Cost Accounting Standards Board (CAS) Changes to Acquisition Thresholds, 73423-73426 [05-23647]
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Federal Register / Vol. 70, No. 237 / Monday, December 12, 2005 / Proposed Rules
‘‘(Date)’’; and removing from the last
sentence of paragraph (d) of the clause
‘‘$500,000’’ and adding ‘‘$550,000’’ in
its place.
52.230–3
[Amended]
84. Amend section 52.230–3 by
revising the date of the clause to read
‘‘(Date)’’; and removing from paragraph
(d)(2) ‘‘$500,000’’ and adding
‘‘$550,000’’ in its place.
52.230–5
[Amended]
85. Amend section 52.230–5 by
revising the date of the clause to read
‘‘(Date)’’; and removing from paragraph
(d)(2) of the clause ‘‘$500,000’’ and
adding ‘‘$550,000’’ in its place.
86. Amend section 52.236–1 by
revising the introductory paragraph to
read as follows:
52.236–1 Performance of Work by the
Contractor.
As prescribed in 36.501(b), insert the
following clause. Complete the clause
by inserting the appropriate percentage
consistent with the complexity and
magnitude of the work and customary or
necessary specialty subcontracting (see
36.501(a)):
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87. Amend section 52.243–7 by
revising the introductory paragraph to
read as follows:
52.243–7
[Amended]
89. Amend section 52.248–3 by
revising the date of the clause to read
‘‘(Date)’’; and removing from the first
sentence of paragraph (h) of the clause
‘‘$50,000’’ and adding ‘‘$55,000’’ in its
place.
90. Amend section 52.249–1 by
revising the introductory paragraph to
read as follows:
52.249–1 Termination for Convenience of
the Government (Fixed-Price) (Short Form).
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15:48 Dec 09, 2005
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53.301–294
[Amended]
92. Amend section 53.301–294 at the
bottom of page 1 of the form by revising
the date of the form to read ‘‘(Date)’’;
and on page 2 of the form, by removing
from the first sentence of paragraph 3,
under General Instructions, ‘‘$500,000’’
and adding ‘‘$550,000’’ in its place.
53.301–295
[Amended]
93. Amend section 53.301–295 at the
bottom of page 1 of the form by revising
the date of the form to read ‘‘(Date)’’;
and on page 2 of the form, by removing
from the first sentences of paragraphs 2
and 5, under General Instructions,
‘‘$500,000’’ and adding ‘‘$550,000’’ in
their place.
[FR Doc. 05–16971 Filed 12–9–05; 8:45 am]
BILLING CODE 6820–EP–S
OFFICE OF MANAGEMENT AND
BUDGET
Office of Federal Procurement Policy
48 CFR Parts 9901 and 9903
Cost Accounting Standards
Board, Office of Federal Procurement
Policy, OMB.
ACTION: Proposed rule with request for
comment.
[Amended]
As prescribed in 49.502(a)(1), insert
the following clause:
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[Amended]
91. Amend section 53.219 by
removing from paragraphs (a) and (b)
‘‘(Rev. 10/01)’’ and adding ‘‘(Date)’’ in
its place.
AGENCY:
88. Amend section 52.244–6 by
revising the date of the clause to read
‘‘(Date)’’; removing from paragraph
(c)(1)(i) of the clause ‘‘$500,000’’ and
adding ‘‘$550,000’’ in its place, and
removing from paragraph (c)(1)(iii) of
the clause ‘‘(Dec 2001)’’ and adding
‘‘(Date)’’ in its place.
52.248–3
53.219
Cost Accounting Standards Board
(CAS) Changes to Acquisition
Thresholds
Notification of Changes.
As prescribed in 43.107, insert the
following clause:
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52.244–6
PART 53—FORMS
SUMMARY: The Cost Accounting
Standards (CAS) Board is proposing to
adjust the CAS application and full
coverage thresholds for inflation in
accordance with section 807 of the
Ronald W. Reagan National Defense
Authorization Act for Fiscal Year 2005
(Pub. L. 108–375).
DATES: Comments upon this proposed
rule must be in writing and must be
received by February 10, 2006.
ADDRESSES: Due to delays in OMB’s
receipt and processing of mail,
respondents are strongly encouraged to
submit comments electronically to
ensure timely receipt. Electronic
comments may be submitted to
casb2@omb.eop.gov. Please put the full
body of your comments in the text of the
electronic message and also as an
attachment readable in either MS Word
or Corel WordPerfect. Please include
your name, title, organization, postal
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73423
address, telephone number, and e-mail
address in the text of the message.
Comments may also be submitted via
facsimile to (202) 395–5105.
FOR FURTHER INFORMATION CONTACT:
David J. Capitano, Cost Accounting
Standards Board (telephone: 703–847–
7486).
SUPPLEMENTARY INFORMATION:
A. Background
Analysis of Statutory AcquisitionRelated Thresholds
Section 807 provides for adjustment
every 5 years of acquisition-related
thresholds, except for thresholds set by
the Davis-Bacon Act, Service Contract
Act, and trade agreements. The statute
requires that the adjustment be based on
inflation, using the Consumer Price
Index (CPI) for all-urban consumers.
Acquisition-related thresholds in
statutes that were in effect on October
1, 2000, are subject to 5 years of
inflation. For purposes of this proposed
rule, the calculation of escalation is
based on the CPI from December 1999
to December 2004 (the most recent
available data), which currently
computes at 1.1307, as determined by
the Federal Acquisition Regulatory
(FAR) Council.
Once the escalation factor is applied
to the acquisition-related threshold, the
law requires rounding of the calculated
threshold as follows:
< $10,000 ......................
$10,000–<$100,000 ......
$100,000–<$1,000,000
$1,000,000 or more ......
Nearest
Nearest
Nearest
Nearest
$500
$5,000
$50,000
$500,000
Applying the 1.1307 factor and the
rounding criteria described above, the
CAS thresholds have been revised as
follows:
(a) For contract applicability, from
$500,000 to $550,000;
(b) For applicability to a business
unit, from $7.5 million to $8.5 million;
(c) For waiver authority, from $15
million to $17 million;
(d) For full coverage, from $50 million
to $56.5 million;
(e) For disclosure statement
submissions by a company (other than
educational institutions), from $50
million to $56.5 million;
(f) For disclosure statement
submissions by a segment of a company,
from $10 million to $11.5 million; and
(g) For disclosure statement
submissions by an educational
institutions, from $25 million to $28.3
million.
B. Paperwork Reduction Act
The Paperwork Reduction Act, Public
Law 96–511, does not apply to this
rulemaking, because this rule imposes
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Federal Register / Vol. 70, No. 237 / Monday, December 12, 2005 / Proposed Rules
no paperwork burden on offerors,
affected contractors and subcontractors,
or members of the public which requires
the approval of OMB under 44 U.S.C.
3501, et seq.
PART 9903—CONTRACT COVERAGE
C. Executive Order 12866 and the
Regulatory Flexibility Act
Subpart 9903.2—CAS Program
Requirements
The economic impact of this rule on
contractors and subcontractors is
expected to be minor. As a result, the
Board has determined that this rule is
not significant under the provisions of
Executive Order 12866, and that a
regulatory impact analysis will not be
required. Furthermore, this rule will not
have a significant impact on a
substantial number of small businesses
because small businesses are exempt
from the application of the Cost
Accounting Standards. Therefore, this
rule does not require a regulatory
flexibility analysis under the Regulatory
Flexibility Act of 1980.
4. Section 9903.201–1 is amended by
revising paragraphs (b)(2) and (b)(7) to
read as follows:
D. Public Comments
Interested persons are invited to
participate by submitting data, views or
arguments with respect to this proposed
rule. All comments must be in writing
and submitted to the address indicated
in the ADDRESSES section.
List of Subjects in 48 CFR Part 9903
Accounting, Government
procurement.
For the reasons set forth in this
preamble, chapter 99 of title 48 of the
Code of Federal Regulations is proposed
to be amended as set forth below:
PART 9901—RULES AND
PROCEDURES
1. The authority citation for part 9901
is revised to read as follows:
Authority: 41 U.S.C. 422(f).
2. Revise section 9901.306 to read as
follows:
Standards applicability.
Cost Accounting Standards
promulgated by the Board shall be
mandatory for use by all executive
agencies and by contractors and
subcontractors in estimating,
accumulating, and reporting costs in
connection with pricing and
administration of, and settlement of
disputes concerning, all negotiated
prime contract and subcontract
procurements with the United States
Government in excess of $550,000, other
than contracts or subcontracts that have
been exempted by the Board’s
regulations.
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15:48 Dec 09, 2005
Authority: 41 U.S.C. 422(f).
§ 9903.201–1
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CAS applicability.
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(b) * * *
(2) Negotiated contracts and
subcontracts not in excess of $550,000.
For purposes of this paragraph (b)(2) an
order issued by one segment to another
segment shall be treated as a
subcontract.
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(7) Contracts or subcontracts of less
than $8.5 million, provided that, at the
time of award, the business unit of the
contractor or subcontractor is not
currently performing any CAS-covered
contracts or subcontracts valued at $8.5
million or greater.
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5. Section 9903–201–2 is amended by
revising paragraphs (a)(1) and (2), (b)(1)
and (2), and (c)(3) and (5) to read as
follows:
§ 9903.201–2
Joshua B. Bolten,
Director.
§ 9901.306
3. The authority citation for part 9903
continues to read as follows:
Types of CAS coverage.
(a) * * *
(1) Receive a single CAS-covered
contract award of $56.5 million or more;
(2) Receive $56.5 million or more in
net CAS-covered awards during its
preceding accounting period.
(b) Modified coverage. (1) Modified
CAS coverage requires only that the
contractor comply with Standard
9904.401, Consistency in Estimating,
Accumulating, and Reporting Costs,
Standard 9904.402, Consistency in
Allocating Costs Incurred for the Same
Purpose, Standard 9904.405,
Accounting for Unallowable Costs and
Standard 9904.406, Cost Accounting
Standard—Cost Accounting Period.
Modified, rather than full, CAS coverage
may be applied to a covered contract if
less than $56.5 million awarded to a
business unit that received less than
$56.5 million in net CAS-covered
awards in the immediately preceding
cost accounting period.
(2) If any one contract is awarded
with modified CAS coverage, all CAScovered contracts awarded to that
business unit during that cost
accounting period must also have
modified coverage with the following
exceptions: if the business unit receives
a single CAS-covered contract award of
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$56.5 million or more, the contract must
be subject to full CAS coverage.
Thereafter, any covered contract
awarded in the same cost accounting
period must also be subject to full CAS
coverage.
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(c) * * *
(3) Applicable Standards. Coverage
for educational institutions requires that
the business unit comply with all of the
CAS specified in part 9905 that are in
effect on the date of the contract award
and with any CAS that become
applicable because of later award of a
CAS-covered contract. This coverage
applies to business units that receive
negotiated contracts in excess of
$550,000, except for CAS-covered
contracts awarded to FFRDCs operated
by an educational institution.
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(5) Contract Clauses. The contract
clause at 9903.201–4(e) shall be
incorporated in each negotiated contract
and subcontract awarded to an
educational institution when the
negotiated contract or subcontract price
exceeds $550,000. For CAS-covered
contracts awarded to an FFRDC
operated by an educational institution,
however, the full or modified CAS
contract clause specified at 9903.201–
4(a) or (c), as applicable, shall be
incorporated.
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6. Section 9903–201–3 is amended by
revising the clause heading; by revising
paragraphs (a) and (c)(3) in Part I of the
clause, by revising the CAUTION
paragraph following paragraph (c)(4) in
Part I of the clause; and by revising Part
II of the clause, to read as follows:
§ 9903.201–3
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Solicitation provisions.
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Cost Accounting Standards Notices and
Certification (October 2005)
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I. Disclosure Statement—Cost Accounting
Practices and Certification
(a) Any contract in excess of $550,000
resulting from this solicitation, except for
those contracts which are exempt as
specified in 9903.201–1.
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(c) * * *
(3) Certificate of Monetary Exemption.
The offeror hereby certifies that the offeror,
together with all divisions, subsidiaries, and
affiliates under common control, did not
receive net awards of negotiated prime
contracts and subcontracts subject to CAS
totaling $56.5 million or more in the cost
accounting period immediately preceding the
period in which this proposal was submitted.
The offeror further certifies that if such status
changes before an award resulting from this
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proposal, the offeror will advise the
Contracting Officer immediately.
(4) * * *
Caution: Offerors currently required to
disclose because they were awarded a CAScovered prime contract or subcontract of
$56.5 million or more in the current cost
accounting period may not claim this
exemption (4). Further, the exemption
applies only in connection with proposals
submitted before expiration of the 90-day
period following the cost accounting period
in which the monetary exemption was
exceeded.
II. Cost Accounting Standards—Eligibility for
Modified Contract Coverage
If the offeror is eligible to use the modified
provisions of 9903.201–2(b) and elects to do
so, the offeror shall indicate by checking the
box below. Checking the box below shall
mean that the resultant contract is subject to
the Disclosure and Consistency of Cost
Accounting Practices clause in lieu of the
Cost Accounting Standards clause.
The offeror hereby claims an exemption
from the Cost Accounting Standards clause
under the provisions of 9903.201–2(b) and
certifies that the offeror is eligible for use of
the Disclosure and Consistency of Cost
Accounting Practices clause because during
the cost accounting period immediately
preceding the period in which this proposal
was submitted, the offeror received less than
$56.5 million in awards of CAS-covered
prime contracts and subcontracts. The offeror
further certifies that if such status changes
before an award resulting from this proposal,
the offeror will advise the Contracting Officer
immediately.
Caution: An offeror may not claim the
above eligibility for modified contract
coverage if this proposal is expected to result
in the award of a CAS-covered contract of
$56.5 million or more or if, during its current
cost accounting period, the offeror has been
awarded a single CAS-covered prime contract
or subcontract of $56.5 million or more.
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7. Section 9903.201–4 is amended by
revising:
A. The clause heading in paragraph
(a)(2);
B. Paragraph (d) of the clause in
paragraph (a);
C. Paragraph (c)(1);
D. The clause heading in paragraph
(c)(2);
E. Paragraph (d)(2) of the clause in
paragraph (c);
F. The clause heading in paragraph
(e)(2); and
G. Paragraph (d) introductory text and
(d)(2) of the clause in paragraph (e).
The revisions read as follows:
enters into, the substance of this clause,
except paragraph (b), and shall require such
inclusion in all other subcontracts, of any
tier, including the obligation to comply with
all CAS in effect on the subcontractor’s
award date or if the subcontractor has
submitted cost or pricing data, on the date of
final agreement on price as shown on the
subcontractor’s signed Certificate of Current
Cost or Pricing Data. If the subcontract is
awarded to a business unit which pursuant
to 9903.201–2 is subject to other types of
CAS coverage, the substance of the
applicable clause set forth in 9903.201–4
shall be inserted. This requirement shall
apply only to negotiated subcontracts in
excess of $550,000, except that the
requirement shall not apply to negotiated
subcontracts otherwise exempt from the
requirement to include a CAS clause as
specified in 9903.201–1.
(End of Clause)
9903.201–5
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9903.202–1
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(c) Disclosure and Consistency of Cost
Accounting Practices. (1) The
contracting officer shall insert the clause
set forth below, Disclosure and
Consistency of Cost Accounting
Practices, in negotiated contracts when
the contract amount is over $550,000
but less than $56.5 million, and the
offeror certifies it is eligible for and
elects to use modified CAS coverage
(see 9903.201–2, unless the clause
prescribed in paragraph (d) of this
subsection is used).
(2) * * *
Disclosure and Consistency of Cost
Accounting Practices (October 2005)
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(d) * * *
(2) This requirement shall apply only to
negotiated subcontracts in excess of
$550,000.
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(e) Cost Accounting Standards—
Educational Institutions. * * *
(2) * * *
Cost Accounting Standards—Educational
Institution (October 2005)
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Cost Accounting Standards (October 2005)
(d) The Contractor shall include in all
negotiated subcontracts which the Contractor
enters into, the substance of this clause,
except paragraph (b), and shall require such
inclusion in all other subcontracts, of any
tier, including the obligation to comply with
all applicable CAS in effect on the
subcontractor’s award date or if the
subcontractor has submitted cost or pricing
data, on the date of final agreement on price
as shown on the subcontractor’s signed
Certificate of Current Cost or Pricing Data,
except that:
(1) * * *
(2) This requirement shall apply only to
negotiated subcontracts in excess of
$550,000.
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9903.201–4
Contract clauses.
(a) * * *
(2) * * *
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(d) The contractor shall include in all
negotiated subcontracts which the Contractor
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8. Section 9903.201–5 is amended by
revising paragraph (a) to read as follows:
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Waiver.
(a) The head of an executive agency
may waive the applicability of the Cost
Accounting Standards for a contract or
subcontract with a value of less than
$17 million, if that official determines,
in writing, that the business unit of the
contractor or subcontractor that will
perform the work:
(1) Is primarily engaged in the sale of
commercial items; and
(2) Would not otherwise be subject to
the Cost Accounting Standards under
this Chapter.
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9903.202
Disclosure requirements.
9. Section 9903–202–1 is amended by
revising (b)(1) and (2); (c); and (f)(2)(i),
(ii), and (iii) to read as follows:
General requirements.
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(b) Completed Disclosure Statements
are required in the following
circumstances:
(1) Any business unit that is selected
to receive a CAS-covered contract or
subcontract of $56.5 million or more
shall submit a Disclosure Statement
before award.
(2) Any company which, together
with its segments, received net awards
of negotiated prime contracts and
subcontracts subject to CAS totaling
$56.5 million or more in its most recent
cost accounting period, must submit a
Disclosure Statement before award of its
first CAS-covered contract in the
immediately following cost accounting
period. However, if the first CAScovered contract is received within 90
days of the start of the cost accounting
period, the contractor is not required to
file until the end of 90 days.
(c) When a Disclosure Statement is
required, a separate Disclosure
Statement must be submitted for each
segment whose costs included in the
total price of any CAS-covered contract
or subcontract exceed $550,000, unless:
(1) The contract or subcontract is of
the type or value exempted by
9903.201–1 or
(2) In the most recently completed
cost accounting period the segment’s
CAS-covered awards are less than 30
percent of total segment sales for the
period and less than $11.5 million.
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(f) Educational institutions-disclosure
requirements.
(1) * * *
(2) * * *
(i) Any business unit of an
educational institution that is selected
to receive a CAS-covered contract or
subcontract in excess of $550,000 and is
part of a college or university location
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Federal Register / Vol. 70, No. 237 / Monday, December 12, 2005 / Proposed Rules
listed in Exhibit A of Office of
Management and Budget (OMB)
Circular A–21 shall submit a Disclosure
Statement before award. A Disclosure
Statement is not required, however, if
the listed entity can demonstrate that
the net amount of Federal contract and
financial assistance awards received
during its immediately preceding cost
accounting period was less than $28.5
million.
(ii) Any business unit that is selected
to receive a CAS-covered contract or
subcontract of $28.5 million or more
shall submit a Disclosure Statement
before award.
(iii) Any educational institution
which, together with its segments,
received net awards of negotiated prime
contracts and subcontracts subject to
CAS totaling $28.5 million or more in
its most recent cost accounting period,
of which, at least one award exceeded
$1 million, must submit a Disclosure
Statement before award of its first CAScovered contract in the immediately
following cost accounting period.
However, if the first CAS-covered
contract is received within 90 days of
the start of the cost accounting period,
the institution is not required to file
until the end of 90 days.
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[FR Doc. 05–23647 Filed 12–9–05; 8:45 am]
BILLING CODE 3110–01–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
50 CFR Part 216
[Docket No. 051110296–5296–01; I.D.
102405A]
RIN 0648–AU02
Protecting Spinner Dolphins in the
Main Hawaiian Islands From Human
Activities that Cause ‘‘Take,’’ as
Defined in the Marine Mammal
Protection Act and Its Implementing
Regulations, or To Otherwise
Adversely Affect the Dolphins
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Advance notice of proposed
rulemaking.
AGENCY:
SUMMARY: NMFS is considering whether
to propose regulations to protect wild
spinner dolphins (Stenella longirostris)
in the main Hawaiian Islands from
‘‘take,’’ as defined in the Marine
Mammal Protection Act (MMPA) and its
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15:48 Dec 09, 2005
Jkt 208001
implementing regulations, or to
otherwise adversely affect the dolphins.
The scope of this advance notice of
proposed rulemaking (ANPR)
encompasses the activities of any person
or conveyance that may result in the
unauthorized taking of spinner dolphins
and/or that may diminish the value to
the dolphins of habitat routinely used
by them for resting and/or that may
cause detrimental individual-level and
population-level impacts. The proposed
regulation would apply only to the main
Hawaiian Islands and only to spinner
dolphins. NMFS requests comments on
whether—and if so, what type of—
conservation measures, regulations, and,
if necessary, other measures would be
appropriate to protect spinner dolphins
in the main Hawaiian Islands from the
effects of these activities.
DATES: Comments must be received at
the appropriate address (see ADDRESSES)
no later than January 11, 2006.
ADDRESSES: You may submit comments
by any of the following methods:
• E-mail: 0648–
AU02.NOA@noaa.gov. Include in the
subject line the following document
identifier: 0648–AU02–NOA.
• Federal e-rulemaking Portal: https://
www.regulations.gov.
• Mail: Marine Mammal Branch
Chief, Protected Resources Division,
Pacific Islands Regional Office, National
Marine Fisheries Service, 1601
Kapiolani Boulevard, Suite 1110,
Honolulu, HI 96814.
FOR FURTHER INFORMATION CONTACT:
Chris Yates or Jennifer Sepez, Pacific
Islands Regional Office, 808–944–2105;
or Trevor Spradlin, Office of Protected
Resources, 301–713–2322.
SUPPLEMENTARY INFORMATION:
Background
Viewing wild marine mammals in
Hawaii is a popular recreational activity
for both tourists and residents alike. In
the past, most recreational viewing
focused on humpback whales
(Megaptera novaeangliae) during the
winter months when the whales migrate
from their feeding grounds off the coast
of Alaska to Hawaii’s warm and
protected waters to breed and calve.
However, in recent years, recreational
activities have increasingly focused on
viewing small cetaceans, with a
particular emphasis on spinner
dolphins (Stenella longirostris), which
are routinely found close to shore in
shallow coves and bays and other areas
throughout the main Hawaiian Islands.
NMFS is concerned that some of these
activities cause unauthorized taking of
dolphins, diminish the value to the
dolphins of habitat routinely used by
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them for resting, and cause detrimental
individual-level and population-level
impacts.
The biology and behavior of Hawaiian
spinner dolphins has been well
documented in the scientific literature.
Hawaiian spinner dolphins are
identified as a race of Pacific spinner
dolphins found in and around the
Hawaiian Islands, including both the
main Islands of Hawaii and the
Northwestern Hawaiian Islands (Norris
et al. 1994, page 17). Hawaiian spinner
dolphins routinely utilize shallow coves
and bays and other areas close to shore
during the day to rest, care for their
young and avoid predators before
traveling to deeper water at night to
¨
hunt for food (Wursig et al. 1994, Norris
1994). As the dolphins begin or end
their resting period, they engage in
aerial spinning and leaping behaviors
¨
that are noticeable from shore (Wursig et
al. 1994). However, when they are in a
period of deep rest, their behavior
consists of synchronous dives and
extended periods swimming in quiet
formation along the shallow bottom
(see: Norris and Dohl 1980, Norris et al.
¨
1985, Wells and Norris 1994, Wursig et
al. 1994).
Scientific research studies have
documented human disturbance of
Hawaiian spinner dolphins during their
resting periods along the west coast of
the Big Island of Hawaii, most notably
in and around Kealakekua Bay. Norris
and Dohl (1980) noted that ‘‘cruise
boats’’ would seek out and run through
groups of spinner dolphins during an
initial study of the dolphins in 1970,
and in follow up research, Norris et al.
(1985) found that spinner dolphins were
particularly sensitive to disturbance
during the early stage of their entry into
the bay. Forest (2001) compared
sightings records of spinner dolphins in
Kealakekua Bay from 1979–1980 and
1993–1994, and found that the dolphins
were utilizing the bay and engaging in
aerial behaviors less frequently than
before, and suggested increasing human
disturbance as a cause. Courbis (2004)
reported high levels of vessel and
swimmer traffic in Kealakekua Bay and
neighboring Honaunau Bay and
Kauhako Bay, and found that spinner
dolphins exhibited decreased aerial
activity during their entry and exit into
Kealakekua Bay when compared to
previous studies, as well as increased
aerial activity during mid-day when
dolphins typically rest. Spinner
dolphins in Kealakekua Bay also
appeared to have shifted their preferred
resting area in response to vessel and
swimmer presence. In Kauhako Bay,
dolphins were documented avoiding
swimmers and leaving the bay in
E:\FR\FM\12DEP1.SGM
12DEP1
]]>Agencies
[Federal Register Volume 70, Number 237 (Monday, December 12, 2005)]
[Proposed Rules]
[Pages 73423-73426]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-23647]
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OFFICE OF MANAGEMENT AND BUDGET
Office of Federal Procurement Policy
48 CFR Parts 9901 and 9903
Cost Accounting Standards Board (CAS) Changes to Acquisition
Thresholds
AGENCY: Cost Accounting Standards Board, Office of Federal Procurement
Policy, OMB.
ACTION: Proposed rule with request for comment.
-----------------------------------------------------------------------
SUMMARY: The Cost Accounting Standards (CAS) Board is proposing to
adjust the CAS application and full coverage thresholds for inflation
in accordance with section 807 of the Ronald W. Reagan National Defense
Authorization Act for Fiscal Year 2005 (Pub. L. 108-375).
DATES: Comments upon this proposed rule must be in writing and must be
received by February 10, 2006.
ADDRESSES: Due to delays in OMB's receipt and processing of mail,
respondents are strongly encouraged to submit comments electronically
to ensure timely receipt. Electronic comments may be submitted to
casb2@omb.eop.gov. Please put the full body of your comments in the
text of the electronic message and also as an attachment readable in
either MS Word or Corel WordPerfect. Please include your name, title,
organization, postal address, telephone number, and e-mail address in
the text of the message. Comments may also be submitted via facsimile
to (202) 395-5105.
FOR FURTHER INFORMATION CONTACT: David J. Capitano, Cost Accounting
Standards Board (telephone: 703-847-7486).
SUPPLEMENTARY INFORMATION:
A. Background
Analysis of Statutory Acquisition-Related Thresholds
Section 807 provides for adjustment every 5 years of acquisition-
related thresholds, except for thresholds set by the Davis-Bacon Act,
Service Contract Act, and trade agreements. The statute requires that
the adjustment be based on inflation, using the Consumer Price Index
(CPI) for all-urban consumers. Acquisition-related thresholds in
statutes that were in effect on October 1, 2000, are subject to 5 years
of inflation. For purposes of this proposed rule, the calculation of
escalation is based on the CPI from December 1999 to December 2004 (the
most recent available data), which currently computes at 1.1307, as
determined by the Federal Acquisition Regulatory (FAR) Council.
Once the escalation factor is applied to the acquisition-related
threshold, the law requires rounding of the calculated threshold as
follows:
< $10,000............................. Nearest $500
$10,000-<$100,000..................... Nearest $5,000
$100,000-<$1,000,000.................. Nearest $50,000
$1,000,000 or more.................... Nearest $500,000
Applying the 1.1307 factor and the rounding criteria described
above, the CAS thresholds have been revised as follows:
(a) For contract applicability, from $500,000 to $550,000;
(b) For applicability to a business unit, from $7.5 million to $8.5
million;
(c) For waiver authority, from $15 million to $17 million;
(d) For full coverage, from $50 million to $56.5 million;
(e) For disclosure statement submissions by a company (other than
educational institutions), from $50 million to $56.5 million;
(f) For disclosure statement submissions by a segment of a company,
from $10 million to $11.5 million; and
(g) For disclosure statement submissions by an educational
institutions, from $25 million to $28.3 million.
B. Paperwork Reduction Act
The Paperwork Reduction Act, Public Law 96-511, does not apply to
this rulemaking, because this rule imposes
[[Page 73424]]
no paperwork burden on offerors, affected contractors and
subcontractors, or members of the public which requires the approval of
OMB under 44 U.S.C. 3501, et seq.
C. Executive Order 12866 and the Regulatory Flexibility Act
The economic impact of this rule on contractors and subcontractors
is expected to be minor. As a result, the Board has determined that
this rule is not significant under the provisions of Executive Order
12866, and that a regulatory impact analysis will not be required.
Furthermore, this rule will not have a significant impact on a
substantial number of small businesses because small businesses are
exempt from the application of the Cost Accounting Standards.
Therefore, this rule does not require a regulatory flexibility analysis
under the Regulatory Flexibility Act of 1980.
D. Public Comments
Interested persons are invited to participate by submitting data,
views or arguments with respect to this proposed rule. All comments
must be in writing and submitted to the address indicated in the
ADDRESSES section.
List of Subjects in 48 CFR Part 9903
Accounting, Government procurement.
Joshua B. Bolten,
Director.
For the reasons set forth in this preamble, chapter 99 of title 48
of the Code of Federal Regulations is proposed to be amended as set
forth below:
PART 9901--RULES AND PROCEDURES
1. The authority citation for part 9901 is revised to read as
follows:
Authority: 41 U.S.C. 422(f).
2. Revise section 9901.306 to read as follows:
Sec. 9901.306 Standards applicability.
Cost Accounting Standards promulgated by the Board shall be
mandatory for use by all executive agencies and by contractors and
subcontractors in estimating, accumulating, and reporting costs in
connection with pricing and administration of, and settlement of
disputes concerning, all negotiated prime contract and subcontract
procurements with the United States Government in excess of $550,000,
other than contracts or subcontracts that have been exempted by the
Board's regulations.
PART 9903--CONTRACT COVERAGE
3. The authority citation for part 9903 continues to read as
follows:
Authority: 41 U.S.C. 422(f).
Subpart 9903.2--CAS Program Requirements
4. Section 9903.201-1 is amended by revising paragraphs (b)(2) and
(b)(7) to read as follows:
Sec. 9903.201-1 CAS applicability.
* * * * *
(b) * * *
(2) Negotiated contracts and subcontracts not in excess of
$550,000. For purposes of this paragraph (b)(2) an order issued by one
segment to another segment shall be treated as a subcontract.
* * * * *
(7) Contracts or subcontracts of less than $8.5 million, provided
that, at the time of award, the business unit of the contractor or
subcontractor is not currently performing any CAS-covered contracts or
subcontracts valued at $8.5 million or greater.
* * * * *
5. Section 9903-201-2 is amended by revising paragraphs (a)(1) and
(2), (b)(1) and (2), and (c)(3) and (5) to read as follows:
Sec. 9903.201-2 Types of CAS coverage.
(a) * * *
(1) Receive a single CAS-covered contract award of $56.5 million or
more;
(2) Receive $56.5 million or more in net CAS-covered awards during
its preceding accounting period.
(b) Modified coverage. (1) Modified CAS coverage requires only that
the contractor comply with Standard 9904.401, Consistency in
Estimating, Accumulating, and Reporting Costs, Standard 9904.402,
Consistency in Allocating Costs Incurred for the Same Purpose, Standard
9904.405, Accounting for Unallowable Costs and Standard 9904.406, Cost
Accounting Standard--Cost Accounting Period. Modified, rather than
full, CAS coverage may be applied to a covered contract if less than
$56.5 million awarded to a business unit that received less than $56.5
million in net CAS-covered awards in the immediately preceding cost
accounting period.
(2) If any one contract is awarded with modified CAS coverage, all
CAS-covered contracts awarded to that business unit during that cost
accounting period must also have modified coverage with the following
exceptions: if the business unit receives a single CAS-covered contract
award of $56.5 million or more, the contract must be subject to full
CAS coverage. Thereafter, any covered contract awarded in the same cost
accounting period must also be subject to full CAS coverage.
* * * * *
(c) * * *
(3) Applicable Standards. Coverage for educational institutions
requires that the business unit comply with all of the CAS specified in
part 9905 that are in effect on the date of the contract award and with
any CAS that become applicable because of later award of a CAS-covered
contract. This coverage applies to business units that receive
negotiated contracts in excess of $550,000, except for CAS-covered
contracts awarded to FFRDCs operated by an educational institution.
* * * * *
(5) Contract Clauses. The contract clause at 9903.201-4(e) shall be
incorporated in each negotiated contract and subcontract awarded to an
educational institution when the negotiated contract or subcontract
price exceeds $550,000. For CAS-covered contracts awarded to an FFRDC
operated by an educational institution, however, the full or modified
CAS contract clause specified at 9903.201-4(a) or (c), as applicable,
shall be incorporated.
* * * * *
6. Section 9903-201-3 is amended by revising the clause heading; by
revising paragraphs (a) and (c)(3) in Part I of the clause, by revising
the CAUTION paragraph following paragraph (c)(4) in Part I of the
clause; and by revising Part II of the clause, to read as follows:
Sec. 9903.201-3 Solicitation provisions.
* * * * *
Cost Accounting Standards Notices and Certification (October 2005)
* * * * *
I. Disclosure Statement--Cost Accounting Practices and
Certification
(a) Any contract in excess of $550,000 resulting from this
solicitation, except for those contracts which are exempt as
specified in 9903.201-1.
* * * * *
(c) * * *
(3) Certificate of Monetary Exemption.
The offeror hereby certifies that the offeror, together with all
divisions, subsidiaries, and affiliates under common control, did
not receive net awards of negotiated prime contracts and
subcontracts subject to CAS totaling $56.5 million or more in the
cost accounting period immediately preceding the period in which
this proposal was submitted. The offeror further certifies that if
such status changes before an award resulting from this
[[Page 73425]]
proposal, the offeror will advise the Contracting Officer
immediately.
(4) * * *
Caution: Offerors currently required to disclose because they
were awarded a CAS-covered prime contract or subcontract of $56.5
million or more in the current cost accounting period may not claim
this exemption (4). Further, the exemption applies only in
connection with proposals submitted before expiration of the 90-day
period following the cost accounting period in which the monetary
exemption was exceeded.
II. Cost Accounting Standards--Eligibility for Modified Contract
Coverage
If the offeror is eligible to use the modified provisions of
9903.201-2(b) and elects to do so, the offeror shall indicate by
checking the box below. Checking the box below shall mean that the
resultant contract is subject to the Disclosure and Consistency of
Cost Accounting Practices clause in lieu of the Cost Accounting
Standards clause.
The offeror hereby claims an exemption from the Cost Accounting
Standards clause under the provisions of 9903.201-2(b) and certifies
that the offeror is eligible for use of the Disclosure and
Consistency of Cost Accounting Practices clause because during the
cost accounting period immediately preceding the period in which
this proposal was submitted, the offeror received less than $56.5
million in awards of CAS-covered prime contracts and subcontracts.
The offeror further certifies that if such status changes before an
award resulting from this proposal, the offeror will advise the
Contracting Officer immediately.
Caution: An offeror may not claim the above eligibility for
modified contract coverage if this proposal is expected to result in
the award of a CAS-covered contract of $56.5 million or more or if,
during its current cost accounting period, the offeror has been
awarded a single CAS-covered prime contract or subcontract of $56.5
million or more.
* * * * *
7. Section 9903.201-4 is amended by revising:
A. The clause heading in paragraph (a)(2);
B. Paragraph (d) of the clause in paragraph (a);
C. Paragraph (c)(1);
D. The clause heading in paragraph (c)(2);
E. Paragraph (d)(2) of the clause in paragraph (c);
F. The clause heading in paragraph (e)(2); and
G. Paragraph (d) introductory text and (d)(2) of the clause in
paragraph (e).
The revisions read as follows:
9903.201-4 Contract clauses.
(a) * * *
(2) * * *
Cost Accounting Standards (October 2005)
* * * * *
(d) The contractor shall include in all negotiated subcontracts
which the Contractor enters into, the substance of this clause,
except paragraph (b), and shall require such inclusion in all other
subcontracts, of any tier, including the obligation to comply with
all CAS in effect on the subcontractor's award date or if the
subcontractor has submitted cost or pricing data, on the date of
final agreement on price as shown on the subcontractor's signed
Certificate of Current Cost or Pricing Data. If the subcontract is
awarded to a business unit which pursuant to 9903.201-2 is subject
to other types of CAS coverage, the substance of the applicable
clause set forth in 9903.201-4 shall be inserted. This requirement
shall apply only to negotiated subcontracts in excess of $550,000,
except that the requirement shall not apply to negotiated
subcontracts otherwise exempt from the requirement to include a CAS
clause as specified in 9903.201-1.
(End of Clause)
* * * * *
(c) Disclosure and Consistency of Cost Accounting Practices. (1)
The contracting officer shall insert the clause set forth below,
Disclosure and Consistency of Cost Accounting Practices, in negotiated
contracts when the contract amount is over $550,000 but less than $56.5
million, and the offeror certifies it is eligible for and elects to use
modified CAS coverage (see 9903.201-2, unless the clause prescribed in
paragraph (d) of this subsection is used).
(2) * * *
Disclosure and Consistency of Cost Accounting Practices (October 2005)
* * * * *
(d) * * *
(2) This requirement shall apply only to negotiated subcontracts
in excess of $550,000.
* * * * *
(e) Cost Accounting Standards--Educational Institutions. * * *
(2) * * *
Cost Accounting Standards--Educational Institution (October 2005)
* * * * *
(d) The Contractor shall include in all negotiated subcontracts
which the Contractor enters into, the substance of this clause,
except paragraph (b), and shall require such inclusion in all other
subcontracts, of any tier, including the obligation to comply with
all applicable CAS in effect on the subcontractor's award date or if
the subcontractor has submitted cost or pricing data, on the date of
final agreement on price as shown on the subcontractor's signed
Certificate of Current Cost or Pricing Data, except that:
(1) * * *
(2) This requirement shall apply only to negotiated subcontracts
in excess of $550,000.
* * * * *
8. Section 9903.201-5 is amended by revising paragraph (a) to read
as follows:
9903.201-5 Waiver.
(a) The head of an executive agency may waive the applicability of
the Cost Accounting Standards for a contract or subcontract with a
value of less than $17 million, if that official determines, in
writing, that the business unit of the contractor or subcontractor that
will perform the work:
(1) Is primarily engaged in the sale of commercial items; and
(2) Would not otherwise be subject to the Cost Accounting Standards
under this Chapter.
* * * * *
9903.202 Disclosure requirements.
9. Section 9903-202-1 is amended by revising (b)(1) and (2); (c);
and (f)(2)(i), (ii), and (iii) to read as follows:
9903.202-1 General requirements.
* * * * *
(b) Completed Disclosure Statements are required in the following
circumstances:
(1) Any business unit that is selected to receive a CAS-covered
contract or subcontract of $56.5 million or more shall submit a
Disclosure Statement before award.
(2) Any company which, together with its segments, received net
awards of negotiated prime contracts and subcontracts subject to CAS
totaling $56.5 million or more in its most recent cost accounting
period, must submit a Disclosure Statement before award of its first
CAS-covered contract in the immediately following cost accounting
period. However, if the first CAS-covered contract is received within
90 days of the start of the cost accounting period, the contractor is
not required to file until the end of 90 days.
(c) When a Disclosure Statement is required, a separate Disclosure
Statement must be submitted for each segment whose costs included in
the total price of any CAS-covered contract or subcontract exceed
$550,000, unless:
(1) The contract or subcontract is of the type or value exempted by
9903.201-1 or
(2) In the most recently completed cost accounting period the
segment's CAS-covered awards are less than 30 percent of total segment
sales for the period and less than $11.5 million.
* * * * *
(f) Educational institutions-disclosure requirements.
(1) * * *
(2) * * *
(i) Any business unit of an educational institution that is
selected to receive a CAS-covered contract or subcontract in excess of
$550,000 and is part of a college or university location
[[Page 73426]]
listed in Exhibit A of Office of Management and Budget (OMB) Circular
A-21 shall submit a Disclosure Statement before award. A Disclosure
Statement is not required, however, if the listed entity can
demonstrate that the net amount of Federal contract and financial
assistance awards received during its immediately preceding cost
accounting period was less than $28.5 million.
(ii) Any business unit that is selected to receive a CAS-covered
contract or subcontract of $28.5 million or more shall submit a
Disclosure Statement before award.
(iii) Any educational institution which, together with its
segments, received net awards of negotiated prime contracts and
subcontracts subject to CAS totaling $28.5 million or more in its most
recent cost accounting period, of which, at least one award exceeded $1
million, must submit a Disclosure Statement before award of its first
CAS-covered contract in the immediately following cost accounting
period. However, if the first CAS-covered contract is received within
90 days of the start of the cost accounting period, the institution is
not required to file until the end of 90 days.
* * * * *
[FR Doc. 05-23647 Filed 12-9-05; 8:45 am]
BILLING CODE 3110-01-P
