Federal Acquisition Regulation; Submission of Cost or Pricing Data on Noncommercial Modifications of Commercial Items, 33659-33660 [05-11188]
Download as PDF
<![CDATA[
Federal Register / Vol. 70, No. 109 / Wednesday, June 8, 2005 / Rules and Regulations
concerning the IRFA were received. A
Final Regulatory Flexibility Analysis
(FRFA) was prepared. The rule is
expected to have a positive impact on
small business concerns. However, it is
not expected to have a significant
impact on a substantial number of small
entities because it provides
Governmentwide procurement authority
that enables the contracting officer (CO)
to treat a noncommercial service as
commercial if specific conditions, most
of which pertain to performance–based
contracting, are met. The Government is
encouraged to use performance–based
contracting techniques on all service
contracts and allowing this authority—
• Opens up opportunities to small
businesses that otherwise would not
have been available if they could not
meet the commercial items definition in
FAR 2.101 and 52.202–1;
• Provides contracting flexibility
when using performance–based
contracting techniques;
• Helps the Government move closer
to achieving the performance–based
contracting performance–goals for Fiscal
Years 2004 and 2005; and
• Allows the CO to use FAR Part 12,
and procure these types of services
similar to the commercial marketplace.
Specifically, a query of the Central
Contractor Registration (CCR) system
indicates there are 198,732 small
businesses registered, and many of these
contractors were awarded performance–
based contracts or task orders for
noncommercial services and the
Government was required to use FAR
Part 13, Simplified Acquisition
Procedures, FAR Part 14, Sealed
Bidding, or FAR Part 15, Contracting by
Negotiations, for these acquisitions
because they were not commercial
items. This authority allows the CO to
use FAR Part 12, which is the
Government’s preference since this will
allow us to procure these types of
services similar to the commercial
marketplace, and using FAR Part 12 will
provide more contracting flexibility and
opportunities to the small business
community.
The rule will impose no new
reporting or recording keeping
requirements on large or small entities.
It only requires the Government to
report on contracts or task orders
awarded under this authority.
Specifically, implementation of Section
1431 requires agencies to collect and
maintain reliable data sufficient to
identify the contracts or task orders
treated as contracts for commercial
items using the authority of this section.
The Federal Procurement Data System–
Next Generation (FPDS–NG) will be
revised to enable agencies to report on
VerDate jul<14>2003
17:35 Jun 07, 2005
Jkt 205001
the use of such authority both
Governmentwide and for each
department and agency. By November
2006, the Office of Management and
Budget will start reporting to the
Committees on Governmental Affairs
and Armed Services of the Senate, and
the Committees on Government Reform
and Armed Services of the House of
Representatives on the implementation
of this section. The authority of Section
1431 expires on November 24, 2013, ten
years after enactment.
The FAR Secretariat has submitted a
copy of the FRFA to the Chief Counsel
for Advocacy of the Small Business
Administration. Interested parties may
obtain a copy from the FAR Secretariat.
The Councils will consider comments
from small entities concerning the
affected FAR Parts 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
2005–004, FAR Case 2004–004), 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.
List of Subjects in 48 CFR Parts 2, 4, 12,
37, and 52
Government procurement.
Dated: May 27, 2005.
Julia B. Wise,
Director, Contract Policy Division.
Interim Rule Adopted as Final With
Changes
Accordingly, DOD, GSA, and NASA
adopt the interim rule amending 48 CFR
parts 2, 4, 12, 37, and 52, which was
published in the Federal Register at 69
FR 34226, June 18, 2004, as a final rule
with the following changes:
I 1. The authority citation for 48 CFR
parts 2, 4, 12, 37, 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 12—ACQUISITION OF
COMMERCIAL ITEMS
12.102
[Amended]
2. Amend section 12.102 in paragraph
(g)(1)(iv) by removing ‘‘Includes’’ and
adding ‘‘Uses’’ in its place; and in
paragraph (g)(2) by removing ‘‘should’’
and adding ‘‘may’’ in its place.
I
[FR Doc. 05–11189 Filed 6–7–05; 8:45 am]
BILLING CODE 6820–EP–S
PO 00000
Frm 00007
Fmt 4701
Sfmt 4700
33659
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Part 15
[FAC 2005–04; FAR Case 2004–035; Item
IV]
RIN 9000–AK17
Federal Acquisition Regulation;
Submission of Cost or Pricing Data on
Noncommercial Modifications of
Commercial Items
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Interim rule with request for
comments.
AGENCIES:
SUMMARY: The Civilian Agency
Acquisition Council and the Defense
Acquisition Regulations Council
(Councils) have agreed on an interim
rule amending the Federal Acquisition
Regulation (FAR) regarding prohibition
on obtaining cost or pricing data to
implement Section 818 of Public Law
108–375, the Ronald W. Reagan
National Defense Authorization Act for
Fiscal Year 2005.
DATES: Effective Date: June 8, 2005.
Comment Date: Interested parties
should submit comments to the FAR
Secretariat at the address shown below
on or before August 8, 2005 to be
considered in the formulation of a final
rule.
ADDRESSES: Submit comments
identified by FAC 2005–04, FAR case
2004–035, by any of the following
methods:
• Federal eRulemaking Portal: http:/
/www.regulations.gov. Follow the
instructions for submitting comments.
• Agency Web Site: https://
www.acqnet.gov/far/ProposedRules/
proposed.htm. Click on the FAR case
number to submit comments.
• E–mail: farcase.2004–035@gsa.gov.
Include FAC 2005–04, FAR case 2004–
035, 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 2005–04, FAR case
2004–035, in all correspondence related
to this case. All comments received will
be posted without change to https://
E:\FR\FM\08JNR4.SGM
08JNR4
33660
Federal Register / Vol. 70, No. 109 / Wednesday, June 8, 2005 / Rules and Regulations
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 Mr. Jeremy Olson at
(202) 501–3221. Please cite FAC 2005–
04, FAR case 2004–035.
SUPPLEMENTARY INFORMATION:
A. Background
Section 818, Submission of Cost or
Pricing Data on Noncommercial
Modifications of Commercial Items, of
the Ronald W. Reagan National Defense
Authorization Act for Fiscal Year 2005,
amends 10 U.S.C. 2306a. 10 U.S.C.
2306a provides exceptions to the
requirement for submission of cost or
pricing data, including an exception for
commercial items. Section 818 states
that the exception for a commercial item
does not apply to noncommercial
modifications of a commercial item that
are expected to cost, in the aggregate,
more than $500,000 or 5 percent of the
total price of the contract, whichever is
greater. Section 818 applies to offers
submitted, and to modifications of
contracts or subcontracts made, on or
after June 1, 2005.
B. Discussion
The Councils are revising the
commercial item discussion in
paragraph (c)(3) of FAR 15.403–1,
Prohibition on Obtaining Cost or Pricing
Data, to reflect the requirements of
Section 818. This includes inserting a
new paragraph (3)(ii). This new
paragraph provides the exception to the
requirement for cost or pricing data for
minor modifications that do not change
the item from a commercial item to a
noncommercial item. The exception
applies to all such minor modifications
for acquisitions funded by agencies
other than DoD, NASA, and Coast
Guard. For acquisitions funded by DoD,
NASA, and Coast Guard, the exceptions
apply to all such modifications if the
total cost of the modifications do not
exceed the greater of $500,000 or 5
percent of the total price of the contract.
This new policy applies only to
acquisitions funded by DoD, NASA, or
the Coast Guard, since the statute
amends 10 U.S.C. 2306a, which only
applies to DoD, NASA, and the Coast
Guard. The new language does not
apply to acquisitions funded by other
than DoD, NASA, or the Coast Guard
because Section 818 did not amend 41
U.S.C. 254b, which prohibits obtaining
cost or pricing data for commercial
items. However, the new policy applies
VerDate jul<14>2003
17:35 Jun 07, 2005
Jkt 205001
to contracts awarded or task or delivery
orders placed on behalf of DoD, NASA,
or the Coast Guard by an official of the
United States outside of those agencies,
because the statutory requirement of
section 818 applies to the funds
provided by DoD, NASA, or the Coast
Guard.
C. Regulatory Planning and Review
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.
D. Regulatory Flexibility Act
The 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 the number of small entities
providing commercial items with non–
commercial modifications costing more
than $500,000 is expected to be very
low.
Therefore, an Initial Regulatory
Flexibility Analysis has not been
performed. The Councils will consider
comments from small entities
concerning the affected FAR Part 15 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 2005–04, FAR case 2004–
035), in correspondence.
E. 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.
F. 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 an urgent
and compelling reason exists to
promulgate this interim rule without
prior opportunity for public comment.
This action is necessary to implement
the changes resulting from the
enactment of Section 818 of Public Law
108–375, the Ronald W. Reagan
National Defense Authorization Act for
Fiscal Year 2005 that are effective June
1, 2005. However, pursuant to Public
Law 98–577 and FAR 1.501, the
Councils will consider public comments
PO 00000
Frm 00008
Fmt 4701
Sfmt 4700
received in response to this interim rule
in the formation of the final rule.
List of Subjects in 48 CFR Part 15
Government procurement.
Dated: May 27, 2005.
Julia B. Wise,
Director, Contract Policy Division.
Therefore, DoD, GSA, and NASA
amend 48 CFR part 15 as set forth below:
I
PART 15—CONTRACTING BY
NEGOTIATION
1. The authority citation for 48 CFR
part 15 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).
2. Amend section 15.403–1 by revising
the first sentence of paragraph (c)(3)(i),
redesignating paragraph (c)(3)(ii) as
(c)(3)(iii), and adding new paragraph
(c)(3)(ii) to read as follows:
I
15.403–1 Prohibition on obtaining cost or
pricing data (10 U.S.C. 2306a and 41 U.S.C.
254b).
*
*
*
*
*
(c) * * *
(3) Commercial items. (i) Any
acquisition of an item that meets the
commercial item definition in 2.101, or
any modification, as defined in
paragraph (3)(i) of that definition, that
does not change the item from a
commercial item to a noncommercial
item, is exempt from the requirement for
cost or pricing data. * * *
(ii) The following requirements apply
to minor modifications defined in
paragraph (3)(ii) of the definition of a
commercial item at 2.101 that do not
change the item from a commercial item
to a noncommercial item:
(A) For acquisitions funded by any
agency other than DoD, NASA, or Coast
Guard, the modifications are exempt
from the requirement for submission of
cost or pricing data.
(B) For acquisitions funded by DoD,
NASA, or Coast Guard, the
modifications are exempt from the
requirement for submission of cost or
pricing data provided the total cost of
the modifications do not exceed the
greater of $500,000 or 5 percent of the
total price of the contract.
(C) For acquisitions funded by DoD,
NASA, or Coast Guard where the total
cost of the modifications exceeds the
greater of $500,000 or 5 percent of the
total price of the contract and no other
exception or waiver applies, the
contracting officer must require
submission of cost or pricing data.
*
*
*
*
*
[FR Doc. 05–11188 Filed 6–7–05; 8:45 am]
BILLING CODE 6820–EP–S
E:\FR\FM\08JNR4.SGM
08JNR4
]]>Agencies
[Federal Register Volume 70, Number 109 (Wednesday, June 8, 2005)]
[Rules and Regulations]
[Pages 33659-33660]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-11188]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 15
[FAC 2005-04; FAR Case 2004-035; Item IV]
RIN 9000-AK17
Federal Acquisition Regulation; Submission of Cost or Pricing
Data on Noncommercial Modifications of Commercial Items
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 (Councils) have agreed on an interim
rule amending the Federal Acquisition Regulation (FAR) regarding
prohibition on obtaining cost or pricing data to implement Section 818
of Public Law 108-375, the Ronald W. Reagan National Defense
Authorization Act for Fiscal Year 2005.
DATES: Effective Date: June 8, 2005.
Comment Date: Interested parties should submit comments to the FAR
Secretariat at the address shown below on or before August 8, 2005 to
be considered in the formulation of a final rule.
ADDRESSES: Submit comments identified by FAC 2005-04, FAR case 2004-
035, by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
Agency Web Site: https://www.acqnet.gov/far/ProposedRules/
proposed.htm. Click on the FAR case number to submit comments.
E-mail: farcase.2004-035@gsa.gov. Include FAC 2005-04, FAR
case 2004-035, 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 2005-04, FAR
case 2004-035, in all correspondence related to this case. All comments
received will be posted without change to https://
[[Page 33660]]
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 Mr. Jeremy Olson at (202) 501-
3221. Please cite FAC 2005-04, FAR case 2004-035.
SUPPLEMENTARY INFORMATION:
A. Background
Section 818, Submission of Cost or Pricing Data on Noncommercial
Modifications of Commercial Items, of the Ronald W. Reagan National
Defense Authorization Act for Fiscal Year 2005, amends 10 U.S.C. 2306a.
10 U.S.C. 2306a provides exceptions to the requirement for submission
of cost or pricing data, including an exception for commercial items.
Section 818 states that the exception for a commercial item does not
apply to noncommercial modifications of a commercial item that are
expected to cost, in the aggregate, more than $500,000 or 5 percent of
the total price of the contract, whichever is greater. Section 818
applies to offers submitted, and to modifications of contracts or
subcontracts made, on or after June 1, 2005.
B. Discussion
The Councils are revising the commercial item discussion in
paragraph (c)(3) of FAR 15.403-1, Prohibition on Obtaining Cost or
Pricing Data, to reflect the requirements of Section 818. This includes
inserting a new paragraph (3)(ii). This new paragraph provides the
exception to the requirement for cost or pricing data for minor
modifications that do not change the item from a commercial item to a
noncommercial item. The exception applies to all such minor
modifications for acquisitions funded by agencies other than DoD, NASA,
and Coast Guard. For acquisitions funded by DoD, NASA, and Coast Guard,
the exceptions apply to all such modifications if the total cost of the
modifications do not exceed the greater of $500,000 or 5 percent of the
total price of the contract.
This new policy applies only to acquisitions funded by DoD, NASA,
or the Coast Guard, since the statute amends 10 U.S.C. 2306a, which
only applies to DoD, NASA, and the Coast Guard. The new language does
not apply to acquisitions funded by other than DoD, NASA, or the Coast
Guard because Section 818 did not amend 41 U.S.C. 254b, which prohibits
obtaining cost or pricing data for commercial items. However, the new
policy applies to contracts awarded or task or delivery orders placed
on behalf of DoD, NASA, or the Coast Guard by an official of the United
States outside of those agencies, because the statutory requirement of
section 818 applies to the funds provided by DoD, NASA, or the Coast
Guard.
C. Regulatory Planning and Review
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.
D. Regulatory Flexibility Act
The 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 the
number of small entities providing commercial items with non-commercial
modifications costing more than $500,000 is expected to be very low.
Therefore, an Initial Regulatory Flexibility Analysis has not been
performed. The Councils will consider comments from small entities
concerning the affected FAR Part 15 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 2005-04, FAR case 2004-035), in
correspondence.
E. 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.
F. 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 an urgent and compelling reason exists to promulgate this
interim rule without prior opportunity for public comment. This action
is necessary to implement the changes resulting from the enactment of
Section 818 of Public Law 108-375, the Ronald W. Reagan National
Defense Authorization Act for Fiscal Year 2005 that are effective June
1, 2005. 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 Part 15
Government procurement.
Dated: May 27, 2005.
Julia B. Wise,
Director, Contract Policy Division.
0
Therefore, DoD, GSA, and NASA amend 48 CFR part 15 as set forth below:
PART 15--CONTRACTING BY NEGOTIATION
0
1. The authority citation for 48 CFR part 15 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).
0
2. Amend section 15.403-1 by revising the first sentence of paragraph
(c)(3)(i), redesignating paragraph (c)(3)(ii) as (c)(3)(iii), and
adding new paragraph (c)(3)(ii) to read as follows:
15.403-1 Prohibition on obtaining cost or pricing data (10 U.S.C.
2306a and 41 U.S.C. 254b).
* * * * *
(c) * * *
(3) Commercial items. (i) Any acquisition of an item that meets the
commercial item definition in 2.101, or any modification, as defined in
paragraph (3)(i) of that definition, that does not change the item from
a commercial item to a noncommercial item, is exempt from the
requirement for cost or pricing data. * * *
(ii) The following requirements apply to minor modifications
defined in paragraph (3)(ii) of the definition of a commercial item at
2.101 that do not change the item from a commercial item to a
noncommercial item:
(A) For acquisitions funded by any agency other than DoD, NASA, or
Coast Guard, the modifications are exempt from the requirement for
submission of cost or pricing data.
(B) For acquisitions funded by DoD, NASA, or Coast Guard, the
modifications are exempt from the requirement for submission of cost or
pricing data provided the total cost of the modifications do not exceed
the greater of $500,000 or 5 percent of the total price of the
contract.
(C) For acquisitions funded by DoD, NASA, or Coast Guard where the
total cost of the modifications exceeds the greater of $500,000 or 5
percent of the total price of the contract and no other exception or
waiver applies, the contracting officer must require submission of cost
or pricing data.
* * * * *
[FR Doc. 05-11188 Filed 6-7-05; 8:45 am]
BILLING CODE 6820-EP-S
