory Flexibility
a memorandum on the use of brand on April 17, 2006 to provide additional Analysis (IRFA) has therefore not been
name specifications to reinforce the implementation guidance to agencies prepared. The Councils will consider
need to maintain vendor and technology when publicizing the brand name comments from small entities
neutral contract specifications. To justification which reflects the approach concerning the affected FAR Parts 5, 6,
provide for maximum competition, above. In response to OMB’s 8, 11, and 13 in accordance with 5
solicitations should limit the use of memoranda, agencies submitted several U.S.C. 610. Interested parties must
brand name specifications. As a general comments and questions on the posting submit such comments separately and
rule, contract specifications should requirement and the requirement for the should cite 5 U.S.C 601, et seq. (FAC
emphasize the necessary physical, brand name justifications. The questions 2005–13, FAR case 2005–037), in
functional, and performance and comments are summarized below correspondence.
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characteristics of a product - ;not brand and the Councils invite interested


names. OMB encouraged agencies to parties to comment on these questions. C. Paperwork Reduction Act
take steps to mitigate brand name usage 1. The OMB memorandum requires The Paperwork Reduction Act does
and requested agencies to publicize the agencies to post the brand name not apply because the changes to the
justification for use of brand name with justification to e-Buy with the request FAR do not impose information

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Federal Register / Vol. 71, No. 188 / Thursday, September 28, 2006 / Rules and Regulations 57359

collection requirements that require the (c) * * * See 5.102(a)(6) for the (d)* * *;
approval of the Office of Management requirement to post the brand name (1) Review (except see (c)(2) of this
and Budget under 44 U.S.C. 3501, et justification. * * * subsection) the pricelists of additional
seq. * * * * * schedule contractors (the GSA
Advantage! on-line shopping service
D. Determination to Issue an Interim
PART 8—REQUIRED SOURCES OF can be used to facilitate this review);
Rule
SUPPLIES AND SERVICES * * * * *
A determination has been made under ■ 6. Amend section 8.405–6 by—
the authority of the Secretary of Defense ■ 4. Amend section 8.402 by— ■ a. Revising paragraph (a) and the
(DoD), the Administrator of General ■ a. Adding to paragraph (c)(2) ‘‘(except introductory text of paragraph (b);
Services (GSA), and the Administrator see 8.405–6)’’ after ‘‘contractors’’; and ■ b. Removing paragraph (b)(3);
of the National Aeronautics and Space ■ b. Adding to paragraph (d) a new ■ c. Redesignating paragraph (b)(4) as
Administration (NASA) that urgent and sentence after the second sentence to (b)(3);
compelling reasons exist to promulgate read as follows: ■ d. Revising paragraph (c);
this interim rule without prior ■ e. Redesignating paragraphs (d), (e),
8.402 General.
opportunity for public comment. This and (f) as (f), (g) and (h) respectively;
action is necessary to limit the use of * * * * * ■ f. Adding new paragraphs (d) and (e);
brand name specifications and provide (d)* * * Ordering activities shall post ■ g. Removing from the newly
for maximum competition. However, an RFQ to e-Buy when an order contains designated paragraph (f) ‘‘of schedule
pursuant to Public Law 98–577 and FAR brand name specifications (see 8.405–6). contractors to fewer than required in
1.501, the Councils will consider public *** 8.405–1 or 8.405–2’’;
comments received in response to this * * * * * ■ h. Removing from newly designated
interim rule in the formation of the final ■ 5. Amend section 8.405–1 by revising paragraph (g)(2)(iv) ‘‘8.405–6(b)’’ and
rule. paragraphs (c) and (d)(1) to read as adding ‘‘8.405–6(a) and (b)’’ in its place;
follows: ■ i. Revising newly designated
List of Subjects in 48 CFR Parts 5, 6, 8,
11, and 13. paragraph (g)(2)(viii);
8.405–1 Ordering procedures for supplies, ■ j. Removing from newly designated
Government procurement. and services not requiring a statement of
work.
paragraph (h)(2) ‘‘(f)(3) or (f)(4)’’ and
Dated: September 19, 2006. adding ‘‘(h)(3) or (h)(4)’’ in its place; and
* * * * * ■ k. Removing from newly designated
Ralph De Stefano,
(c) Orders exceeding the micro- paragraph (h)(3)(iii) ‘‘(f)(4)’’ and adding
Director, Contract Policy Division. purchase threshold but not exceeding ‘‘(h)(4)’’ in its place.
■ Therefore, DoD, GSA, and NASA the maximum order threshold. (1) The revised and added text reads as
amend 48 CFR parts 5, 6, 8, 11, and 13 Ordering activities shall place orders follows:
as set forth below: with the schedule contractor that can
■ 1. The authority citation for 48 CFR provide the supply or service that 8.405–6 Limited sources justification and
parts 5, 6, 8, 11, and 13 continues to represents the best value. Before placing approval.
read as follows: an order, an ordering activity shall (a) Orders placed under Federal
Authority: 40 U.S.C. 121(c); 10 U.S.C. consider reasonably available Supply Schedules are exempt from the
chapter 137; and 42 U.S.C. 2473(c). information about the supply or service requirements in Part 6. However, an
offered under MAS contracts by ordering activity must justify its action
PART 5—PUBLICIZING CONTRACT surveying at least three schedule when restricting consideration—
ACTIONS contractors through the GSA Advantage! (1) Of schedule contractors to fewer
■ 2. Amend section 5.102 by adding on-line shopping service, or by than required in 8.405–1 or 8.405–2; or
paragraph (a)(6) to read as follows: reviewing the catalogs or pricelists of at (2) To an item peculiar to one
least three schedule contractors (see manufacturer (e.g., a particular brand
5.102 Availability of solicitations. 8.405–5). name, product, or a feature of a product,
(a)(1) * * * (2) When an order contains brand peculiar to one manufacturer). A brand
* * * * * name specifications, the contracting name item, whether available on one or
(6) When an acquisition contains officer shall post the Request for Quote more schedule contracts, is an item
brand name specifications, the (RFQ) along with the justification or peculiar to one manufacturer. Brand
contracting officer shall include with documentation as required by 8.405–6. name specifications shall not be used
the solicitation the justification or (3) In addition to price, when unless the particular brand name,
documentation required by 6.302–1(c), determining best value, the ordering product, or feature is essential to the
13.106–1(b), or 13.501, redacted as activity may consider, among other Government’s requirements, and market
necessary (see 6.305). factors, the following: research indicates other companies’
* * * * * (i) Past performance. similar products, or products lacking
(ii) Special features of the supply or the particular feature, do not meet, or
PART 6—COMPETITION service required for effective program cannot be modified to meet, the
REQUIREMENTS performance. agency’s needs.
(iii) Trade-in considerations. (b) Circumstances that may justify
■ 3. Amend section 6.302–1 in restriction cited in paragraph (a)(1) of
paragraph (c) by adding a new sentence (iv) Probable life of the item selected
as compared with that of a comparable this subsection include—
before the last sentence to read as
follows: item. * * * * *
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(v) Warranty considerations. (c) Ordering activities shall procure


6.302–1 Only one responsible source and (vi) Maintenance availability. such requirements only if the need to do
no other supplies or services will satisfy (vii) Environmental and energy so is justified in writing and approved
agency requirements. efficiency considerations. at the levels specified in paragraphs (f)
* * * * * (viii) Delivery terms. and (h) of this subsection.

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57360 Federal Register / Vol. 71, No. 188 / Thursday, September 28, 2006 / Rules and Regulations

(d) Except as provided in paragraph ■ b. Amending newly redesignated ■ c. Amending paragraphs (a)(1)(ii) and
(e) of this subsection, when an order paragraph (a)(2)(i) by removing ‘‘and’’ (a)(2) by adding ‘‘(including brand
contains brand name specifications, the from the end of the paragraph and name)’’ after ‘‘sole source’’.
ordering activity shall post the adding ‘‘or’’ in its place; and [FR Doc. 06–8200 Filed 9–27–06; 8:45 am]
following information along with the ■ c. Revising newly redesignated BILLING CODE 6820–EP–S
Request for Quotation (RFQ) to e-Buy paragraph (a)(2)(ii).
(http://www.ebuy.gsa.gov): The revised and added text reads as
(1) For proposed orders exceeding follows: DEPARTMENT OF DEFENSE
$25,000, but not exceeding the
simplified acquisition threshold, the 11.105 Items peculiar to one manufacturer. GENERAL SERVICES
documentation required by paragraph (f) * * * * * ADMINISTRATION
of this subsection. (a)(1) * * *
(2) For proposed orders exceeding the (2)(i) * * * NATIONAL AERONAUTICS AND
simplified acquisition threshold, the (ii) The basis for not providing for SPACE ADMINISTRATION
justification required by paragraph (g) of maximum practicable competition is
this subsection. documented in the file (see 13.106–1(b)) 48 CFR Parts 1, 2, 7, 11, 31, and 39
(e) The posting requirement of or justified (see 13.501) when the
paragraph (d) of this subsection does not [FAC 2005–13; FAR Case 2004–018; Item
acquisition is awarded using simplified
II; Docket 2006–0020, Sequence 16]
apply when— acquisition procedures.
(1) Disclosure would compromise the (3) The documentation or justification RIN 9000–AK29
national security (e.g., would result in is posted for acquisitions over $25,000.
disclosure of classified information) or (See 5.102(a)(6).) Federal Acquisition Regulation; FAR
create other security risks. The fact that (b) For multiple award schedule Case 2004–018, Information
access to classified matter may be orders, see 8.405–6. Technology Security
necessary to submit a proposal or
AGENCIES: Department of Defense (DoD),
perform the contract does not, in itself, PART 13—SIMPLIFIED ACQUISITION
General Services Administration (GSA),
justify use of this exception; PROCEDURES
(2) The nature of the file (e.g., size, and National Aeronautics and Space
format) does not make it cost-effective ■ 9. Amend section 13.105 by adding Administration (NASA).
or practicable for contracting officers to paragraph (c) to read as follows: ACTION: Final rule.
provide access through e-Buy; or 13.105 Synopsis and posting SUMMARY: The Civilian Agency
(3) The agency’s senior procurement requirements. Acquisition Council and the Defense
executive makes a written
* * * * * Acquisition Regulations Council
determination that access through e-Buy
(c) See 5.102(a)(6) for the requirement (Councils) have agreed to adopt as final
is not in the Government’s interest.
to post a brand name justification or without change, the interim rule
* * * * * documentation required by 13.106–1(b) amending the Federal Acquisition
(g) * * * or 13.501. Regulation (FAR) to implement the
(2) * * * ■ 10. Amend section 13.106–1 by—
(viii) A statement of the actions, if Information Technology (IT) Security
■ a. Amending paragraph (b)(1) by provisions of the Federal Information
any, the agency may take to remove or
adding ‘‘brand name’’ after Security Management Act of 2002
overcome any barriers that led to the
‘‘agreements,’’; (FISMA) (Title III of Public Law 107–
restricted consideration before any
■ b. Amending paragraph (b)(2) by 347, the E-Government Act of 2002 (E-
subsequent acquisition for the supplies
adding ‘‘(including brand name)’’ after Gov Act)).
or services is made.
‘‘For sole source’’; and DATES: Effective Date: September 28,
* * * * * ■ c. Adding a new paragraph (b)(3) to
■ 7. Amend section 8.406–1 by revising
2006.
read as follows—
the first sentence of the introductory FOR FURTHER INFORMATION CONTACT: For
text to read as follows: 13.106–1 Soliciting competition. clarification of content, contact Ms.
* * * * * Cecelia Davis, Procurement Analyst, at
8.406–1 Order placement.
(b) * * * (202) 219–0202. Please cite FAC 2005–
Ordering activities may place orders 13, FAR case 2004–018. For information
(3) See 5.102(a)(6) for the requirement
orally (except for services requiring a pertaining to status or publication
to post the brand name justification or
statement of work (SOW) or orders schedules, contact the FAR Secretariat
containing brand name specifications documentation.
* * * * * at (202) 501–4755.
that exceed $25,000) or use Optional
SUPPLEMENTARY INFORMATION:
Form 347, an agency-prescribed form, or 13.106–3 [Amended]
an established electronic A. Background
communications format to order ■ 11. Amend section 13.106–3 in
paragraph (b)(3)(i) by adding ‘‘(see DoD, GSA, and NASA published an
supplies or services from schedule interim rule in the Federal Register at
contracts. * * * 13.106–1 for brand name purchases)’’
after ‘‘competition’’. 70 FR 57449, September 30, 2005 to
* * * * * implement the Information Technology
13.501 [Amended] (IT) Security provisions of the Federal
PART 11—DESCRIBING AGENCY ■ 12. Amend section 13.501 by— Information Security Management Act
NEEDS ■ a. Amending the paragraph heading in of 2002 (FISMA) (Title III of Public Law
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■ 8. Amend section 11.105 by— paragraph (a) by adding ‘‘(including 107–347, the E-Government Act of 2002
■ a. Redesignating paragraphs (a), (b), brand name)’’ after ‘‘Sole source’’; (E-Gov Act)). There was a correction
and (c) as (a)(1), (a)(2)(i), and (a)(2)(ii) ■ b. Amending paragraph (a)(1)(i) by published in the Federal Register at 70
respectively; and adding new adding ‘‘(including brand name)’’ after FR 69100, November 14, 2005, deleting
paragraphs (a)(3) and (b); ‘‘2.101,’’; and the definition at FAR 2.101 of

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