Cost Accounting Standards Board (CAS) Changes to Acquisition Thresholds, 32809-32813 [E7-11328]
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Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Rules and Regulations
PART 602—OMB CONTROL NUMBERS
UNDER THE PAPERWORK
REDUCTION ACT
Par. 47. The authority citation for part
602 continues to read as follows:
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Authority: 26 U.S.C. 7805.
§ 602.101
[Amended]
Par. 48.
1. In § 602.101(b), the following
entries to the table are removed:
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I
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SUMMARY: The Office of Federal
Procurement Policy, Cost Accounting
Standards (CAS) Board, is revising the
threshold for the application of CAS to
negotiated Government contracts. This
rulemaking is authorized pursuant to
Section 26 of the Office of Federal
Procurement Policy Act. The Board is
taking final action on this topic in order
to adjust the CAS applicability
threshold in accordance with Section
822 of the 2006 National Defense
Authorization Act (Pub. L. 109–163).
Section 822 amended 41 U.S.C.
422(f)(2)(A) to require that the threshold
for CAS applicability be the same as the
threshold for compliance with the Truth
in Negotiations Act (TINA).
DATES: This final rule is effective June
14, 2007.
FOR FURTHER INFORMATION CONTACT:
Laura Auletta, Manager, Cost
Accounting Standards Board, 725 17th
Street, NW., Room 9013, Washington,
DC 20503 (telephone: 202–395–3256).
SUPPLEMENTARY INFORMATION:
A. Background
On December 15, 2005, the CAS
Board issued a proposed rule with
request for comment (70 FR 73423) for
the purpose of implementing Sec. 807 of
I 2. The following entries are added in
the Ronald W. Reagan National Defense
numerical order to the table:
Authorization Act for Fiscal Year 2005,
Pub. L. 108–375, ‘‘Inflation Adjustment
1.332–6 .................................
1545–2019 of Acquisition-Related Dollar
1.351–3 .................................
1545–2019 Thresholds.’’ Section 807 of Pub. L.
1.355–5 .................................
1545–2019 108–375 requires the periodic
1.368–3 .................................
1545–2019 adjustment of acquisition-related
1.382–11 ...............................
1545–2019
thresholds contained in statutes that
1.1081–11 .............................
1545–2019
were in effect on October 1, 2000, with
certain exceptions. The Federal
Kevin M. Brown,
Acquisition Regulation (FAR) Council is
Deputy Commissioner for Services and
authorized to adjust these thresholds
Enforcement.
based on increases in the Consumer
Approved: June 4, 2007.
Price Index for all-urban consumers
Eric Solomon,
(CPI) and as prescribed in the Public
Assistant Secretary of the Treasury.
Law.
Based on further review, the Board
[FR Doc. E7–11148 Filed 6–13–07; 8:45 am]
has determined that its thresholds are
BILLING CODE 4830–01–P
not subject to the provisions of Section
807 of the Pub. L 108–375 because these
thresholds are not ‘‘acquisition related,’’
OFFICE OF MANAGEMENT AND
as defined by Section 807. Therefore,
BUDGET
this final rule does not adjust the CAS
thresholds to reflect the provisions of
Office of Federal Procurement Policy
Section 807.
However, subsequent to the issuance
48 CFR Parts 9901 and 9903
of the CAS Board’s proposed rule,
Section 822 of the 2006 National
Cost Accounting Standards Board
Defense Authorization Act (Pub. L. 109–
(CAS) Changes to Acquisition
163) amended 41 U.S.C. 422(f)(2)(A) to
Thresholds
require that the threshold for CAS
applicability be the same as the
AGENCY: Cost Accounting Standards
threshold for compliance with the Truth
Board, Office of Federal Procurement
in Negotiations Act (TINA). The TINA
Policy, OMB.
threshold is currently $650,000 (71 FR
ACTION: Final rule.
57363). Accordingly, the Board is
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32809
increasing the CAS applicability
threshold to $650,000 to comply with
Public Law 109–163.
B. Public Comments
The Board received three sets of
public comments in response to the
proposed rule.
1. PL 108–375 Does Not Require
Threshold Adjustments
Comment: Two commenters opined
that Section 807 of Public Law 108–375
does not apply to statutory thresholds in
the Board’s rules, regulations and
standards. These commenters asserted
that the law applies only to acquisitionrelated statutory dollar thresholds
contained in the FAR. Thus, the Board
is not required to adjust its statutory
thresholds in response to Pub. L. 108–
375.
Response: After further review of this
issue, the Board agrees that Section 807
does not apply to the CAS thresholds.
Section 807 of Public Law 108–375
requires the Federal Acquisition
Regulatory Council to adjust each
‘‘acquisition-related dollar threshold.’’
Section 807 defines an acquisitionrelated dollar threshold as ‘‘a dollar
threshold that is specified in law as a
factor in defining the scope of the
applicability of a policy, procedure,
requirement, or restriction provided in
that law to the procurement of property
or services by an executive agency, as
determined by the Federal Acquisition
Regulatory Council.’’ The scope and
applicability of the CAS is within the
sole purview of the CAS Board. The
Federal Acquisition Regulatory Council
does not determine the scope or
applicability of the Cost Accounting
Standards. Therefore, for purposes of
applying Section 807, the thresholds in
the CAS do not meet the definition of
an ‘‘acquisition threshold.’’ Thus, the
requirements of Public Law 108–375 do
not apply to the CAS thresholds.
However, the Board is issuing a final
rule to adjust the CAS applicability
threshold required by Public Law 109–
163.
2. Consistency Between CAS
Applicability and TINA Thresholds
Comment: One commenter
recommended that the CAS
applicability threshold be modified to
adopt the Truth in Negotiations Act
(TINA) threshold for requiring cost or
pricing data (FAR 15.403–4) since it will
be very difficult to administer the
impact of CAS issues associated with
such contracts.
Response: As previously noted,
shortly after the publication of the
proposed rule, 41 U.S.C. 422(f)(2)(A)
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was amended to require that the CAS
applicability threshold be equal to the
TINA threshold. Accordingly, this final
rule adjusts the CAS applicability
threshold to $650,000, which is the
current TINA threshold.
3. Advisability of Adjusting CAS
Thresholds
Comment: One commenter asserted
that the proposed threshold adjustments
represent bad public policy and that
previous increases in these thresholds
have been ‘‘simply astounding, and far
in excess of any inflationary increases,
no matter how measured.’’
Response: Consistent with the intent
of the proposed rule, the final rule
includes only those adjustments of the
CAS applicability threshold that are
statutorily required. As such, the Board
does not believe the commenter’s
assertion regarding the adjustments in
the final rule has any merit.
4. Failure To Track CAS Thresholds to
Inflation Expands CAS Applicability
Beyond Its Original Intent
Comment: One commenter
recommended that the Board
independently review its thresholds to
determine whether ‘‘economic factors
have caused more contractors to have
become subject to CAS coverage’’ and
‘‘consider if there are now contractors
covered in 2006 that the Board did not
intend to cover in 1992.’’
Response: The purpose of the
proposed and final rules was to adjust
the CAS thresholds to reflect statutory
requirements. As such, the Board is
confining the adjustment of CAS
thresholds in this final rule to those
adjustments required by statute. The
Board will consider the commenter’s
recommendation to review the other
CAS thresholds when formulating its
agenda for future actions.
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C. Paperwork Reduction Act
The Paperwork Reduction Act, Public
Law 96–511, does not apply to this
rulemaking, because this rule imposes
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.
D. Executive Order 12866 and the
Regulatory Flexibility Act
The Board certifies that this rule will
not have a significant effect on a
substantial number of small entities
within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq.,
because small businesses are exempt
from the application of the Cost
Accounting Standards.
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List of Subjects in 48 CFR Part 9903
Accounting, Government
procurement.
Paul A. Denett,
Administrator, Office of Federal Procurement
Policy.
For the reasons set forth in this
preamble, Chapter 99 of Title 48 of the
Code of Federal Regulations is amended
as set forth below:
I
PART 9901—RULES AND
PROCEDURES
1. The authority citation for part 9901
continues to read as follows:
I
Authority: Pub. L. 100–679, 102 Stat. 4056,
41 U.S.C. 422.
2. Revise section 9901.306 to read as
follows:
I
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 $650,000, 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:
I
Authority: Pub. L. 100–679, 102 Stat. 4056,
41 U.S.C. 422.
Subpart 9903.2—CAS Program
Requirements
4. Section 9903.201–1 is amended by
revising paragraph (b)(2) to read as
follows:
I
9903.201–1
CAS applicability.
*
*
*
*
*
(b) * * *
(2) Negotiated contracts and
subcontracts not in excess of $650,000.
For purposes of this paragraph (b)(2) an
order issued by one segment to another
segment shall be treated as a
subcontract.
*
*
*
*
*
I 5. Section 9903.201–2 is amended by
revising paragraphs (c)(3) and (c)(5) to
read as follows:
9903.201–2
Types of CAS coverage.
(c) * * *
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(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
$650,000, 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 $650,000. 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.
*
*
*
*
*
I 6. Section 9903.201–3 is amended by
revising the provision heading and by
revising paragraph (a) in Part I of the
provision to read as follows:
9903.201–3
*
*
Solicitation provisions.
*
*
*
Cost Accounting Standards Notices and
Certification (June 2007)
*
*
*
*
*
I. Disclosure Statement—Cost Accounting
Practices and Certification
(a) Any contract in excess of $650,000
resulting from this solicitation, except for
those contracts which are exempt as
specified in 9903.201–1.
*
*
*
*
*
7. Section 9903.201–4 is revised to
read as follows:
I
9903.201–4
Contract clauses.
(a) Cost Accounting Standards. (1)
The contracting officer shall insert the
clause set forth below, Cost Accounting
Standards, in negotiated contracts,
unless the contract is exempted (see
9903.201–1), the contract is subject to
modified coverage (see 9903.201–2), or
the clause prescribed in paragraph (e) of
this section is used.
(2) The clause below requires the
contractor to comply with all CAS
specified in part 9904, to disclose actual
cost accounting practices (applicable to
CAS-covered contracts only), and to
follow disclosed and established cost
accounting practices consistently.
Cost Accounting Standards (June 2007)
(a) Unless the contract is exempt under
9903.201–1 and 9903.201–2, the provisions
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of 9903 are incorporated herein by reference
and the Contractor in connection with this
contract, shall—
(1) (CAS-covered Contracts Only) By
submission of a Disclosure Statement,
disclosed in writing the Contractor’s cost
accounting practices as required by
9903.202–1 through 9903.202–5 including
methods of distinguishing direct costs from
indirect costs and the basis used for
allocating indirect costs. The practices
disclosed for this contract shall be the same
as the practices currently disclosed and
applied on all other contracts and
subcontracts being performed by the
Contractor and which contain a Cost
Accounting Standards (CAS) clause. If the
Contractor has notified the Contracting
Officer that the Disclosure Statement
contains trade secrets, and commercial or
financial information which is privileged and
confidential, the Disclosure Statement shall
be protected and shall not be released outside
of the Government.
(2) Follow consistently the Contractor’s
cost accounting practices in accumulating
and reporting contract performance cost data
concerning this contract. If any change in
cost accounting practices is made for the
purposes of any contract or subcontract
subject to CAS requirements, the change
must be applied prospectively to this
contract and the Disclosure Statement must
be amended accordingly. If the contract price
or cost allowance of this contract is affected
by such changes, adjustment shall be made
in accordance with subparagraph (a)(4) or
(a)(5) of this clause, as appropriate.
(3) Comply with all CAS, including any
modifications and interpretations indicated
thereto contained in part 9904, in effect on
the date of award of this contract or, if the
Contractor has submitted cost or pricing data,
on the date of final agreement on price as
shown on the Contractor’s signed certificate
of current cost or pricing data. The
Contractor shall also comply with any CAS
(or modifications to CAS) which hereafter
become applicable to a contract or
subcontract of the Contractor. Such
compliance shall be required prospectively
from the date of applicability of such contract
or subcontract.
(4)(i) Agree to an equitable adjustment as
provided in the Changes clause of this
contract if the contract cost is affected by a
change which, pursuant to subparagraph
(a)(3) of this clause, the Contractor is
required to make to the Contractor’s
established cost accounting practices.
(ii) Negotiate with the Contracting Officer
to determine the terms and conditions under
which a change may be made to a cost
accounting practice, other than a change
made under other provisions of subparagraph
(a)(4) of this clause; provided that no
agreement may be made under this provision
that will increase costs paid by the United
States.
(iii) When the parties agree to a change to
a cost accounting practice, other than a
change under subdivision (a)(4)(i) of this
clause, negotiate an equitable adjustment as
provided in the Changes clause of this
contract.
(5) Agree to an adjustment of the contract
price or cost allowance, as appropriate, if the
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Contractor or a subcontractor fails to comply
with an applicable Cost Accounting
Standard, or to follow any cost accounting
practice consistently and such failure results
in any increased costs paid by the United
States. Such adjustment shall provide for
recovery of the increased costs to the United
States, together with interest thereon
computed at the annual rate established
under section 6621(a)(2) of the Internal
Revenue Code of 1986 (26 U.S.C. 6621(a)(2))
for such period, from the time the payment
by the United States was made to the time
the adjustment is effected. In no case shall
the Government recover costs greater than
the increased cost to the Government, in the
aggregate, on the relevant contracts subject to
the price adjustment, unless the Contractor
made a change in its cost accounting
practices of which it was aware or should
have been aware at the time of price
negotiations and which it failed to disclose
to the Government.
(b) If the parties fail to agree whether the
Contractor or a subcontractor has complied
with an applicable CAS in part 9904 or a
CAS rule or regulation in part 9903 and as
to any cost adjustment demanded by the
United States, such failure to agree will
constitute a dispute under the Contract
Disputes Act (41 U.S.C. 601).
(c) The Contractor shall permit any
authorized representatives of the Government
to examine and make copies of any
documents, papers, or records relating to
compliance with the requirements of this
clause.
(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 $650,000, 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)
(b) [Reserved]
(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 $650,000
but less than $50 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).
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(2) The clause below requires the
Contractor to comply with CAS
9904.401, 9904.402, 9904.405, and
9904.406, to disclose (if it meets certain
requirements) actual cost accounting
practices, and to follow consistently
disclosed and established cost
accounting practices.
Disclosure and Consistency of Cost
Accounting Practices (June 2007)
(a) The Contractor, in connection with this
contract, shall—
(1) Comply with the requirements of
9904.401, Consistency in Estimating,
Accumulating, and Reporting Costs;
9904.402, Consistency in Allocating Costs
Incurred for the Same Purpose; 9904.405,
Accounting for Unallowable Costs; and
9904.406, Cost Accounting Standard—Cost
Accounting Period, in effect on the date of
award of this contract, as indicated in part
9904.
(2) (CAS-covered Contracts Only) If it is a
business unit of a company required to
submit a Disclosure Statement, disclose in
writing its cost accounting practices as
required by 9903.202–1 through 9903.202–5.
If the Contractor has notified the Contracting
Officer that the Disclosure Statement
contains trade secrets and commercial or
financial information which is privileged and
confidential, the Disclosure Statement shall
be protected and shall not be released outside
of the Government.
(3)(i) Follow consistently the Contractor’s
cost accounting practices. A change to such
practices may be proposed, however, by
either the Government or the Contractor, and
the Contractor agrees to negotiate with the
Contracting Officer the terms and conditions
under which a change may be made. After
the terms and conditions under which the
change is to be made have been agreed to, the
change must be applied prospectively to this
contract, and the Disclosure Statement, if
affected, must be amended accordingly.
(ii) The Contractor shall, when the parties
agree to a change to a cost accounting
practice and the Contracting Officer has
made the finding required in 9903.201–6(c)
that the change is desirable and not
detrimental to the interests of the
Government, negotiate an equitable
adjustment as provided in the Changes clause
of this contract. In the absence of the
required finding, no agreement may be made
under this contract clause that will increase
costs paid by the United States.
(4) Agree to an adjustment of the contract
price or cost allowance, as appropriate, if the
Contractor or a subcontractor fails to comply
with the applicable CAS or to follow any cost
accounting practice, and such failure results
in any increased costs paid by the United
States. Such adjustment shall provide for
recovery of the increased costs to the United
States, together with interest thereon
computed at the annual rate established
under section 6621(a)(2) of the Internal
Revenue Code of 1986 (26 U.S.C. 6621(a)(2))
for such period, from the time the payment
by the United States was made to the time
the adjustment is effected.
(b) If the parties fail to agree whether the
Contractor has complied with an applicable
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CAS rule, or regulation as specified in parts
9903 and 9904 and as to any cost adjustment
demanded by the United States, such failure
to agree will constitute a dispute under the
Contract Disputes Act (41 U.S.C. 601).
(c) The Contractor shall permit any
authorized representatives of the Government
to examine and make copies of any
documents, papers, and records relating to
compliance with the requirements of this
clause.
(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, except that—
(1) 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.
(2) This requirement shall apply only to
negotiated subcontracts in excess of
$650,000.
(3) The requirement shall not apply to
negotiated subcontracts otherwise exempt
from the requirement to include a CAS clause
as specified in 9903.201–1.
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(End of clause)
(d) [Reserved]
(e) Cost Accounting Standards—
Educational Institutions. (1) The
contracting officer shall insert the clause
set forth below, Cost Accounting
Standards—Educational Institutions, in
negotiated contracts awarded to
educational institutions, unless the
contract is exempted (see 9903.201–1),
the contract is to be performed by an
FFRDC (see 9903.201–2(c)(5)), or the
provision at 9903.201–2(c)(6) applies.
(2) The clause below requires the
educational institution to comply with
all CAS specified in part 9905, to
disclose actual cost accounting practices
as required by 9903.202–1(f), and to
follow disclosed and established cost
accounting practices consistently.
Cost Accounting Standards—Educational
Institutions (June 2007)
(a) Unless the contract is exempt under
9903.201–1 and 9903.201–2, the provisions
of part 9903 are incorporated herein by
reference and the Contractor in connection
with this contract, shall—
(1) (CAS-covered Contracts Only) If a
business unit of an educational institution
required to submit a Disclosure Statement,
disclose in writing the Contractor’s cost
accounting practices as required by
9903.202–1 through 9903.202–5 including
methods of distinguishing direct costs from
indirect costs and the basis used for
accumulating and allocating indirect costs.
The practices disclosed for this contract shall
be the same as the practices currently
disclosed and applied on all other contracts
and subcontracts being performed by the
Contractor and which contain a Cost
Accounting Standards (CAS) clause. If the
Contractor has notified the Contracting
Officer that the Disclosure Statement
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contains trade secrets, and commercial or
financial information which is privileged and
confidential, the Disclosure Statement shall
be protected and shall not be released outside
of the Government.
(2) Follow consistently the Contractor’s
cost accounting practices in accumulating
and reporting contract performance cost data
concerning this contract. If any change in
cost accounting practices is made for the
purposes of any contract or subcontract
subject to CAS requirements, the change
must be applied prospectively to this
contract and the Disclosure Statement, if
required, must be amended accordingly. If an
accounting principle change mandated under
Office of Management and Budget (OMB)
Circular A–21, Cost Principles for
Educational Institutions, requires that a
change in the Contractor’s cost accounting
practices be made after the date of this
contract award, the change must be applied
prospectively to this contract and the
Disclosure Statement, if required, must be
amended accordingly. If the contract price or
cost allowance of this contract is affected by
such changes, adjustment shall be made in
accordance with subparagraph (a)(4) or (a)(5)
of this clause, as appropriate.
(3) Comply with all CAS, including any
modifications and interpretations indicated
thereto contained in 48 CFR part 9905, in
effect on the date of award of this contract
or, if the Contractor has submitted cost or
pricing data, on the date of final agreement
on price as shown on the Contractor’s signed
certificate of current cost or pricing data. The
Contractor shall also comply with any CAS
(or modifications to CAS) which hereafter
become applicable to a contract or
subcontract of the Contractor. Such
compliance shall be required prospectively
from the date of applicability to such contract
or subcontract.
(4)(i) Agree to an equitable adjustment as
provided in the Changes clause of this
contract if the contract cost is affected by a
change which, pursuant to subparagraph
(a)(3) of this clause, the Contractor is
required to make to the Contractor’s
established cost accounting practices.
(ii) Negotiate with the Contracting Officer
to determine the terms and conditions under
which a change may be made to a cost
accounting practice, other than a change
made under other provisions of subparagraph
(a)(4) of this clause; provided that no
agreement may be made under this provision
that will increase costs paid by the United
States.
(iii) When the parties agree to a change to
a cost accounting practice, other than a
change under subdivision (a)(4)(i) or (a)(4)(iv)
of this clause, negotiate an equitable
adjustment as provided in the Changes clause
of this contract.
(iv) Agree to an equitable adjustment as
provided in the Changes clause of this
contract, if the contract cost is materially
affected by an OMB Circular A–21
accounting principle amendment which, on
becoming effective after the date of contract
award, requires the Contractor to make a
change to the Contractor’s established cost
accounting practices.
(5) Agree to an adjustment of the contract
price or cost allowance, as appropriate, if the
PO 00000
Frm 00040
Fmt 4700
Sfmt 4700
Contractor or a subcontractor fails to comply
with an applicable Cost Accounting
Standard, or to follow any cost accounting
practice consistently and such failure results
in any increased costs paid by the United
States. Such adjustment shall provide for
recovery of the increased costs to the United
States, together with interest thereon
computed at the annual rate established
under section 6621(a)(2) of the Internal
Revenue Code of 1986 (26 U.S.C. 6621(a)(2))
for such period, from the time the payment
by the United States was made to the time
the adjustment is effected. In no case shall
the Government recover costs greater than
the increased cost to the Government, in the
aggregate, on the relevant contracts subject to
the price adjustment, unless the Contractor
made a change in its cost accounting
practices of which it was aware or should
have been aware at the time of price
negotiations and which it failed to disclose
to the Government.
(b) If the parties fail to agree whether the
Contractor or a subcontractor has complied
with an applicable CAS or a CAS rule or
regulation in 9903 and as to any cost
adjustment demanded by the United States,
such failure to agree will constitute a dispute
under the Contract Disputes Act (41 U.S.C.
601).
(c) The Contractor shall permit any
authorized representatives of the Government
to examine and make copies of any
documents, papers, or records relating to
compliance with the requirements of this
clause.
(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) 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; and
(2) This requirement shall apply only to
negotiated subcontracts in excess of
$650,000.
(3) 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)
8. Section 9903.202–1 is amended by
revising:
I A. Paragraph (c);
I B. Paragraph (f)(2)(i); and
I C. Paragraphs (f)(3)(i), (ii), and (iii)
The revisions read as follows:
I
9903.202–1
*
General requirements.
*
*
*
*
(c) When a Disclosure Statement is
required, a separate Disclosure
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14JNR1
Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Rules and Regulations
Statement must be submitted for each
segment whose costs included in the
total price of any CAS-covered contract
or subcontract exceed $650,000, unless
* * *
(f) * * *
(2) * * *
(i) Any business unit of an
educational institution that is selected
to receive a CAS-covered contract or
subcontract in excess of $650,000 and is
part of a college or university location
listed in Exhibit A of Office of
Management and Budget (OMB)
Circular A–21 shall submit a Disclosure
Statement before award.* * *
(3) * * *
(i) For business units that are selected
to receive a CAS-covered contract or
subcontract in excess of $650,000 and
are part of the first 20 college or
university locations (i.e., numbers 1
through 20) listed in Exhibit A of OMB
Circular A–21, Disclosure Statements
shall be submitted within six months
after the date of contract award.
(ii) For business units that are
selected to receive a CAS-covered
contract or subcontract in excess of
$650,000 and are part of a college or
university location that is listed as one
of the institutions numbered 21 through
50, in Exhibit A of OMB Circular A–21,
Disclosure Statements shall be
submitted during the six month period
ending twelve months after the date of
contract award.
(iii) For business units that are
selected to receive a CAS-covered
contract or subcontract in excess of
$650,000 and are part of a college or
university location that is listed as one
of the institutions numbered 51 through
99, in Exhibit A of OMB Circular A–21,
Disclosure Statements shall be
submitted during the six month period
ending eighteen months after the date of
contract award.
[FR Doc. E7–11328 Filed 6–13–07; 8:45 am]
BILLING CODE 3110–01–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
RIN 0648–AT60
pwalker on PROD1PC71 with RULES
[Docket No. 061020273–7001–03; I.D.
010307A]
Fisheries of the Northeastern United
States; Summer Flounder Fishery;
Emergency Rule Extension
National Marine Fisheries
Service (NMFS), National Oceanic and
VerDate Aug<31>2005
17:11 Jun 13, 2007
Jkt 211001
SUMMARY: NMFS is extending the
revised summer flounder total allowable
landings (TAL) implemented on January
19, 2007, until December 31, 2007, the
end of the 2007 fishing year. This
emergency rule extension specifies
allowed harvest limits for both the
commercial and recreational summer
flounder fisheries. The TAL contained
within this emergency rule extension
continues the previous harvest limits for
summer flounder that became effective
on January 19, 2007, which superceded
the harvest limits initially implemented
on January 1, 2007. This action
continues the prohibition on federally
permitted commercial vessels landing
summer flounder in Delaware in 2007
due to continued quota repayment of
previous year’s overages.
This emergency rule extension is
necessary to maintain the increased
2007 summer flounder harvest levels
previously found to be consistent with
the Magnuson-Stevens Fishery
Conservation and Management
Reauthorization Act of 2006
(Reauthorized Magnuson-Stevens Act)
through the end of the 2007 fishing year.
Extending this emergency action will
ensure continued compliance with
regulations implementing the Summer
Flounder, Scup, and Black Sea Bass
Fishery Management Plan (FMP). In
addition, this action will continue to
ensure that fishing mortality rates (F) or
exploitation rates, as specified in the
FMP, are not exceeded.
DATES: Effective from July 18, 2007
through December 31, 2007.
ADDRESSES: Copies of the Supplemental
Environmental Assessment are available
from Patricia A. Kurkul, Regional
Administrator, Northeast Region,
National Marine Fisheries Service, One
Blackburn Drive, Gloucester, MA
01930–2298. This document is also
accessible via the Internet at https://
www.nero.noaa.gov.
FOR FURTHER INFORMATION CONTACT:
50 CFR Part 648
AGENCY:
Atmospheric Administration (NOAA),
Commerce.
ACTION: Temporary rule; emergency
action extended.
Michael P. Ruccio, Fishery Policy
Analyst, (978) 281–9104.
SUPPLEMENTARY INFORMATION: Summer
flounder is currently under a rebuilding
plan. NMFS published a final rule
containing the 2007 summer flounder
TAL on December 14, 2006 (71 FR
75134). The 12.983–million-lb (5,889–
mt) TAL in that rule became effective on
January 1, 2007, which was a 45–
percent decrease from the TAL specified
for 2006.
PO 00000
Frm 00041
Fmt 4700
Sfmt 4700
32813
Following the publication of the 2007
summer flounder TAL in the Federal
Register, the Reauthorized MagnusonStevens Act was signed into law on
January 12, 2007. Contained within the
Reauthorized Magnuson-Stevens Act is
a specific provision under section 120(a)
that authorizes the Secretary of
Commerce (Secretary) to extend the
rebuilding time frame for summer
flounder to no later than January 1,
2013, provided that several specific
conditions are met. The Secretary must
determine that:
1. Overfishing is not occurring in the
summer flounder fishery and that a
mechanism is in place to ensure
overfishing does not occur in the fishery
and stock biomass levels are increasing;
2. The biomass rebuilding target
previously applicable to the summer
flounder stock will be met or exceeded
within the new time for rebuilding;
3. The extension period is based on
the status and biology of the stock and
the rate of rebuilding;
4. Monitoring will ensure rebuilding
continues;
5. The extension meets the
requirements of National Standard 1
found at section 301(a)(1) of the
Magnuson-Stevens Act; and
6. The best scientific information
available shows that the extension will
allow continued rebuilding.
On behalf of the Secretary, NMFS
previously determined that these six
criteria had been met and that there is
a reasonable basis to extend the summer
flounder rebuilding time frame to no
later than January 1, 2013. Based on
these determinations, NMFS
implemented an emergency rule,
effective January 19, 2007 (72 FR 2458),
to increase the TAL to 17.112 million lb
(7,762 mt). The agency’s decision to
enact emergency rulemaking was
consistent with the policy guidelines for
the use of emergency rules published in
the Federal Register on August 21, 1997
(62 FR 44421).
A detailed discussion of the
Secretarial determinations made relative
to section 120(a) of the revised
Magnuson-Stevens Act appears in the
initial emergency rule (72 FR 2458,
January 19, 2007) and is not repeated
here. The emergency rule TAL is based
on the revised rebuilding time frame
ending no later than January 1, 2013,
which supersedes the previous TAL of
12.983 million lb (5,889 mt) that was
based on a rebuilding period end date
of January 1, 2010. The 17.112–millionlb (7,762–mt) TAL will continue to be
allocated 10.27 million lb (4,658 mt) to
the commercial sector and 6.84 million
lb (3,104 mt) to the recreational sector
under this extension. The commercial
E:\FR\FM\14JNR1.SGM
14JNR1
]]>Agencies
[Federal Register Volume 72, Number 114 (Thursday, June 14, 2007)]
[Rules and Regulations]
[Pages 32809-32813]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-11328]
=======================================================================
-----------------------------------------------------------------------
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: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Office of Federal Procurement Policy, Cost Accounting
Standards (CAS) Board, is revising the threshold for the application of
CAS to negotiated Government contracts. This rulemaking is authorized
pursuant to Section 26 of the Office of Federal Procurement Policy Act.
The Board is taking final action on this topic in order to adjust the
CAS applicability threshold in accordance with Section 822 of the 2006
National Defense Authorization Act (Pub. L. 109-163). Section 822
amended 41 U.S.C. 422(f)(2)(A) to require that the threshold for CAS
applicability be the same as the threshold for compliance with the
Truth in Negotiations Act (TINA).
DATES: This final rule is effective June 14, 2007.
FOR FURTHER INFORMATION CONTACT: Laura Auletta, Manager, Cost
Accounting Standards Board, 725 17th Street, NW., Room 9013,
Washington, DC 20503 (telephone: 202-395-3256).
SUPPLEMENTARY INFORMATION:
A. Background
On December 15, 2005, the CAS Board issued a proposed rule with
request for comment (70 FR 73423) for the purpose of implementing Sec.
807 of the Ronald W. Reagan National Defense Authorization Act for
Fiscal Year 2005, Pub. L. 108-375, ``Inflation Adjustment of
Acquisition-Related Dollar Thresholds.'' Section 807 of Pub. L. 108-375
requires the periodic adjustment of acquisition-related thresholds
contained in statutes that were in effect on October 1, 2000, with
certain exceptions. The Federal Acquisition Regulation (FAR) Council is
authorized to adjust these thresholds based on increases in the
Consumer Price Index for all-urban consumers (CPI) and as prescribed in
the Public Law.
Based on further review, the Board has determined that its
thresholds are not subject to the provisions of Section 807 of the Pub.
L 108-375 because these thresholds are not ``acquisition related,'' as
defined by Section 807. Therefore, this final rule does not adjust the
CAS thresholds to reflect the provisions of Section 807.
However, subsequent to the issuance of the CAS Board's proposed
rule, Section 822 of the 2006 National Defense Authorization Act (Pub.
L. 109-163) amended 41 U.S.C. 422(f)(2)(A) to require that the
threshold for CAS applicability be the same as the threshold for
compliance with the Truth in Negotiations Act (TINA). The TINA
threshold is currently $650,000 (71 FR 57363). Accordingly, the Board
is increasing the CAS applicability threshold to $650,000 to comply
with Public Law 109-163.
B. Public Comments
The Board received three sets of public comments in response to the
proposed rule.
1. PL 108-375 Does Not Require Threshold Adjustments
Comment: Two commenters opined that Section 807 of Public Law 108-
375 does not apply to statutory thresholds in the Board's rules,
regulations and standards. These commenters asserted that the law
applies only to acquisition-related statutory dollar thresholds
contained in the FAR. Thus, the Board is not required to adjust its
statutory thresholds in response to Pub. L. 108-375.
Response: After further review of this issue, the Board agrees that
Section 807 does not apply to the CAS thresholds. Section 807 of Public
Law 108-375 requires the Federal Acquisition Regulatory Council to
adjust each ``acquisition-related dollar threshold.'' Section 807
defines an acquisition-related dollar threshold as ``a dollar threshold
that is specified in law as a factor in defining the scope of the
applicability of a policy, procedure, requirement, or restriction
provided in that law to the procurement of property or services by an
executive agency, as determined by the Federal Acquisition Regulatory
Council.'' The scope and applicability of the CAS is within the sole
purview of the CAS Board. The Federal Acquisition Regulatory Council
does not determine the scope or applicability of the Cost Accounting
Standards. Therefore, for purposes of applying Section 807, the
thresholds in the CAS do not meet the definition of an ``acquisition
threshold.'' Thus, the requirements of Public Law 108-375 do not apply
to the CAS thresholds. However, the Board is issuing a final rule to
adjust the CAS applicability threshold required by Public Law 109-163.
2. Consistency Between CAS Applicability and TINA Thresholds
Comment: One commenter recommended that the CAS applicability
threshold be modified to adopt the Truth in Negotiations Act (TINA)
threshold for requiring cost or pricing data (FAR 15.403-4) since it
will be very difficult to administer the impact of CAS issues
associated with such contracts.
Response: As previously noted, shortly after the publication of the
proposed rule, 41 U.S.C. 422(f)(2)(A)
[[Page 32810]]
was amended to require that the CAS applicability threshold be equal to
the TINA threshold. Accordingly, this final rule adjusts the CAS
applicability threshold to $650,000, which is the current TINA
threshold.
3. Advisability of Adjusting CAS Thresholds
Comment: One commenter asserted that the proposed threshold
adjustments represent bad public policy and that previous increases in
these thresholds have been ``simply astounding, and far in excess of
any inflationary increases, no matter how measured.''
Response: Consistent with the intent of the proposed rule, the
final rule includes only those adjustments of the CAS applicability
threshold that are statutorily required. As such, the Board does not
believe the commenter's assertion regarding the adjustments in the
final rule has any merit.
4. Failure To Track CAS Thresholds to Inflation Expands CAS
Applicability Beyond Its Original Intent
Comment: One commenter recommended that the Board independently
review its thresholds to determine whether ``economic factors have
caused more contractors to have become subject to CAS coverage'' and
``consider if there are now contractors covered in 2006 that the Board
did not intend to cover in 1992.''
Response: The purpose of the proposed and final rules was to adjust
the CAS thresholds to reflect statutory requirements. As such, the
Board is confining the adjustment of CAS thresholds in this final rule
to those adjustments required by statute. The Board will consider the
commenter's recommendation to review the other CAS thresholds when
formulating its agenda for future actions.
C. Paperwork Reduction Act
The Paperwork Reduction Act, Public Law 96-511, does not apply to
this rulemaking, because this rule imposes 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.
D. Executive Order 12866 and the Regulatory Flexibility Act
The Board certifies that this rule will not have a significant
effect on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because small
businesses are exempt from the application of the Cost Accounting
Standards.
List of Subjects in 48 CFR Part 9903
Accounting, Government procurement.
Paul A. Denett,
Administrator, Office of Federal Procurement Policy.
0
For the reasons set forth in this preamble, Chapter 99 of Title 48 of
the Code of Federal Regulations is amended as set forth below:
PART 9901--RULES AND PROCEDURES
0
1. The authority citation for part 9901 continues to read as follows:
Authority: Pub. L. 100-679, 102 Stat. 4056, 41 U.S.C. 422.
0
2. Revise section 9901.306 to read as follows:
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 $650,000,
other than contracts or subcontracts that have been exempted by the
Board's regulations.
PART 9903--CONTRACT COVERAGE
0
3. The authority citation for part 9903 continues to read as follows:
Authority: Pub. L. 100-679, 102 Stat. 4056, 41 U.S.C. 422.
Subpart 9903.2--CAS Program Requirements
0
4. Section 9903.201-1 is amended by revising paragraph (b)(2) to read
as follows:
9903.201-1 CAS applicability.
* * * * *
(b) * * *
(2) Negotiated contracts and subcontracts not in excess of
$650,000. For purposes of this paragraph (b)(2) an order issued by one
segment to another segment shall be treated as a subcontract.
* * * * *
0
5. Section 9903.201-2 is amended by revising paragraphs (c)(3) and
(c)(5) to read as follows:
9903.201-2 Types of 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 $650,000, 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 $650,000. 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.
* * * * *
0
6. Section 9903.201-3 is amended by revising the provision heading and
by revising paragraph (a) in Part I of the provision to read as
follows:
9903.201-3 Solicitation provisions.
* * * * *
Cost Accounting Standards Notices and Certification (June 2007)
* * * * *
I. Disclosure Statement--Cost Accounting Practices and
Certification
(a) Any contract in excess of $650,000 resulting from this
solicitation, except for those contracts which are exempt as
specified in 9903.201-1.
* * * * *
0
7. Section 9903.201-4 is revised to read as follows:
9903.201-4 Contract clauses.
(a) Cost Accounting Standards. (1) The contracting officer shall
insert the clause set forth below, Cost Accounting Standards, in
negotiated contracts, unless the contract is exempted (see 9903.201-1),
the contract is subject to modified coverage (see 9903.201-2), or the
clause prescribed in paragraph (e) of this section is used.
(2) The clause below requires the contractor to comply with all CAS
specified in part 9904, to disclose actual cost accounting practices
(applicable to CAS-covered contracts only), and to follow disclosed and
established cost accounting practices consistently.
Cost Accounting Standards (June 2007)
(a) Unless the contract is exempt under 9903.201-1 and 9903.201-
2, the provisions
[[Page 32811]]
of 9903 are incorporated herein by reference and the Contractor in
connection with this contract, shall--
(1) (CAS-covered Contracts Only) By submission of a Disclosure
Statement, disclosed in writing the Contractor's cost accounting
practices as required by 9903.202-1 through 9903.202-5 including
methods of distinguishing direct costs from indirect costs and the
basis used for allocating indirect costs. The practices disclosed
for this contract shall be the same as the practices currently
disclosed and applied on all other contracts and subcontracts being
performed by the Contractor and which contain a Cost Accounting
Standards (CAS) clause. If the Contractor has notified the
Contracting Officer that the Disclosure Statement contains trade
secrets, and commercial or financial information which is privileged
and confidential, the Disclosure Statement shall be protected and
shall not be released outside of the Government.
(2) Follow consistently the Contractor's cost accounting
practices in accumulating and reporting contract performance cost
data concerning this contract. If any change in cost accounting
practices is made for the purposes of any contract or subcontract
subject to CAS requirements, the change must be applied
prospectively to this contract and the Disclosure Statement must be
amended accordingly. If the contract price or cost allowance of this
contract is affected by such changes, adjustment shall be made in
accordance with subparagraph (a)(4) or (a)(5) of this clause, as
appropriate.
(3) Comply with all CAS, including any modifications and
interpretations indicated thereto contained in part 9904, in effect
on the date of award of this contract or, if the Contractor has
submitted cost or pricing data, on the date of final agreement on
price as shown on the Contractor's signed certificate of current
cost or pricing data. The Contractor shall also comply with any CAS
(or modifications to CAS) which hereafter become applicable to a
contract or subcontract of the Contractor. Such compliance shall be
required prospectively from the date of applicability of such
contract or subcontract.
(4)(i) Agree to an equitable adjustment as provided in the
Changes clause of this contract if the contract cost is affected by
a change which, pursuant to subparagraph (a)(3) of this clause, the
Contractor is required to make to the Contractor's established cost
accounting practices.
(ii) Negotiate with the Contracting Officer to determine the
terms and conditions under which a change may be made to a cost
accounting practice, other than a change made under other provisions
of subparagraph (a)(4) of this clause; provided that no agreement
may be made under this provision that will increase costs paid by
the United States.
(iii) When the parties agree to a change to a cost accounting
practice, other than a change under subdivision (a)(4)(i) of this
clause, negotiate an equitable adjustment as provided in the Changes
clause of this contract.
(5) Agree to an adjustment of the contract price or cost
allowance, as appropriate, if the Contractor or a subcontractor
fails to comply with an applicable Cost Accounting Standard, or to
follow any cost accounting practice consistently and such failure
results in any increased costs paid by the United States. Such
adjustment shall provide for recovery of the increased costs to the
United States, together with interest thereon computed at the annual
rate established under section 6621(a)(2) of the Internal Revenue
Code of 1986 (26 U.S.C. 6621(a)(2)) for such period, from the time
the payment by the United States was made to the time the adjustment
is effected. In no case shall the Government recover costs greater
than the increased cost to the Government, in the aggregate, on the
relevant contracts subject to the price adjustment, unless the
Contractor made a change in its cost accounting practices of which
it was aware or should have been aware at the time of price
negotiations and which it failed to disclose to the Government.
(b) If the parties fail to agree whether the Contractor or a
subcontractor has complied with an applicable CAS in part 9904 or a
CAS rule or regulation in part 9903 and as to any cost adjustment
demanded by the United States, such failure to agree will constitute
a dispute under the Contract Disputes Act (41 U.S.C. 601).
(c) The Contractor shall permit any authorized representatives
of the Government to examine and make copies of any documents,
papers, or records relating to compliance with the requirements of
this clause.
(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 $650,000,
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)
(b) [Reserved]
(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 $650,000 but less than $50
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) The clause below requires the Contractor to comply with CAS
9904.401, 9904.402, 9904.405, and 9904.406, to disclose (if it meets
certain requirements) actual cost accounting practices, and to follow
consistently disclosed and established cost accounting practices.
Disclosure and Consistency of Cost Accounting Practices (June 2007)
(a) The Contractor, in connection with this contract, shall--
(1) Comply with the requirements of 9904.401, Consistency in
Estimating, Accumulating, and Reporting Costs; 9904.402, Consistency
in Allocating Costs Incurred for the Same Purpose; 9904.405,
Accounting for Unallowable Costs; and 9904.406, Cost Accounting
Standard--Cost Accounting Period, in effect on the date of award of
this contract, as indicated in part 9904.
(2) (CAS-covered Contracts Only) If it is a business unit of a
company required to submit a Disclosure Statement, disclose in
writing its cost accounting practices as required by 9903.202-1
through 9903.202-5. If the Contractor has notified the Contracting
Officer that the Disclosure Statement contains trade secrets and
commercial or financial information which is privileged and
confidential, the Disclosure Statement shall be protected and shall
not be released outside of the Government.
(3)(i) Follow consistently the Contractor's cost accounting
practices. A change to such practices may be proposed, however, by
either the Government or the Contractor, and the Contractor agrees
to negotiate with the Contracting Officer the terms and conditions
under which a change may be made. After the terms and conditions
under which the change is to be made have been agreed to, the change
must be applied prospectively to this contract, and the Disclosure
Statement, if affected, must be amended accordingly.
(ii) The Contractor shall, when the parties agree to a change to
a cost accounting practice and the Contracting Officer has made the
finding required in 9903.201-6(c) that the change is desirable and
not detrimental to the interests of the Government, negotiate an
equitable adjustment as provided in the Changes clause of this
contract. In the absence of the required finding, no agreement may
be made under this contract clause that will increase costs paid by
the United States.
(4) Agree to an adjustment of the contract price or cost
allowance, as appropriate, if the Contractor or a subcontractor
fails to comply with the applicable CAS or to follow any cost
accounting practice, and such failure results in any increased costs
paid by the United States. Such adjustment shall provide for
recovery of the increased costs to the United States, together with
interest thereon computed at the annual rate established under
section 6621(a)(2) of the Internal Revenue Code of 1986 (26 U.S.C.
6621(a)(2)) for such period, from the time the payment by the United
States was made to the time the adjustment is effected.
(b) If the parties fail to agree whether the Contractor has
complied with an applicable
[[Page 32812]]
CAS rule, or regulation as specified in parts 9903 and 9904 and as
to any cost adjustment demanded by the United States, such failure
to agree will constitute a dispute under the Contract Disputes Act
(41 U.S.C. 601).
(c) The Contractor shall permit any authorized representatives
of the Government to examine and make copies of any documents,
papers, and records relating to compliance with the requirements of
this clause.
(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, except that--
(1) 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.
(2) This requirement shall apply only to negotiated subcontracts
in excess of $650,000.
(3) 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)
(d) [Reserved]
(e) Cost Accounting Standards--Educational Institutions. (1) The
contracting officer shall insert the clause set forth below, Cost
Accounting Standards--Educational Institutions, in negotiated contracts
awarded to educational institutions, unless the contract is exempted
(see 9903.201-1), the contract is to be performed by an FFRDC (see
9903.201-2(c)(5)), or the provision at 9903.201-2(c)(6) applies.
(2) The clause below requires the educational institution to comply
with all CAS specified in part 9905, to disclose actual cost accounting
practices as required by 9903.202-1(f), and to follow disclosed and
established cost accounting practices consistently.
Cost Accounting Standards--Educational Institutions (June 2007)
(a) Unless the contract is exempt under 9903.201-1 and 9903.201-
2, the provisions of part 9903 are incorporated herein by reference
and the Contractor in connection with this contract, shall--
(1) (CAS-covered Contracts Only) If a business unit of an
educational institution required to submit a Disclosure Statement,
disclose in writing the Contractor's cost accounting practices as
required by 9903.202-1 through 9903.202-5 including methods of
distinguishing direct costs from indirect costs and the basis used
for accumulating and allocating indirect costs. The practices
disclosed for this contract shall be the same as the practices
currently disclosed and applied on all other contracts and
subcontracts being performed by the Contractor and which contain a
Cost Accounting Standards (CAS) clause. If the Contractor has
notified the Contracting Officer that the Disclosure Statement
contains trade secrets, and commercial or financial information
which is privileged and confidential, the Disclosure Statement shall
be protected and shall not be released outside of the Government.
(2) Follow consistently the Contractor's cost accounting
practices in accumulating and reporting contract performance cost
data concerning this contract. If any change in cost accounting
practices is made for the purposes of any contract or subcontract
subject to CAS requirements, the change must be applied
prospectively to this contract and the Disclosure Statement, if
required, must be amended accordingly. If an accounting principle
change mandated under Office of Management and Budget (OMB) Circular
A-21, Cost Principles for Educational Institutions, requires that a
change in the Contractor's cost accounting practices be made after
the date of this contract award, the change must be applied
prospectively to this contract and the Disclosure Statement, if
required, must be amended accordingly. If the contract price or cost
allowance of this contract is affected by such changes, adjustment
shall be made in accordance with subparagraph (a)(4) or (a)(5) of
this clause, as appropriate.
(3) Comply with all CAS, including any modifications and
interpretations indicated thereto contained in 48 CFR part 9905, in
effect on the date of award of this contract or, if the Contractor
has submitted cost or pricing data, on the date of final agreement
on price as shown on the Contractor's signed certificate of current
cost or pricing data. The Contractor shall also comply with any CAS
(or modifications to CAS) which hereafter become applicable to a
contract or subcontract of the Contractor. Such compliance shall be
required prospectively from the date of applicability to such
contract or subcontract.
(4)(i) Agree to an equitable adjustment as provided in the
Changes clause of this contract if the contract cost is affected by
a change which, pursuant to subparagraph (a)(3) of this clause, the
Contractor is required to make to the Contractor's established cost
accounting practices.
(ii) Negotiate with the Contracting Officer to determine the
terms and conditions under which a change may be made to a cost
accounting practice, other than a change made under other provisions
of subparagraph (a)(4) of this clause; provided that no agreement
may be made under this provision that will increase costs paid by
the United States.
(iii) When the parties agree to a change to a cost accounting
practice, other than a change under subdivision (a)(4)(i) or
(a)(4)(iv) of this clause, negotiate an equitable adjustment as
provided in the Changes clause of this contract.
(iv) Agree to an equitable adjustment as provided in the Changes
clause of this contract, if the contract cost is materially affected
by an OMB Circular A-21 accounting principle amendment which, on
becoming effective after the date of contract award, requires the
Contractor to make a change to the Contractor's established cost
accounting practices.
(5) Agree to an adjustment of the contract price or cost
allowance, as appropriate, if the Contractor or a subcontractor
fails to comply with an applicable Cost Accounting Standard, or to
follow any cost accounting practice consistently and such failure
results in any increased costs paid by the United States. Such
adjustment shall provide for recovery of the increased costs to the
United States, together with interest thereon computed at the annual
rate established under section 6621(a)(2) of the Internal Revenue
Code of 1986 (26 U.S.C. 6621(a)(2)) for such period, from the time
the payment by the United States was made to the time the adjustment
is effected. In no case shall the Government recover costs greater
than the increased cost to the Government, in the aggregate, on the
relevant contracts subject to the price adjustment, unless the
Contractor made a change in its cost accounting practices of which
it was aware or should have been aware at the time of price
negotiations and which it failed to disclose to the Government.
(b) If the parties fail to agree whether the Contractor or a
subcontractor has complied with an applicable CAS or a CAS rule or
regulation in 9903 and as to any cost adjustment demanded by the
United States, such failure to agree will constitute a dispute under
the Contract Disputes Act (41 U.S.C. 601).
(c) The Contractor shall permit any authorized representatives
of the Government to examine and make copies of any documents,
papers, or records relating to compliance with the requirements of
this clause.
(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) 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; and
(2) This requirement shall apply only to negotiated subcontracts
in excess of $650,000.
(3) 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)
0
8. Section 9903.202-1 is amended by revising:
0
A. Paragraph (c);
0
B. Paragraph (f)(2)(i); and
0
C. Paragraphs (f)(3)(i), (ii), and (iii)
The revisions read as follows:
9903.202-1 General requirements.
* * * * *
(c) When a Disclosure Statement is required, a separate Disclosure
[[Page 32813]]
Statement must be submitted for each segment whose costs included in
the total price of any CAS-covered contract or subcontract exceed
$650,000, unless * * *
(f) * * *
(2) * * *
(i) Any business unit of an educational institution that is
selected to receive a CAS-covered contract or subcontract in excess of
$650,000 and is part of a college or university location listed in
Exhibit A of Office of Management and Budget (OMB) Circular A-21 shall
submit a Disclosure Statement before award.* * *
(3) * * *
(i) For business units that are selected to receive a CAS-covered
contract or subcontract in excess of $650,000 and are part of the first
20 college or university locations (i.e., numbers 1 through 20) listed
in Exhibit A of OMB Circular A-21, Disclosure Statements shall be
submitted within six months after the date of contract award.
(ii) For business units that are selected to receive a CAS-covered
contract or subcontract in excess of $650,000 and are part of a college
or university location that is listed as one of the institutions
numbered 21 through 50, in Exhibit A of OMB Circular A-21, Disclosure
Statements shall be submitted during the six month period ending twelve
months after the date of contract award.
(iii) For business units that are selected to receive a CAS-covered
contract or subcontract in excess of $650,000 and are part of a college
or university location that is listed as one of the institutions
numbered 51 through 99, in Exhibit A of OMB Circular A-21, Disclosure
Statements shall be submitted during the six month period ending
eighteen months after the date of contract award.
[FR Doc. E7-11328 Filed 6-13-07; 8:45 am]
BILLING CODE 3110-01-P
