General Services Administration Acquisition Regulation; Waiver of Consequential Damages and “Post Award” Audit Provisions (Correction), 19051-19052 [05-7039]
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Federal Register / Vol. 70, No. 69 / Tuesday, April 12, 2005 / Proposed Rules
through individual Federal agency retail
network pharmacies. The grand metric
quantity for each product will then be
rounded down to the nearest package size
based on the product code identifier to yield
the total number of units procured by the
Federal agency.
(i) The National Drug Code (NDC) number
will be used to populate the product code
identifier. The NDC should correlate to the
actual product dispensed by the pharmacy,
based on commercial best practice and data
integrity requirements demanded by health
plans and other insurers.
(ii) The Federal agency’s Office of Program
Integrity will be notified of any pharmacies
identified (by Government, industry, or other
means) as submitting fraudulent NDCs.
(iii) NDCs assigned by product repackagers
will only be included in the reports when the
repackager NDC can be correlated to the NDC
of the originating product.
(3) Contractor Refund and Reporting
Schedule. (i) The Contractor shall complete
refund calculations not later than 60 days
following the date of the quarterly UD
Report.
(ii) The Contractor shall make refund
payments so that such payments are received
by DoD not later than 70 days following the
date of the quarterly UD Report. At the time
of refund payment, the Contractor shall also
send to the Federal Agency’s Pharmacy
Benefits Office (PBO) a Reconciliation Report
corresponding to the quarterly UD Report
and resulting refund payment.
(h) Resolution of Refund Data
Disagreements. (1) If the Contractor disagrees
with the Federal agency data in the quarterly
refund request under paragraph (g) of this
clause, the Contractor shall provide prompt
written notice to the PBO. Such notice shall
be received by the PBO no later than 10
business days after the Contractor’s discovery
of the alleged error, but in no event no later
than one year after the date of the quarterly
report containing the alleged erroneous data.
The notice shall include specific
identification of the alleged error(s) and the
specific reason(s) the Contractor believes the
data to be in error, along with all available
documentation that supports the Contractor’s
allegation(s).
(2) The Federal agency’s PBO will initiate
a prompt review of the data following receipt
of the notice and documentation provided by
the Contractor. The parties agree to use their
best good faith efforts to resolve any
disagreement within 60 days of the PBO’s
receipt of the Contractor’s written notice.
During this period, the Contractor shall
proceed diligently with performance of this
contract and will exhaust administrative
remedies under this clause prior to filing a
dispute under the Disputes clause
incorporated into this contract. Performance
includes remittance of any refund due the
Federal agency based upon the data provided
by the PBO with which the Contractor
disagrees. If the written notice of
disagreement is resolved in favor of the
Contractor, the Federal agency shall
reimburse the Contractor the amount of
remitted refund attributed to the error and
simple interest on the reimbursed amount at
the rate determined in accordance with the
VerDate jul<14>2003
19:58 Apr 11, 2005
Jkt 205001
Contract Disputes Act of 1978, as amended
(41 U.S.C. 601–603), from the date of receipt
of the Contractor’s remittance of the refund
in disagreement.
(3) If the Federal agency and the Contractor
cannot resolve the disagreement within 60
days following receipt of the Contractor’s
written notice (and any time extensions
mutually agreed to by the parties), the
Contractor shall have exhausted
administrative remedies under this clause
and may proceed with disputes remedies
available under the Disputes clause and the
Contract Disputes Act of 1978, as amended.
(i) Industrial Funding Fee and Sales
Reporting. The Contractor shall report all
contract sales covered by this clause and pay
the Industrial Funding Fee (IFF) included
therein, as required by VA’s variation of
clause 552.238–74 of the contract, ‘‘Industrial
Funding Fee and Sales Reporting (JUL 2003)
(Variation’’). All sales of covered drugs made
through retail pharmacies under this clause
are deemed to be reportable when the
Contractor receives the quarterly Utilization
Flat File Layout Report(s) (or its functional
substitute), applies the appropriate FSS
contract price (including IFF) to the rounded
total number of units of each covered product
purchased by the submitting agency (as
shown on the Flat File Report), and computes
the total dollar sales of each product. These
sales are counted as FSS sales on the date the
computations are finished (for example, the
results of computations finished on March 10
are reported 60 days after the end of the first
calendar quarter, on May 30). The grand total
of all retail pharmacy sales (at the
appropriate FSS contract prices) under this
clause computed during a calendar quarter
shall be included in the Contractor’s
quarterly sales report to VA. That
information and the resultant IFF shall be
provided to VA according to the timelines
and procedures established in 552.238–74.
(End of clause)
[FR Doc. 05–7270 Filed 4–11–04; 8:45 am]
BILLING CODE 6820–61–S
GENERAL SERVICES
ADMINISTRATION
48 CFR Parts 546 and 552
[GSAR ANPR 2005–N01]
General Services Administration
Acquisition Regulation; Waiver of
Consequential Damages and ‘‘Post
Award’’ Audit Provisions (Correction)
Office of the Chief Acquisition
Officer, General Services
Administration (GSA)
ACTION: Correction to advance notice of
proposed rulemaking and notice of
public meeting.
AGENCY:
SUMMARY: The General Services
Administration (GSA) is requesting
comments from both Government and
industry on whether the General
Services Administration Acquisition
Regulation (GSAR) should be revised to
PO 00000
Frm 00040
Fmt 4702
Sfmt 4702
19051
include a waiver of consequential
damages for contracts awarded for
commercial items under the FAR. GSA
is also requesting comments on whether
‘‘post award’’ audit provisions should
be included in its Multiple Award
Schedules (MAS) contracts and
Governmentwide acquisition contracts
(GWACs). GSA is further amending the
correction notice published in the
Federal Register at 70 FR 13005, March
17, 2005, to add the following: In
addition, GSA is interested in receiving
comments on whether the Examination
of Records clause at GSAR 552.215–71
should be modified to reinstate postaward access to and the right to examine
records to verify that preaward/
modification pricing, sales, or other data
related to the supplies or services
offered under a contract which formed
the basis for an award/modification was
accurate, current, and complete. The
notice published in the Federal Register
at 70 FR 12167, March 11, 2005, is
amended to extend the public comment
date to May 10, 2005, and to allow
interested parties to submit
presentations by April 7, 2005.
DATES: Comment Date: Interested parties
should submit comments on or before
May 10, 2005, to be considered in the
formulation of a proposed rulemaking.
Public Meeting Presentation Date:
Interested parties may register and
submit presentations by April 7, 2005.
ADDRESSES: Submit written comments
to:
General Services Administration, FAR
Secretariat (VIR), 1800 F Street, NW,
Room 4035, ATTN: Laurieann Duarte,
Washington, DC 20405.
Submit electronic comments via the
Internet to: gsaranpr.2005–N01@gsa.gov
Submit electronic presentations via
the Internet to: meeting.2005–
NO1@gsa.gov.
Please submit comments or
presentations only and cite GSAR ANPR
2005–N01 in all correspondence related
to this case. All comments received will
be posted without change to https://
www.acqnet.gov/far/ProposedRules/
proposed.htm, including any personal
information provided.
Public Meeting: The public meeting
will be conducted at the General
Services Administration, National
Capital Region, 301 7th and D Street,
SW, Washington, DC 20407,
Auditorium, starting at 9 a.m. to 4:00
p.m. EST., on April 14, 2005, to ensure
open dialogue between the Government
and interested parties on this important
topic.
Special Instructions. The submitted
presentations will be the only record of
the public meeting. If you intend to
E:\FR\FM\12APP1.SGM
12APP1
19052
Federal Register / Vol. 70, No. 69 / Tuesday, April 12, 2005 / Proposed Rules
have your presentation considered as a
public comment in the formulation of
the proposed rulemaking, the
presentation must be submitted
separately as a public comment as
instructed above.
Special Accommodations: The public
meeting is physically accessible to
people with disabilities. Request for
sign language interpretation or other
auxiliary aids should be directed to
Ernest Woodson, at 202–501–3775, at
least 5 working days prior to the
meeting date.
FOR FURTHER INFORMATION CONTACT Mr.
Ernest Woodson, Procurement Analyst,
Contract Policy Division, 202–501–
3775.
SUPPLEMENTARY INFORMATION:
Background
Currently, FAR Part 12, Acquisition of
Commercial Items, prescribes polices
and procedures unique to the
acquisition of commercial items under
FAR Part 12. FAR Part 12 implements
the Government’s preference for the
acquisition of commercial items as
contained in Title VIII of the Federal
Acquisition Streamlining Act of 1994 by
establishing policies more closely
resembling those of the commercial
marketplace. The clause, FAR 52.212–4,
Contract Terms and Conditions—
Commercial Items, that includes terms
and conditions applicable to each
acquisition procured under FAR Part 12
is, to the maximum extent practicable,
consistent with customary commercial
practices. The clause includes a
provision, FAR 52.212–4(p), Limitation
of liability, that provides; ‘‘Except as
otherwise provided by an express
warranty, the Contractor will not be
liable to the Government for
consequential damages resulting from
any defect or deficiencies in accepted
items.’’ Also, FAR 12.302(b) allows the
contracting officer to tailor the clause at
FAR 52.212–4 to adapt to market
conditions for each commercial
acquisition. In addition to the limitation
of liability clause and the provision at
FAR 12.302, Federal contracts typically
include a broad range of standard
contract clauses such as warranties and
liquidated damages that provide
exclusive remedies for nonperformance
that limit the Government to the specific
remedies set forth in the clause.
Likewise, the Contract Disputes Act of
1978 provides for the resolution of any
failure on the part of the Government
and the contractor to reach agreement
on any request for equitable adjustment,
claim, appeal, or action arising under or
relating to a Government contract to be
VerDate jul<14>2003
16:24 Apr 11, 2005
Jkt 205001
a dispute to be resolved in accordance
with FAR 52.233–1, Disputes.
Notwithstanding specific adjustments
and other remedies provided in
Government contracts for contractor
deficiencies or nonperformance,
concerns have been raised that—
• FAR clause 52.212–4(p) and the
‘‘tailoring’’ provision at FAR 12.302, do
not reach the level of commercial
standards and that unlimited
consequential or other incidental or
special damages are not necessary and
are, in fact, counterproductive to
efficient procurement, raising costs and
establishing barriers to commercial
companies considering whether to do
business with the Federal Government;
• Although FAR 12.302 permits
contracting officers to tailor the
limitation of liability clause at FAR
52.212–4(p), some companies assert that
contracting officers are unwilling to do
so, leaving contractors with a take-it or
leave-it option and contracts that
deviate from the commercial
marketplace, making contractors in
general less willing to sign on to such
contracts;
• The commercial practice, unlike
FAR 52.212–4(p), that waives liability
for consequential damages resulting
from any defect or deficiencies in
accepted items, provides for a complete
wavier of consequential damages;
• Contractors would make risk
decisions and negotiate Government
contracts without having to add an
uncertainty premium as to liability
protection, if FAR Part 12 were
appropriately amended to reflect
commercial practices; and
• Contractors also request that we
make the waiver of consequential
damages for commercial products and
services available under other
provisions of the FAR.
Similarly, the General Accounting
Office and periodically GSA’s IG raise
concerns regarding GSA’s right to access
and examine contractor records after
contract award. GSA’s primary vehicle
for conducting post-award audits is
GSAR 552.215–70, Examination of
Records by GSA, that gives the
Administrator of GSA, or any duly
authorized representative, typically the
GSA Inspector General’s Office of
Audits, access to and the right to
examine contractor records relating to
over billings, billing errors, compliance
with the Industrial Funding Fee (IFF)
clause of the contract, and compliance
with the Price Reduction Clause under
MAS contracts.
In addition to the GSA Examination of
Records clause, GSA may use a number
PO 00000
Frm 00041
Fmt 4702
Sfmt 4702
of other authorities to conduct a postaward review of a contractor’s records.
These other authorities include FAR
52.212–5 which authorizes the
Comptroller General of the United
States to access and examine a
contractor’s directly pertinent records
involving transactions related to the
contract; GSAR 515.209–70(b) that
permits a contracting officer to modify
the GSA Examination of Records Clause
to define the specific area of audit (e.g.,
the use or disposition of Government—
furnished property, compliance with
price reduction clause, etc.), and the
right of the GSA Inspector General to
issue subpoenas for contractor records
under the Inspector General Act of 1978.
Contractors’ major concerns with
GSA’s post-award audit authority
include complaints that they are too
broad and not consistent with
commercial contract practices.
In consideration of the above
concerns, we have questions as to how
the taxpayer may benefit from any
revisions to the GSAR to address
contractor concerns regarding limitation
of liability or post-award audits. In
addition, we are interested in exploring
whether GSA should modify the
Examination of Records clause at GSAR
552.215–71 to reinstate post-award
access to and the right to examine
records to verify that preaward/
modification pricing, sales, or other data
related to the supplies or services
offered under a contract which formed
the basis for an award/modification was
accurate, current, and complete.
We are also interested in learning
what, if any, impact the Services
Acquisition Reform Act of 2002 and
2003 has on the issue of revising the
GSAR to address limitations of liability.
In this advance notice of proposed
rulemaking and notice of public
meeting, GSA is seeking input from both
Government and industry on whether
the GSAR should be revised to waive
consequential damages in the purchase
of commercial items under FAR Parts
12, 13, 14, and 15, and whether GSA
should modify its policy and practices
with regard to the addition of post
award audit clauses into contracts it
awards.
Dated: April 4, 2005.
David A. Drabkin,
Senior Procurement Executive, Office of the
Chief Acquisition Officer, General Services
Administration.
[FR Doc. 05–7039 Filed 4–11–05; 8:45 am]
BILLING CODE 6820–61–S
E:\FR\FM\12APP1.SGM
12APP1
]]>Agencies
[Federal Register Volume 70, Number 69 (Tuesday, April 12, 2005)]
[Proposed Rules]
[Pages 19051-19052]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-7039]
-----------------------------------------------------------------------
GENERAL SERVICES ADMINISTRATION
48 CFR Parts 546 and 552
[GSAR ANPR 2005-N01]
General Services Administration Acquisition Regulation; Waiver of
Consequential Damages and ``Post Award'' Audit Provisions (Correction)
AGENCY: Office of the Chief Acquisition Officer, General Services
Administration (GSA)
ACTION: Correction to advance notice of proposed rulemaking and notice
of public meeting.
-----------------------------------------------------------------------
SUMMARY: The General Services Administration (GSA) is requesting
comments from both Government and industry on whether the General
Services Administration Acquisition Regulation (GSAR) should be revised
to include a waiver of consequential damages for contracts awarded for
commercial items under the FAR. GSA is also requesting comments on
whether ``post award'' audit provisions should be included in its
Multiple Award Schedules (MAS) contracts and Governmentwide acquisition
contracts (GWACs). GSA is further amending the correction notice
published in the Federal Register at 70 FR 13005, March 17, 2005, to
add the following: In addition, GSA is interested in receiving comments
on whether the Examination of Records clause at GSAR 552.215-71 should
be modified to reinstate post-award access to and the right to examine
records to verify that preaward/modification pricing, sales, or other
data related to the supplies or services offered under a contract which
formed the basis for an award/modification was accurate, current, and
complete. The notice published in the Federal Register at 70 FR 12167,
March 11, 2005, is amended to extend the public comment date to May 10,
2005, and to allow interested parties to submit presentations by April
7, 2005.
DATES: Comment Date: Interested parties should submit comments on or
before May 10, 2005, to be considered in the formulation of a proposed
rulemaking.
Public Meeting Presentation Date: Interested parties may register
and submit presentations by April 7, 2005.
ADDRESSES: Submit written comments to:
General Services Administration, FAR Secretariat (VIR), 1800 F
Street, NW, Room 4035, ATTN: Laurieann Duarte, Washington, DC 20405.
Submit electronic comments via the Internet to: gsaranpr.2005-
N01@gsa.gov
Submit electronic presentations via the Internet to: meeting.2005-
NO1@gsa.gov.
Please submit comments or presentations only and cite GSAR ANPR
2005-N01 in all correspondence related to this case. All comments
received will be posted without change to https://www.acqnet.gov/far/
ProposedRules/proposed.htm, including any personal information
provided.
Public Meeting: The public meeting will be conducted at the General
Services Administration, National Capital Region, 301 7th and D Street,
SW, Washington, DC 20407, Auditorium, starting at 9 a.m. to 4:00 p.m.
EST., on April 14, 2005, to ensure open dialogue between the Government
and interested parties on this important topic.
Special Instructions. The submitted presentations will be the only
record of the public meeting. If you intend to
[[Page 19052]]
have your presentation considered as a public comment in the
formulation of the proposed rulemaking, the presentation must be
submitted separately as a public comment as instructed above.
Special Accommodations: The public meeting is physically accessible
to people with disabilities. Request for sign language interpretation
or other auxiliary aids should be directed to Ernest Woodson, at 202-
501-3775, at least 5 working days prior to the meeting date.
FOR FURTHER INFORMATION CONTACT Mr. Ernest Woodson, Procurement
Analyst, Contract Policy Division, 202-501-3775.
SUPPLEMENTARY INFORMATION:
Background
Currently, FAR Part 12, Acquisition of Commercial Items, prescribes
polices and procedures unique to the acquisition of commercial items
under FAR Part 12. FAR Part 12 implements the Government's preference
for the acquisition of commercial items as contained in Title VIII of
the Federal Acquisition Streamlining Act of 1994 by establishing
policies more closely resembling those of the commercial marketplace.
The clause, FAR 52.212-4, Contract Terms and Conditions--Commercial
Items, that includes terms and conditions applicable to each
acquisition procured under FAR Part 12 is, to the maximum extent
practicable, consistent with customary commercial practices. The clause
includes a provision, FAR 52.212-4(p), Limitation of liability, that
provides; ``Except as otherwise provided by an express warranty, the
Contractor will not be liable to the Government for consequential
damages resulting from any defect or deficiencies in accepted items.''
Also, FAR 12.302(b) allows the contracting officer to tailor the clause
at FAR 52.212-4 to adapt to market conditions for each commercial
acquisition. In addition to the limitation of liability clause and the
provision at FAR 12.302, Federal contracts typically include a broad
range of standard contract clauses such as warranties and liquidated
damages that provide exclusive remedies for nonperformance that limit
the Government to the specific remedies set forth in the clause.
Likewise, the Contract Disputes Act of 1978 provides for the
resolution of any failure on the part of the Government and the
contractor to reach agreement on any request for equitable adjustment,
claim, appeal, or action arising under or relating to a Government
contract to be a dispute to be resolved in accordance with FAR 52.233-
1, Disputes.
Notwithstanding specific adjustments and other remedies provided in
Government contracts for contractor deficiencies or nonperformance,
concerns have been raised that--
FAR clause 52.212-4(p) and the ``tailoring'' provision at
FAR 12.302, do not reach the level of commercial standards and that
unlimited consequential or other incidental or special damages are not
necessary and are, in fact, counterproductive to efficient procurement,
raising costs and establishing barriers to commercial companies
considering whether to do business with the Federal Government;
Although FAR 12.302 permits contracting officers to tailor
the limitation of liability clause at FAR 52.212-4(p), some companies
assert that contracting officers are unwilling to do so, leaving
contractors with a take-it or leave-it option and contracts that
deviate from the commercial marketplace, making contractors in general
less willing to sign on to such contracts;
The commercial practice, unlike FAR 52.212-4(p), that
waives liability for consequential damages resulting from any defect or
deficiencies in accepted items, provides for a complete wavier of
consequential damages;
Contractors would make risk decisions and negotiate
Government contracts without having to add an uncertainty premium as to
liability protection, if FAR Part 12 were appropriately amended to
reflect commercial practices; and
Contractors also request that we make the waiver of
consequential damages for commercial products and services available
under other provisions of the FAR.
Similarly, the General Accounting Office and periodically GSA's IG
raise concerns regarding GSA's right to access and examine contractor
records after contract award. GSA's primary vehicle for conducting
post-award audits is GSAR 552.215-70, Examination of Records by GSA,
that gives the Administrator of GSA, or any duly authorized
representative, typically the GSA Inspector General's Office of Audits,
access to and the right to examine contractor records relating to over
billings, billing errors, compliance with the Industrial Funding Fee
(IFF) clause of the contract, and compliance with the Price Reduction
Clause under MAS contracts.
In addition to the GSA Examination of Records clause, GSA may use a
number of other authorities to conduct a post-award review of a
contractor's records. These other authorities include FAR 52.212-5
which authorizes the Comptroller General of the United States to access
and examine a contractor's directly pertinent records involving
transactions related to the contract; GSAR 515.209-70(b) that permits a
contracting officer to modify the GSA Examination of Records Clause to
define the specific area of audit (e.g., the use or disposition of
Government--furnished property, compliance with price reduction clause,
etc.), and the right of the GSA Inspector General to issue subpoenas
for contractor records under the Inspector General Act of 1978.
Contractors' major concerns with GSA's post-award audit authority
include complaints that they are too broad and not consistent with
commercial contract practices.
In consideration of the above concerns, we have questions as to how
the taxpayer may benefit from any revisions to the GSAR to address
contractor concerns regarding limitation of liability or post-award
audits. In addition, we are interested in exploring whether GSA should
modify the Examination of Records clause at GSAR 552.215-71 to
reinstate post-award access to and the right to examine records to
verify that preaward/modification pricing, sales, or other data related
to the supplies or services offered under a contract which formed the
basis for an award/modification was accurate, current, and complete.
We are also interested in learning what, if any, impact the
Services Acquisition Reform Act of 2002 and 2003 has on the issue of
revising the GSAR to address limitations of liability.
In this advance notice of proposed rulemaking and notice of public
meeting, GSA is seeking input from both Government and industry on
whether the GSAR should be revised to waive consequential damages in
the purchase of commercial items under FAR Parts 12, 13, 14, and 15,
and whether GSA should modify its policy and practices with regard to
the addition of post award audit clauses into contracts it awards.
Dated: April 4, 2005.
David A. Drabkin,
Senior Procurement Executive, Office of the Chief Acquisition Officer,
General Services Administration.
[FR Doc. 05-7039 Filed 4-11-05; 8:45 am]
BILLING CODE 6820-61-S
