Federal Acquisition Regulation; FAR Case 2005-016, Performance-based Payments, 75186-75188 [06-9678]
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75186
Federal Register / Vol. 71, No. 240 / Thursday, December 14, 2006 / Proposed Rules
jlentini on PROD1PC65 with PROPOSAL
complete discussion of the proposed
compliance deadline.
B. What Is the New Information EPA Is
Making Available for Review and
Comment?
• Comments provided by Aerospace
Industry Association and an airline,
indicating that changing solvents
involves a rigorous approval process to
meet requirements of the Federal
Aviation Administration (FAA) and of
the original equipment manufacturer
(OEM). The commenter indicates that
such an approval process takes
considerable time and requires many
steps.
• Comments provided by HSIA
indicated that a compliance period of as
much as 10 years would be required for
industry to complete the multi-step
process of upgrading degreasing
operations. The commenter cites
installations of new equipment at an
existing facility may require the
following: (1) Extended time to test
performance of untried degreasing
technologies for their particular
application, (2) additional or redesigned
floor space, (3) customer approval of
new degreasing techniques and
machines, (4) amending air permits; (5)
amending government agency directives
on cleaning protocols. HSIA did not
submit data to support this comment.
• Comments and data provided by the
American Safety Razor Company
indicated that EPA should remain
consistent with the proposed HON rule
and provide affected facilities three (3)
years after the effective date of the
promulgated standard.
• Comments and data provided by
Salem Tubing Company on the
compliance period for sources of
existing HSC machines and constructed
or reconstructed HSC machines after
August 17, 2006. The facility indicated
that vacuum-to-vacuum cleaning is not
a feasible option for the narrow tube
manufacturing industry because of the
large size of their degreasing machines
and the fact that the vacuum-to-vacuum
technology is not currently available in
the machines sizes required. The
commenter contends that in order to
design, test and implement such a
system would take much longer than the
proposed compliance period.
• Comments provided by the HSIA
indicated that the compliance schedule
should be amended to (1) require new
facilities constructed after the date of
promulgation to be in compliance upon
startup; (2) consider new facilities
constructed prior to the date of
promulgation to be existing facilities; (3)
allow existing HSC facilities that
installed new equipment after the date
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17:28 Dec 13, 2006
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of proposal, but prior to the date of
promulgation, 10 years to come into
compliance with any new requirements
consistent with CAA section 112(i)(7),
and (4) allow the maximum amount of
time possible for existing HSC facilities
to come into compliance.
DEPARTMENT OF DEFENSE
C. What Additional Supporting Data or
Documentation Do I Need To Provide
With My Comments?
48 CFR Parts 32 and 52
EPA is soliciting comment on the new
information provided described above
that relates to the issues identified at the
outset of this NODA. In addition, as for
the narrow tubing manufacturing
facilities, aerospace manufacturing and
maintenance facilities, large military
vehicle maintenance operations,
facilities that use multiple degreaser
machines, and facilities that use
continuous web cleaners, EPA
specifically seeks data and information
from these facilities including, but not
limited to, information on the time to
design and install new HSC machines,
the lifespan of the typical HSC machine
used in the facilities of interest (listed
above), the time required to seek
additional permits from State and local
air permitting agencies, the time
required for FAA and OEM approvals to
vary or change degreasing cleaning
procedures, whether a 2-year or a 3-year
compliance period is appropriate, or
data on how much time it would take
to comply with the proposed
requirements.
RIN 9000–AK64
List of Subjects in 40 CFR Part 63
Environmental protection,
Administrative practice and procedure,
Air pollution control, Hazardous
substances, Intergovernmental relations,
Reporting and recordkeeping
requirements.
Dated: December 8, 2006.
Stephen D. Page,
Director, Office of Air Quality Planning and
Standards.
[FR Doc. E6–21296 Filed 12–13–06; 8:45 am]
BILLING CODE 6560–50–P
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GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
[FAR Case 2005–016; Docket 2006–0020;
Sequence 14]
Federal Acquisition Regulation; FAR
Case 2005–016, Performance-based
Payments
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Proposed rule.
AGENCIES:
SUMMARY: The Civilian Agency
Acquisition Council and the Defense
Acquisition Regulations Council
(Councils) are proposing to amend the
Federal Acquisition Regulation (FAR) to
implement recommendations to change
the regulations related to performancebased payments (PBP).
DATES: Interested parties should submit
written comments to the FAR
Secretariat on or before February 12,
2007 to be considered in the
formulation of a final rule.
ADDRESSES: Submit comments
identified by FAR case 2005–016 by any
of the following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Search for any
document by first selecting the proper
document types and selecting ‘‘Federal
Acquisition Regulation’’ as the agency
of choice. At the ‘‘Keyword’’ prompt,
type in the FAR case number (for
example, FAR Case 2006–001) and click
on the ‘‘Submit’’ button. Please include
any personal and/or business
information inside the document.You
may also search for any document by
clicking on the ‘‘Advanced search/
document search’’ tab at the top of the
screen, selecting from the agency field
‘‘Federal Acquisition Regulation’’, and
typing the FAR case number in the
keyword field. Select the ‘‘Submit’’
button.
• 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 FAR case 2005–016 in all
correspondence related to this case. All
comments received will be posted
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Federal Register / Vol. 71, No. 240 / Thursday, December 14, 2006 / Proposed Rules
without change to https://
www.regulations.gov, including any
personal and/or business confidential
information provided.
FOR FURTHER INFORMATION CONTACT: For
clarification of content, contact Mr. Jerry
Olson at (202) 501–3221. For
information pertaining to status or
publication schedules, contact the FAR
Secretariat at (202) 501–4755. Please
cite FAR case 2005–016.
SUPPLEMENTARY INFORMATION:
A. Background
The proposed changes to FAR
32.1000, 32.1003, 32.1004, 32.1005, and
32.1007 and the clause at 52.232–32 are
intended to increase the use of
performance-based payments as the
method of contract financing on Federal
Government contracts, and improve the
efficiency of performance-based
payments when used on these contracts.
These proposed changes originated from
recommendations submitted by the
Department of Defense Performancebased Payments Working Group in their
March 8, 2005 report. 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.
jlentini on PROD1PC65 with PROPOSAL
B. Discussion
The Councils are proposing to revise
the following FAR provisions:
1. The current FAR 32.1001(e) is
renumbered to (d) and rephrased to
require payments to be made in
accordance with each agency’s policy.
2. FAR 32.1001(e) is moved from
32.1000 to clarify when use of PBPs is
appropriate.
3. FAR 32.1003 is revised to
specifically address when PBP’s may be
used. This revised language clarifies use
of PBPs on fixed-priced line items and
orders and on Indefinite DeliveryIndefinite Quantity and non-Indefinite
Delivery contracts.
4. FAR 32.1004(a)(1), to clarify that
events not requiring meaningful effort or
action must not be included as events or
criteria for PBPs. FAR 32.1004(a)(2)(iii),
to specifically state that all cumulative
events be identified. FAR
32.1004(b)(2)(ii) requires that the
contracting officer must document the
rationale for establishing a performancebased payment rate that is below the
applicable progress payment rate. FAR
32.1004(c) is added (and the existing (c)
renumbered) to clarify that the
contracting officer shall not limit the
amount of a PBP payment to a
percentage of actual incurred cost for
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17:28 Dec 13, 2006
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the scheduled event or performance
criteria. FAR 32.1004(e)(1)(ii) is
renumbered to 32.1004(f)(1)(ii) and
revised to clarify that solicitations
related to competitive source selections
should state that the evaluation of the
proposed prices will include an
adjustment to reflect the estimated cost
to the Government of providing each
offeror’s proposed PBP terms.
5. FAR 32.1007(a) is revised to clarify
that the contracting officer responsible
for administering the performance-based
payments should also be responsible for
reviewing, approving, and transmitting
the payment requests to the payment
office. FAR 32.1007(c) is revised to
prohibit actual cost verification unless
the purpose is to assist in establishing
revised or new PBP milestones or
values.
C. Regulatory Flexibility Act
The Councils do not expect this
proposed rule 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 this
rule should reduce administrative costs
for contractor and the Government, thus
further encouraging the use of
performance based payments. An Initial
Regulatory Flexibility Analysis has,
therefore, not been performed. We invite
comments from small businesses and
other interested parties. The Councils
will consider comments from small
entities concerning the affected FAR
Parts 32 and 52 in accordance with 5
U.S.C. 610. Interested parties must
submit such comments separately and
should cite 5 U.S.C. 601, et seq. (FAR
case 2005–016), in correspondence.
D. Paperwork Reduction Act
The Paperwork Reduction Act does
not apply because the proposed 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 32 and
52
Government procurement.
Dated: December 7, 2006.
Ralph De Stefano
Director, Contract Policy Division.
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 137; and 42 U.S.C. 2473(c).
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PART 32—CONTRACT FINANCING
32.110
[Amended]
2. Amend section 32.110 by removing
from paragraph (d) ‘‘32.1004(d)’’ and
adding ‘‘32.1004(e)’’ in its place.
3. Revise section 32.1000 to read as
follows:
32.1000
Scope of subpart.
This subpart provides policy and
procedures for performance-based
payments under noncommercial
purchases pursuant to Subpart 32.1.
4. Amend section 32.1001 by—
a. Removing from paragraph (c)
‘‘32.1003(c)’’ and adding ‘‘32.1003(d))’’
in its place;
b. Removing paragraph (d);
redesignating paragraph (e) as (d); and
adding a new paragraph (e); and
c. Revising newly designated
paragraph (d).
The revised and added text reads as
follows:
32.1001
Policy.
*
*
*
*
*
(d) Performance-based payments are
contract financing payments and,
therefore, are not subject to the interestpenalty provisions of prompt payment
(see Subpart 32.9). These payments
shall be made in accordance with
agency policy.
(e) Performance-based payments shall
not be used for—
(1) Payments under costreimbursement line items;
(2) Contracts for architect-engineer
services or construction, or for
shipbuilding or ship conversion,
alteration, or repair, when the contracts
provide for progress payments based
upon a percentage or stage of
completion; or
(3) Contracts awarded through sealed
bid procedures.
32.1002
[Amended]
5. Amend section 32.1002 by—
a. Removing from the end of
paragraph (a) the semi-colon and adding
a period in its place; and
b. Removing from the end of
paragraph (b) ‘‘; or’’ and adding a period
in its place.
6. Revise section 32.1003 to read as
follows:
32.1003
Therefore, DoD, GSA, and NASA
propose amending 48 CFR parts 32 and
52 as set forth below:
1. The authority citation for 48 CFR
parts 32 and 52 continues to read as
follows:
75187
Criteria for use.
The contracting officer may use
performance-based payments for
individual orders and contracts
provided—
(a) The contracting officer and offeror
agree on the performance-based
payment terms;
(b) The contract, individual order, or
line item is a fixed-price type;
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Federal Register / Vol. 71, No. 240 / Thursday, December 14, 2006 / Proposed Rules
(c) For indefinite delivery contracts,
the individual order does not provide
for progress payments; and
(d) For other than an indefinite
delivery contract, the contract does not
provide for progress payments.
7. Amend section 32.1004 by—
a. Revising the 3rd sentence of
paragraph (a)(1);
b. Revising paragraph (a)(2)(iii);
c. Revising the introductory text of
paragraph (b)(2);
d. Adding a new sentence to the end
of paragraph (b)(2)(ii);
e. Redesignating paragraphs (c), (d),
and (e) as (d), (e), and (f) respectively,
and adding a new paragraph (c);
f. Revising the 2nd sentence of the
newly redesignated paragraph (f)(1)(ii);
and
g. Removing from the newly
redesignated paragraph (f)(2)(ii)
‘‘(e)(1)(ii)’’ and adding ‘‘(f)(1)(ii)’’ in its
place.
The revised and added text reads as
follows:
32.1004
Procedures.
jlentini on PROD1PC65 with PROPOSAL
*
*
*
*
*
(a) * * * (1) * * * The signing of
contracts or modifications, the exercise
of options, the passage of time, or other
such occurrences do not represent
meaningful efforts or actions and shall
not be identified as events or criteria for
performance-based payments. * * *
*
*
*
*
*
(2) * * *
(iii) The contract must specifically
identify cumulative events or criteria
and identify which events or criteria are
preconditions for the successful
achievement of each cumulative event
or criterion.
*
*
*
*
*
(b) * * *
(2) Total performance-based payments
shall—
*
*
*
*
*
(ii) * * * Unless otherwise provided
in agency procedures, the contracting
officer shall document the rationale for
establishing the performance-based
payment rate if the performance-based
payment rate is less than the
contractor’s applicable progress
payment rate.
*
*
*
*
*
(c) Payment Amount. The contracting
officer shall not limit the amount of a
performance-based payment to a
percentage of actual incurred cost for
the scheduled event or performance
criteria.
*
*
*
*
*
(f) * * *
(1) * * *
(ii) * * * Unless agencies prescribe
other evaluation procedures, if the
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17:28 Dec 13, 2006
Jkt 211001
contracting officer anticipates that the
cost of providing performance-based
payments would have a significant
impact on determining the best value
offer, the solicitation should state that
the evaluation of the offeror’s proposed
prices will include an adjustment to
reflect the estimated cost to the
Government of providing each offeror’s
proposed performance-based payments
(see Alternate I to the provision at
52.232–28).
*
*
*
*
*
8. Amend section 32.1005 by—
a. Revising the introductory text of
paragraph (a); and
b. Removing from paragraph (b)(2)
‘‘32.1004(e)’’ and adding ‘‘32.1004(f)’’ in
its place.
The revised text reads as follows:
32.1005 Solicitation provision and
contract clause.
(a) Insert the clause at 52.232–32,
Performance-Based Payments, in—
*
*
*
*
*
9. Amend section 32.1007 by—
a. Revising paragraph (a);
b. Removing from paragraph (b)(2)
‘‘32.1004(c)’’ and adding ‘‘32.1004(d)’’
in its place; and
c. Adding to the end of paragraph (c)
a new sentence.
The revised and added text reads as
follows:
32.1007 Administration and payment of
performance-based payments.
(a) Responsibility. The contracting
officer responsible for administering
performance-based payments (see
42.302(a)(12)) for the contract shall
review and approve all performancebased payments for that contract.
*
*
*
*
*
(c) * * * Reviews shall not include
verification of actual cost unless the
purpose is to assist in establishing
revised or new performance-based
payment milestones or values.
*
*
*
*
*
PART 52—SOLICITATION PROVISIONS
AND CONTRACT CLAUSES
10. Amend section 52.232–32 by
revising the date of the clause and the
second sentence of paragraph (c)(2) to
read as follows:
52.232–32
Performance-Based Payments.
*
*
*
*
*
PERFORMANCE-BASED PAYMENTS
(DATE)
*
*
*
*
*
(c) * * *
(2) * * * The designated payment office
will pay approved requests on the
lllllllll [Contracting Officer
insert day as prescribed by agency head; if
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not prescribed, insert ‘‘30th’’] day after
receipt of the request for performance-based
payment by the designated payment office. *
**
*
*
*
*
*
(End of clause)
[FR Doc. 06–9678 Filed 12–13–06; 8:45 am]
BILLING CODE 6820–EP–S
DEPARTMENT OF THE INTERIOR
Fish and Wildlife Service
50 CFR Part 10
RIN 1018–AB72
General Provisions; Revised List of
Migratory Birds
Fish and Wildlife Service,
Interior.
ACTION: Proposed rule; reopening of
comment period.
AGENCY:
SUMMARY: We, the Fish and Wildlife
Service, are reopening the comment
period for our proposed rule to revise
the list of migratory birds protected by
the Migratory Bird Treaty Act (MBTA)
to allow interested persons additional
time to prepare and submit comments.
DATES: We will consider all comments
that we receive on or before December
29, 2006.
ADDRESSES: Submit your comments on
this proposal in one of the following
ways:
1. By postal mail to Chief, Division of
Migratory Bird Management, U.S. Fish
and Wildlife Service, 4401 North Fairfax
Drive, Mail Stop 4107, Arlington, VA
22203;
2. By hand-delivery to U.S. Fish and
Wildlife Service, Division of Migratory
Bird Management, 4501 North Fairfax
Drive, Room 4000, Arlington, VA 22203.
By prior arrangement, materials
available for public inspection can also
be examined at this location;
3. By fax to (703) 358–2272; or
4. By e-mail to mbtabirdlist@fws.gov;
or
5. By the Federal eRulemaking Portal
at https://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: John
L. Trapp, (703) 358–1714.
SUPPLEMENTARY INFORMATION: On August
24, 2006, we published in the Federal
Register (71 FR 50194–50221) a
proposed rule to revise the List of
Migratory Birds by adding numerous
species and removing numerous
species. The proposed rule is available
for online viewing or downloading at
https://www.fws.gov/migratorybirds/.
Our reasons for proposing changes to
the list include correcting previous
E:\FR\FM\14DEP1.SGM
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]]>Agencies
[Federal Register Volume 71, Number 240 (Thursday, December 14, 2006)]
[Proposed Rules]
[Pages 75186-75188]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-9678]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 32 and 52
[FAR Case 2005-016; Docket 2006-0020; Sequence 14]
RIN 9000-AK64
Federal Acquisition Regulation; FAR Case 2005-016, Performance-
based Payments
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) are proposing to amend the
Federal Acquisition Regulation (FAR) to implement recommendations to
change the regulations related to performance-based payments (PBP).
DATES: Interested parties should submit written comments to the FAR
Secretariat on or before February 12, 2007 to be considered in the
formulation of a final rule.
ADDRESSES: Submit comments identified by FAR case 2005-016 by any of
the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Search for any document by first selecting the proper document types
and selecting ``Federal Acquisition Regulation'' as the agency of
choice. At the ``Keyword'' prompt, type in the FAR case number (for
example, FAR Case 2006-001) and click on the ``Submit'' button. Please
include any personal and/or business information inside the
document.You may also search for any document by clicking on the
``Advanced search/document search'' tab at the top of the screen,
selecting from the agency field ``Federal Acquisition Regulation'', and
typing the FAR case number in the keyword field. Select the ``Submit''
button.
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 FAR case 2005-
016 in all correspondence related to this case. All comments received
will be posted
[[Page 75187]]
without change to https://www.regulations.gov, including any personal
and/or business confidential information provided.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
Mr. Jerry Olson at (202) 501-3221. For information pertaining to status
or publication schedules, contact the FAR Secretariat at (202) 501-
4755. Please cite FAR case 2005-016.
SUPPLEMENTARY INFORMATION:
A. Background
The proposed changes to FAR 32.1000, 32.1003, 32.1004, 32.1005, and
32.1007 and the clause at 52.232-32 are intended to increase the use of
performance-based payments as the method of contract financing on
Federal Government contracts, and improve the efficiency of
performance-based payments when used on these contracts. These proposed
changes originated from recommendations submitted by the Department of
Defense Performance-based Payments Working Group in their March 8, 2005
report. This is not a significant regulatory action and, therefore, was
not subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
B. Discussion
The Councils are proposing to revise the following FAR provisions:
1. The current FAR 32.1001(e) is renumbered to (d) and rephrased to
require payments to be made in accordance with each agency's policy.
2. FAR 32.1001(e) is moved from 32.1000 to clarify when use of PBPs
is appropriate.
3. FAR 32.1003 is revised to specifically address when PBP's may be
used. This revised language clarifies use of PBPs on fixed-priced line
items and orders and on Indefinite Delivery-Indefinite Quantity and
non-Indefinite Delivery contracts.
4. FAR 32.1004(a)(1), to clarify that events not requiring
meaningful effort or action must not be included as events or criteria
for PBPs. FAR 32.1004(a)(2)(iii), to specifically state that all
cumulative events be identified. FAR 32.1004(b)(2)(ii) requires that
the contracting officer must document the rationale for establishing a
performance-based payment rate that is below the applicable progress
payment rate. FAR 32.1004(c) is added (and the existing (c) renumbered)
to clarify that the contracting officer shall not limit the amount of a
PBP payment to a percentage of actual incurred cost for the scheduled
event or performance criteria. FAR 32.1004(e)(1)(ii) is renumbered to
32.1004(f)(1)(ii) and revised to clarify that solicitations related to
competitive source selections should state that the evaluation of the
proposed prices will include an adjustment to reflect the estimated
cost to the Government of providing each offeror's proposed PBP terms.
5. FAR 32.1007(a) is revised to clarify that the contracting
officer responsible for administering the performance-based payments
should also be responsible for reviewing, approving, and transmitting
the payment requests to the payment office. FAR 32.1007(c) is revised
to prohibit actual cost verification unless the purpose is to assist in
establishing revised or new PBP milestones or values.
C. Regulatory Flexibility Act
The Councils do not expect this proposed rule 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 this rule should reduce administrative costs for contractor and
the Government, thus further encouraging the use of performance based
payments. An Initial Regulatory Flexibility Analysis has, therefore,
not been performed. We invite comments from small businesses and other
interested parties. The Councils will consider comments from small
entities concerning the affected FAR Parts 32 and 52 in accordance with
5 U.S.C. 610. Interested parties must submit such comments separately
and should cite 5 U.S.C. 601, et seq. (FAR case 2005-016), in
correspondence.
D. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the proposed
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 32 and 52
Government procurement.
Dated: December 7, 2006.
Ralph De Stefano
Director, Contract Policy Division.
Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 32 and
52 as set forth below:
1. The authority citation for 48 CFR parts 32 and 52 continues to
read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 32--CONTRACT FINANCING
32.110 [Amended]
2. Amend section 32.110 by removing from paragraph (d)
``32.1004(d)'' and adding ``32.1004(e)'' in its place.
3. Revise section 32.1000 to read as follows:
32.1000 Scope of subpart.
This subpart provides policy and procedures for performance-based
payments under noncommercial purchases pursuant to Subpart 32.1.
4. Amend section 32.1001 by--
a. Removing from paragraph (c) ``32.1003(c)'' and adding
``32.1003(d))'' in its place;
b. Removing paragraph (d); redesignating paragraph (e) as (d); and
adding a new paragraph (e); and
c. Revising newly designated paragraph (d).
The revised and added text reads as follows:
32.1001 Policy.
* * * * *
(d) Performance-based payments are contract financing payments and,
therefore, are not subject to the interest-penalty provisions of prompt
payment (see Subpart 32.9). These payments shall be made in accordance
with agency policy.
(e) Performance-based payments shall not be used for--
(1) Payments under cost-reimbursement line items;
(2) Contracts for architect-engineer services or construction, or
for shipbuilding or ship conversion, alteration, or repair, when the
contracts provide for progress payments based upon a percentage or
stage of completion; or
(3) Contracts awarded through sealed bid procedures.
32.1002 [Amended]
5. Amend section 32.1002 by--
a. Removing from the end of paragraph (a) the semi-colon and adding
a period in its place; and
b. Removing from the end of paragraph (b) ``; or'' and adding a
period in its place.
6. Revise section 32.1003 to read as follows:
32.1003 Criteria for use.
The contracting officer may use performance-based payments for
individual orders and contracts provided--
(a) The contracting officer and offeror agree on the performance-
based payment terms;
(b) The contract, individual order, or line item is a fixed-price
type;
[[Page 75188]]
(c) For indefinite delivery contracts, the individual order does
not provide for progress payments; and
(d) For other than an indefinite delivery contract, the contract
does not provide for progress payments.
7. Amend section 32.1004 by--
a. Revising the 3rd sentence of paragraph (a)(1);
b. Revising paragraph (a)(2)(iii);
c. Revising the introductory text of paragraph (b)(2);
d. Adding a new sentence to the end of paragraph (b)(2)(ii);
e. Redesignating paragraphs (c), (d), and (e) as (d), (e), and (f)
respectively, and adding a new paragraph (c);
f. Revising the 2nd sentence of the newly redesignated paragraph
(f)(1)(ii); and
g. Removing from the newly redesignated paragraph (f)(2)(ii)
``(e)(1)(ii)'' and adding ``(f)(1)(ii)'' in its place.
The revised and added text reads as follows:
32.1004 Procedures.
* * * * *
(a) * * * (1) * * * The signing of contracts or modifications, the
exercise of options, the passage of time, or other such occurrences do
not represent meaningful efforts or actions and shall not be identified
as events or criteria for performance-based payments. * * *
* * * * *
(2) * * *
(iii) The contract must specifically identify cumulative events or
criteria and identify which events or criteria are preconditions for
the successful achievement of each cumulative event or criterion.
* * * * *
(b) * * *
(2) Total performance-based payments shall--
* * * * *
(ii) * * * Unless otherwise provided in agency procedures, the
contracting officer shall document the rationale for establishing the
performance-based payment rate if the performance-based payment rate is
less than the contractor's applicable progress payment rate.
* * * * *
(c) Payment Amount. The contracting officer shall not limit the
amount of a performance-based payment to a percentage of actual
incurred cost for the scheduled event or performance criteria.
* * * * *
(f) * * *
(1) * * *
(ii) * * * Unless agencies prescribe other evaluation procedures,
if the contracting officer anticipates that the cost of providing
performance-based payments would have a significant impact on
determining the best value offer, the solicitation should state that
the evaluation of the offeror's proposed prices will include an
adjustment to reflect the estimated cost to the Government of providing
each offeror's proposed performance-based payments (see Alternate I to
the provision at 52.232-28).
* * * * *
8. Amend section 32.1005 by--
a. Revising the introductory text of paragraph (a); and
b. Removing from paragraph (b)(2) ``32.1004(e)'' and adding
``32.1004(f)'' in its place.
The revised text reads as follows:
32.1005 Solicitation provision and contract clause.
(a) Insert the clause at 52.232-32, Performance-Based Payments,
in--
* * * * *
9. Amend section 32.1007 by--
a. Revising paragraph (a);
b. Removing from paragraph (b)(2) ``32.1004(c)'' and adding
``32.1004(d)'' in its place; and
c. Adding to the end of paragraph (c) a new sentence.
The revised and added text reads as follows:
32.1007 Administration and payment of performance-based payments.
(a) Responsibility. The contracting officer responsible for
administering performance-based payments (see 42.302(a)(12)) for the
contract shall review and approve all performance-based payments for
that contract.
* * * * *
(c) * * * Reviews shall not include verification of actual cost
unless the purpose is to assist in establishing revised or new
performance-based payment milestones or values.
* * * * *
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
10. Amend section 52.232-32 by revising the date of the clause and
the second sentence of paragraph (c)(2) to read as follows:
52.232-32 Performance-Based Payments.
* * * * *
PERFORMANCE-BASED PAYMENTS (DATE)
* * * * *
(c) * * *
(2) * * * The designated payment office will pay approved
requests on the ------------------ [Contracting Officer insert day
as prescribed by agency head; if not prescribed, insert ``30th'']
day after receipt of the request for performance-based payment by
the designated payment office. * * *
* * * * *
(End of clause)
[FR Doc. 06-9678 Filed 12-13-06; 8:45 am]
BILLING CODE 6820-EP-S
