Federal Acquisition Regulation; Elimination of Certain Subcontract Notification Requirements, 11761-11762 [05-4092]

Download as PDF Federal Register / Vol. 70, No. 45 / Wednesday, March 9, 2005 / Rules and Regulations flexibly-priced contracts and subcontracts as follows: (i) When the costs that were accumulated under the noncompliant practice exceed the costs that would have been accumulated using a compliant practice (from the time the noncompliant practice was first implemented until the date the noncompliant practice was replaced with a compliant practice), the difference is increased cost to the Government. (ii) When the costs that were accumulated under the noncompliant practice are less than the costs that would have been accumulated using a compliant practice (from the time the noncompliant practice was first implemented until the date the noncompliant practice was replaced with a compliant practice), the difference is decreased cost to the Government. (4) Calculate the total increase or decrease in contract and subcontracts incentives, fees, and profits associated with the increased or decreased cost to the Government in accordance with 48 CFR 9903.306(c). The associated increase or decrease is based on the difference between the negotiated incentives, fees, and profits and the amounts that would have been negotiated had the Contractor used a compliant practice. (5) Calculate the increased cost to the Government in the aggregate. (j) If the Contractor does not submit the information required by paragraph (b) or (c) of this clause within the specified time, or any extension granted by the CFAO, the CFAO may take one or both of the following actions: (1) Withhold an amount not to exceed 10 percent of each subsequent amount payment to the Contractor’s affected CAS-covered contracts, (up to the estimated general dollar magnitude of the cost impact), until such time as the Contractor provides the required information to the CFAO. (2) Issue a final decision in accordance with FAR 33.211 and unilaterally adjust the contract(s) by the estimated amount of the cost impact. (k) Agree to— (1) Contract modifications to reflect adjustments required in accordance with paragraph (a)(4)(ii) or (a)(5) of the clauses at FAR 52.230–2 and 52.230–5; or with paragraph (a)(3)(i) or (a)(4) of the clause at FAR 52.230–3; and (2) Repay the Government for any aggregate increased cost paid to the Contractor. (l) For all subcontracts subject to the clauses at FAR 52.230–2, 52.230–3, or 52.230–5— (1) So state in the body of the subcontract, in the letter of award, or in both (do not use self-deleting clauses); (2) Include the substance of this clause in all negotiated subcontracts; and (3) Within 30 days after award of the subcontract, submit the following information to the Contractor’s CFAO: (i) Subcontractor’s name and subcontract number. (ii) Dollar amount and date of award. (iii) Name of Contractor making the award. (m) Notify the CFAO in writing of any adjustments required to subcontracts under this contract and agree to an adjustment to VerDate jul<14>2003 16:48 Mar 08, 2005 Jkt 205001 this contract price or estimated cost and fee. The Contractor shall— (1) Provide this notice within 30 days after the Contractor receives the proposed subcontract adjustments; and (2) Include a proposal for adjusting the higher-tier subcontract or the contract appropriately. (n) For subcontracts containing the clause or substance of the clause at FAR 52.230–2, FAR 52.230–3, or FAR 52.230–5, require the subcontractor to comply with all Standards in effect on the date of award or of final agreement on price, as shown on the subcontractor’s signed Certificate of Current Cost or Pricing Data, whichever is earlier. (End of clause) 9. Add section 52.230–7 to read as follows: I 52.230–7 Proposal Disclosure—Cost Accounting Practice Changes. As prescribed in 30.201–3(c), insert the following provision: Proposal Disclosure—Cost Accounting Practice Changes (Apr 2005) The offeror shall check ‘‘yes’’ below if the contract award will result in a required or unilateral change in cost accounting practice, including unilateral changes requested to be desirable changes. b Yes b No If the offeror checked ‘‘Yes’’ above, the offeror shall— (1) Prepare the price proposal in response to the solicitation using the changed practice for the period of performance for which the practice will be used; and (2) Submit a description of the changed cost accounting practice to the Contracting Officer and the Cognizant Federal Agency Official as pricing support for the proposal. (End of provision) [FR Doc. 05–4093 Filed 3–8–05; 8:45 am] BILLING CODE 6820–EP–P DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 44 and 52 [FAC 2005–01; FAR Case 2003–024; Item VII] 11761 Interim rule with request for comments. ACTION: SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) have agreed to amend the Federal Acquisition Regulation language regarding advance notification requirements. This change is required to implement Section 842 of the National Defense Authorization Act for Fiscal Year 2004, Public Law 108–136, which resulted in revisions to 10 U.S.C. 2306(e). Effective Date: March 9, 2005. Comment Date: Interested parties should submit comments to the FAR Secretariat at the address shown below on or before May 9, 2005 to be considered in the formulation of a final rule. ADDRESSES: Submit comments identified by FAC 2005–01, FAR case 2003–024 by any of the following methods: • Federal eRulemaking Portal: http:// www.regulations.gov. Follow the instructions for submitting comments. • Agency Web Site: http:// www.acqnet.gov/far/ProposedRules/ proposed.htm. Click on the FAR case number to submit comments. • E-mail: farcase.2003–024@gsa.gov. Include FAC 2005–01, FAR case 2003– 024 in the subject line of the message. • Fax: 202–501–4067. • Mail: General Services Administration, Regulatory Secretariat (VIR), 1800 F Street, NW., Room 4035, ATTN: Laurieann Duarte, Washington, DC 20405. Instructions: Please submit comments only and cite FAC 2005–01, FAR case 2003–024, in all correspondence related to this case. All comments received will be posted without change to http:// www.acqnet.gov/far/ProposedRules/ proposed.htm, including any personal information provided. FOR FURTHER INFORMATION CONTACT The FAR Secretariat at (202) 501–4755, for information pertaining to status or publication schedules. For clarification of content, contact Ms. Rhonda Cundiff, at (202) 501–0044. Please cite FAC 2005–01, FAR case 2003–024. SUPPLEMENTARY INFORMATION: DATES: RIN 9000–AK10 A. Background Federal Acquisition Regulation; Elimination of Certain Subcontract Notification Requirements This rule revises FAR 44.201–2, Advance notification requirements, and amends Alternate I of FAR clause 52.244–2, Subcontracts. This change is required in order to implement Section 842 of the National Defense Authorization Act for Fiscal Year 2004, Public Law 108–136. Section 842 AGENCIES: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). PO 00000 Frm 00027 Fmt 4701 Sfmt 4700 E:\FR\FM\09MRR2.SGM 09MRR2 11762 Federal Register / Vol. 70, No. 45 / Wednesday, March 9, 2005 / Rules and Regulations removes the requirement for contractors under cost-reimbursement contracts with the Department of Defense (DoD), Coast Guard, and National Aeronautics and Space Administration (NASA) to notify the agency before the award of any cost-plus-fixed-fee subcontract or any fixed-price subcontract that exceeds the greater of the simplified acquisition threshold or 5 percent of the total estimated cost of the contract if the contractor maintains a purchasing system approved by the contracting officer for the contract. In addition, the rule makes a technical amendment to Alternate II of FAR clause 52.244–2, Subcontracts. The rule deletes the reference to paragraph (c) from paragraph (f)(2) of Alternate II because paragraph (c) applies to fixed price type contracts, whereas Alternate II applies to cost-reimbursement contracts. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804. B. Regulatory Flexibility Act This interim rule is not expected to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because it will have a small positive effect. Also, small businesses do not usually hold prime contracts which are cost-reimbursement contracts, so this section would not apply to them, and any changes would not apply. Therefore, an Initial Regulatory Flexibility Analysis has not been performed. We invite comments from small business concerns and other interested parties. The Councils will consider comments from small entities concerning the affected FAR Parts 44 and 52 in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C 601, et seq. (FAC 2005–01, FAR case 2003–024), in correspondence. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply because the changes to the FAR do not impose information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq. D. Determination to Issue an Interim Rule A determination has been made under the authority of the Secretary of Defense VerDate jul<14>2003 16:48 Mar 08, 2005 Jkt 205001 (DoD), the Administrator of General Services (GSA), and the Administrator of the National Aeronautics and Space Administration (NASA) that urgent and compelling reasons exist to promulgate this interim rule without prior opportunity for public comment. This action is necessary to implement Section 842 of the National Defense Authorization Act for Fiscal Year 2004, Public Law 108–136, which went into effect November 24, 2003, and which resulted in revisions to 10 U.S.C. 2306 (e). However, pursuant to Public Law 98–577 and FAR 1.501, the Councils will consider public comments received in response to this interim rule in the formation of the final rule. List of Subjects in 48 CFR Parts 44 and 52 Government procurement. Dated: February 24, 2005. Rodney P. Lantier, Director, Contract Policy Division. Therefore, DoD, GSA, and NASA amend 48 CFR parts 44 and 52 as set forth below: I 1. The authority citation for 48 CFR parts 44 and 52 is revised to read as follows: I Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c). PART 44—SUBCONTRACTING POLICIES AND PROCEDURES 2. Revise section 44.201–2 to read as follows: I Under cost-reimbursement contracts, the contractor is required by statute to notify the contracting officer as follows: (a) For the Department of Defense, the Coast Guard, and the National Aeronautics and Space Administration, unless the contractor maintains an approved purchasing system, 10 U.S.C. 2306 requires notification before the award of any cost-plus-fixed-fee subcontract, or any fixed-price subcontract that exceeds the greater of the simplified acquisition threshold or 5 percent of the total estimated cost of the contract. (b) For civilian agencies other than the Coast Guard and the National Aeronautics and Space Administration, even if the contractor has an approved purchasing system, 41 U.S.C. 254(b) requires notification before the award of any cost-plus-fixed-fee subcontract, or any fixed-price subcontract that exceeds either the simplified acquisition threshold or 5 percent of the total estimated cost of the contract. Frm 00028 Fmt 4701 Sfmt 4700 3. Amend section 52.244–2— a. In Alternate I, by removing ‘‘(Aug 1998)’’ and adding ‘‘(MAR 2005)’’ in its place, and revising the first sentence of paragraph (f)(2); and I b. In Alternate II, by removing ‘‘(Aug 1998)’’ and adding ‘‘(MAR 2005)’’ in its place, and in paragraph (f)(2) by removing ‘‘(c), (d),’’ and adding ‘‘(d)’’ in its place. The revised text reads as follows: I I 52.244–2 Subcontracts. * * * * * Alternate I * * * (f)(2) Unless the Contractor maintains an approved purchasing system, the Contractor shall notify the Contracting Officer reasonably in advance of entering into any (i) cost-plus-fixed-fee subcontract, or (ii) fixed-price subcontract that exceeds the greater of the simplified acquisition threshold or 5 percent of the total estimated cost of this contract. * * * [FR Doc. 05–4092 Filed 3–8–05; 8:45 am] BILLING CODE 6820–EP–S DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Part 44 44.201–2 Advance notification requirements. PO 00000 PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES [FAC 2005–01; FAR Case 2002–021; Item VIII] RIN 9000–AJ75 Federal Acquisition Regulation; Use of FAR Clause 52.244–6, Subcontracts for Commercial Items Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Final rule. AGENCIES: SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) have agreed on a final rule amending the Federal Acquisition Regulation (FAR) to require that the FAR clause, Subcontracts for Commercial Items, be inserted in solicitations and contracts other than those for commercial items. DATES: Effective Date: March 9, 2005. FOR FURTHER INFORMATION CONTACT The FAR Secretariat at (202) 501–4755 for E:\FR\FM\09MRR2.SGM 09MRR2

Agencies

[Federal Register Volume 70, Number 45 (Wednesday, March 9, 2005)]
[Rules and Regulations]
[Pages 11761-11762]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-4092]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 44 and 52

[FAC 2005-01; FAR Case 2003-024; Item VII]
RIN 9000-AK10


Federal Acquisition Regulation; Elimination of Certain 
Subcontract Notification Requirements

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

ACTION: Interim rule with request for comments.

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

SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (the Councils) have agreed to amend the 
Federal Acquisition Regulation language regarding advance notification 
requirements. This change is required to implement Section 842 of the 
National Defense Authorization Act for Fiscal Year 2004, Public Law 
108-136, which resulted in revisions to 10 U.S.C. 2306(e).

DATES: Effective Date: March 9, 2005.
    Comment Date: Interested parties should submit comments to the FAR 
Secretariat at the address shown below on or before May 9, 2005 to be 
considered in the formulation of a final rule.

ADDRESSES: Submit comments identified by FAC 2005-01, FAR case 2003-024 
by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Agency Web Site: http://www.acqnet.gov/far/ProposedRules/
proposed.htm. Click on the FAR case number to submit comments.
     E-mail: farcase.2003-024@gsa.gov. Include FAC 2005-01, FAR 
case 2003-024 in the subject line of the message.
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (VIR), 1800 F Street, NW., Room 4035, ATTN: Laurieann 
Duarte, Washington, DC 20405.
    Instructions: Please submit comments only and cite FAC 2005-01, FAR 
case 2003-024, in all correspondence related to this case. All comments 
received will be posted without change to http://www.acqnet.gov/far/
ProposedRules/proposed.htm, including any personal information 
provided.

FOR FURTHER INFORMATION CONTACT The FAR Secretariat at (202) 501-4755, 
for information pertaining to status or publication schedules. For 
clarification of content, contact Ms. Rhonda Cundiff, at (202) 501-
0044. Please cite FAC 2005-01, FAR case 2003-024.

SUPPLEMENTARY INFORMATION:

A. Background

    This rule revises FAR 44.201-2, Advance notification requirements, 
and amends Alternate I of FAR clause 52.244-2, Subcontracts. This 
change is required in order to implement Section 842 of the National 
Defense Authorization Act for Fiscal Year 2004, Public Law 108-136. 
Section 842

[[Page 11762]]

removes the requirement for contractors under cost-reimbursement 
contracts with the Department of Defense (DoD), Coast Guard, and 
National Aeronautics and Space Administration (NASA) to notify the 
agency before the award of any cost-plus-fixed-fee subcontract or any 
fixed-price subcontract that exceeds the greater of the simplified 
acquisition threshold or 5 percent of the total estimated cost of the 
contract if the contractor maintains a purchasing system approved by 
the contracting officer for the contract.
    In addition, the rule makes a technical amendment to Alternate II 
of FAR clause 52.244-2, Subcontracts. The rule deletes the reference to 
paragraph (c) from paragraph (f)(2) of Alternate II because paragraph 
(c) applies to fixed price type contracts, whereas Alternate II applies 
to cost-reimbursement contracts.
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule is 
not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    This interim rule is not expected to have a significant economic 
impact on a substantial number of small entities within the meaning of 
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because it will 
have a small positive effect. Also, small businesses do not usually 
hold prime contracts which are cost-reimbursement contracts, so this 
section would not apply to them, and any changes would not apply. 
Therefore, an Initial Regulatory Flexibility Analysis has not been 
performed. We invite comments from small business concerns and other 
interested parties. The Councils will consider comments from small 
entities concerning the affected FAR Parts 44 and 52 in accordance with 
5 U.S.C. 610. Interested parties must submit such comments separately 
and should cite 5 U.S.C 601, et seq. (FAC 2005-01, FAR case 2003-024), 
in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose information collection requirements that require 
the approval of the Office of Management and Budget under 44 U.S.C. 
3501, et seq.

D. Determination to Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DoD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that urgent and compelling reasons exist to promulgate this 
interim rule without prior opportunity for public comment. This action 
is necessary to implement Section 842 of the National Defense 
Authorization Act for Fiscal Year 2004, Public Law 108-136, which went 
into effect November 24, 2003, and which resulted in revisions to 10 
U.S.C. 2306 (e). However, pursuant to Public Law 98-577 and FAR 1.501, 
the Councils will consider public comments received in response to this 
interim rule in the formation of the final rule.

List of Subjects in 48 CFR Parts 44 and 52

    Government procurement.

    Dated: February 24, 2005.
Rodney P. Lantier,
Director, Contract Policy Division.

0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 44 and 52 as set forth 
below:
0
1. The authority citation for 48 CFR parts 44 and 52 is revised to read 
as follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 44--SUBCONTRACTING POLICIES AND PROCEDURES

0
2. Revise section 44.201-2 to read as follows:


44.201-2  Advance notification requirements.

    Under cost-reimbursement contracts, the contractor is required by 
statute to notify the contracting officer as follows:
    (a) For the Department of Defense, the Coast Guard, and the 
National Aeronautics and Space Administration, unless the contractor 
maintains an approved purchasing system, 10 U.S.C. 2306 requires 
notification before the award of any cost-plus-fixed-fee subcontract, 
or any fixed-price subcontract that exceeds the greater of the 
simplified acquisition threshold or 5 percent of the total estimated 
cost of the contract.
    (b) For civilian agencies other than the Coast Guard and the 
National Aeronautics and Space Administration, even if the contractor 
has an approved purchasing system, 41 U.S.C. 254(b) requires 
notification before the award of any cost-plus-fixed-fee subcontract, 
or any fixed-price subcontract that exceeds either the simplified 
acquisition threshold or 5 percent of the total estimated cost of the 
contract.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
3. Amend section 52.244-2--
0
a. In Alternate I, by removing ``(Aug 1998)'' and adding ``(MAR 2005)'' 
in its place, and revising the first sentence of paragraph (f)(2); and
0
b. In Alternate II, by removing ``(Aug 1998)'' and adding ``(MAR 
2005)'' in its place, and in paragraph (f)(2) by removing ``(c), (d),'' 
and adding ``(d)'' in its place. The revised text reads as follows:


52.244-2  Subcontracts.

* * * * *
    Alternate I * * *
    (f)(2) Unless the Contractor maintains an approved purchasing 
system, the Contractor shall notify the Contracting Officer reasonably 
in advance of entering into any (i) cost-plus-fixed-fee subcontract, or 
(ii) fixed-price subcontract that exceeds the greater of the simplified 
acquisition threshold or 5 percent of the total estimated cost of this 
contract. * * *
[FR Doc. 05-4092 Filed 3-8-05; 8:45 am]
BILLING CODE 6820-EP-S