General Services Administration Acquisition Regulation; GSAR Case 2008-G513; Rewrite of GSAR Part 543, Contract Modifications, 864-866 [E9-215]

Download as PDF 864 Federal Register / Vol. 74, No. 6 / Friday, January 9, 2009 / Rules and Regulations (b) A copy of GSA Form 1678 will be forwarded to the Contractor with the contract. Additional copies of the form, if needed, may be reproduced by the Contractor. (End of clause) [FR Doc. E9–216 Filed 1–8–09; 8:45 am] BILLING CODE 6820–61–S GENERAL SERVICES ADMINISTRATION 48 CFR Parts 543 and 552 [GSAR Amendment 2005–04; GSAR Case 2008–G513 (Change 25); Docket 2009–0012; Sequence 2] RIN 3090–AI83 General Services Administration Acquisition Regulation; GSAR Case 2008–G513; Rewrite of GSAR Part 543, Contract Modifications AGENCIES: General Services Administration (GSA), Office of the Chief Acquisition Officer. ACTION: Final rule. The General Services Administration (GSA) is amending the GSA Acquisition Regulation (GSAR) to revise the language that provides requirements for contract modifications. DATES: Effective Date: January 9, 2009. FOR FURTHER INFORMATION CONTACT: Ms. Jeritta Parnell at (202) 501–4082, for clarification of content. For information pertaining to the status or publication schedules, contact the Regulatory Secretariat (VPR), Room 4041, GS Building, Washington, DC 20405, (202) 501–4755. Please cite Amendment 2005–04, GSAR case 2008–G513 (Change 25). SUPPLEMENTARY INFORMATION: yshivers on PROD1PC62 with RULES SUMMARY: A. Background The GSA is amending the GSAR to revise GSAR 543.205, Contract clauses, and associated clauses in GSAR 552.243. The information in GSAR 543.205, Contract clauses, is revised to remove 543.205(a)(1) and 543.205(b) and be re-numbered accordingly. The information in 543.205(a)(1) is deleted. This clause prescription is no longer necessary. The information in 543.205(b) is relocated to part 538. The prescription for the clause at 552.243– 71, Equitable Adjustment, is revised to include the clause title for FAR 52.243– 4, Changes. The clause at 552.243–70, Pricing of Adjustments, is deleted. Information formerly contained in this clause is now contained in the revised clause at 552.243–71, Equitable Adjustments. The clause at 552.243–71, VerDate Nov<24>2008 15:07 Jan 08, 2009 Jkt 217001 Equitable Adjustments, is revised to clarify costs, overhead, profit, and proposal preparation costs. The clause at 552.243–72, Modifications, (Multiple Award Schedule) is relocated to GSAR part 538. The GSA published a proposed rule with request for comments in the Federal Register at 73 FR 35614 on June 24, 2008. There were four public comments from two respondents. One respondent recommended adding the phrase ‘‘impacted by the change’’ to paragraph (e) of the clause at 552.243– 71 to limit the equitable adjustment to only the work impacted by the change. The GSA agrees and the language was revised to include this recommendation. The second respondent made three suggestions regarding internal GSA procedures. These suggestions are outside the scope of the GSAR case as published. Additional editorial corrections were made in paragraphs (b), (d), and (j)(2)of the clause at 552.243–71. 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. Regulatory Flexibility Act The General Services Administration certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule updates, clarifies, and reorganizes existing language. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply because the changes to the GSAR do not impose recordkeeping or information collection requirements, or otherwise collect information from offerors, contractors, or members of the public that require approval of the Office of Management and Budget under 44 U.S.C.3501, et seq. List of Subjects in 48 CFR Parts 543 and 552 Government procurement. Dated: December 8, 2008. David A. Drabkin, Senior Procurement Executive, Office of the Chief Acquisition Officer, General Services Administration. Therefore, GSA amends 48 CFR parts 543 and 552 as set forth below: ■ 1. The authority citation for 48 CFR parts 543 and 552 continues to read as follows: ■ PO 00000 Frm 00010 Fmt 4700 Sfmt 4700 Authority: 40 U.S.C. 121(c). PART 543—CONTRACT MODIFICATONS 2. Revise section 543.205 to read as follows: ■ 543.205 Contract clauses. The contracting officer shall insert 552.243–71, Equitable Adjustments, in solicitations and contracts containing FAR 52.243–4, Changes. PART 552—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 552.243–70 [Removed] 3. Remove section 552.243–70. 4. Revise section 552.243–71 to read as follows: ■ ■ 552.243–71 Equitable Adjustments. As prescribed in 543.205, insert the following clause: Equitable Adjustments (JAN 2009) (a) This clause governs the determination of equitable adjustments to which the Contractor may be entitled under the ‘‘Changes’’ clause prescribed by FAR 52.243–4, the ‘‘Differing Site Conditions’’ clause prescribed by FAR 52.236–2, and any other provision of this contract allowing entitlement to an equitable adjustment. This clause does not govern determination of the Contractor’s relief allowable under the ‘‘Suspension of Work’’ clause prescribed by FAR 52.242–14. (b) At the written request of the Contracting Officer, the Contractor shall submit a proposal, in accordance with the requirements set forth herein, for an equitable adjustment to the contract for changes or other conditions that may entitle a Contractor to an equitable adjustment. If the Contractor deems an oral or written order to be a change to the contract, it shall promptly submit to the Contracting Officer a proposal for equitable adjustment attributable to such deemed change. The proposal shall also conform to the requirements set forth herein. (c) The proposal shall be submitted within the time specified in the ‘‘Changes’’ clause, or such other time as may reasonably be required by the Contracting Officer. In the case of a proposal submitted based on the ‘‘Differing Site Conditions’’ clause, the notice requirement of that clause shall be met. (d) Proposals for equitable adjustments, including no cost requests for adjustment of the contract’s required E:\FR\FM\09JAR1.SGM 09JAR1 yshivers on PROD1PC62 with RULES Federal Register / Vol. 74, No. 6 / Friday, January 9, 2009 / Rules and Regulations completion date, shall include a detailed breakdown of the following elements, as applicable: (1) Direct Costs. (2) Markups. (3) Change to the time for completion specified in the contract. (e) Direct Costs. The Contractor shall separately identify each item of deleted and added work associated with the change or other condition giving rise to entitlement to an equitable adjustment, including increases or decreases to unchanged work impacted by the change. For each item of work so identified, the Contractor shall propose for itself and, if applicable, its first two tiers of subcontractors, the following direct costs: (1) Material cost broken down by trade, supplier, material description, quantity of material units, and unit cost (including all manufacturing burden associated with material fabrication and cost of delivery to site, unless separately itemized); (2) Labor cost broken down by trade, employer, occupation, quantity of labor hours, and burdened hourly labor rate, together with itemization of applied labor burdens (exclusive of employer’s overhead, profit, and any labor cost burdens carried in employer’s overhead rate); (3) Cost of equipment required to perform the work, identified with material to be placed or operation to be performed; (4) Cost of preparation and/or revision to shop drawings and other submittals with detail set forth in paragraphs (e)(1) and (e)(2) of this clause; (5) Delivery costs, if not included in material unit costs; (6) Time-related costs not separately identified as direct costs, and not included in the Contractor’s or subcontractors’ overhead rates, as specified in paragraph (g) of this clause; and (7) Other direct costs. (f) Marked-up costs of subcontractors below the second tier may be treated as other direct costs of a second tier subcontractor, unless the Contracting Officer requires a detailed breakdown under paragraph (i) of this clause. (g) Extensions of Time and TimeRelated Costs. The Contractor shall propose a daily rate for each firm’s timerelated costs during the affected period, and, for each firm, the increase or decrease in the number of work days of performance attributable to the change or other condition giving rise to entitlement to an equitable adjustment, with supporting analysis. Entitlement to time and time-related costs shall be determined as follows: VerDate Nov<24>2008 15:07 Jan 08, 2009 Jkt 217001 (1) Increases or decreases to a firm’s time-related costs shall be allowed only if such increase or decrease necessarily and exclusively results from the change or other condition giving rise to entitlement to an equitable adjustment. (2) The Contractor shall not be entitled to an extension of time or recovery of its own time-related costs except to the extent that such change or other condition necessarily and exclusively causes its duration of performance to extend beyond the completion date specified in the contract. (3) Costs may be characterized as time-related costs only if they are incurred solely to support performance of this contract and the increase or decrease in such costs is solely dependent upon the duration of a firm’s performance of work. (4) Costs may not be characterized as time-related costs if they are included in the calculation of a firm’s overhead rate. (5) Equitable adjustment of time and time-related costs shall not be allowed unless the analysis supporting the proposal complies with provisions specified elsewhere in this contract regarding the Contractor’s project schedule. (h) Markups. For each firm whose direct costs are separately identified in the proposal, the Contractor shall propose an overhead rate, profit rate, and where applicable, a bond rate and insurance rate. Markups shall be determined and applied as follows: (1) Overhead rates shall be negotiated, and may be subject to audit and adjustment. (2) Profit rates shall be negotiated, but shall not exceed ten percent, unless entitlement to a higher rate of profit may be demonstrated. (3) The Contractor and its subcontractor[s] shall not be allowed overhead or profit on the overhead or profit received by a subcontractor, except to the extent that the subcontractor’s costs are properly included in other direct costs as specified in paragraph (f) of this clause. (4) Overhead rates shall be applied to the direct costs of work performed by a firm, and shall not be allowed on the direct costs of work performed by a subcontractor to that firm at any tier except as set forth below in paragraphs (h)(6) and (h)(7) of this clause. (5) Profit rates shall be applied to the sum of a firm’s direct costs and the overhead allowed on the direct costs of work performed by that firm. (6) Overhead and profit shall be allowed on the direct costs of work performed by a subcontractor within two tiers of a firm at rates equal to only PO 00000 Frm 00011 Fmt 4700 Sfmt 4700 865 fifty percent of the overhead and profit rates negotiated pursuant to paragraphs (h)(1) and (h)(2) of this clause for that firm, but not in excess of ten percent when combined. (7) Overhead and profit shall not be allowed on the direct costs of a subcontractor more than two tiers below the firm claiming overhead and profit for subcontractor direct costs. (8) If changes to a Contractor’s or subcontractor’s bond or insurance premiums are computed as a percentage of the gross change in contract value, markups for bond and insurance shall be applied after all overhead and profit is applied. Bond and insurance rates shall not be applied if the associated costs are included in the calculation of a firm’s overhead rate. (9) No markup shall be applied to a firm’s costs other than those specified herein. (i) At the request of the Contracting Officer, the Contractor shall provide such other information as may be reasonably necessary to allow evaluation of the proposal. If the proposal includes significant costs incurred by a subcontractor below the second tier, the Contracting Officer may require the same detail for those costs as required for the first two tiers of subcontractors, and markups shall be applied to these subcontractor costs in accordance with paragraph (h). (j) Proposal Preparation Costs. If performed by the firm claiming them, proposal preparations costs shall be included in the labor hours proposed as direct costs. If performed by an outside consultant or law firm, proposal preparation costs shall be treated as other direct costs to the firm incurring them. Requests for proposal preparation costs shall include the following: (1) A copy of the contract or other documentation identifying the consultant or firm, the scope of the services performed, the manner in which the consultant or firm was to be compensated, and if compensation was paid on an hourly basis, the fully burdened and marked-up hourly rates for the services provided. (2) If compensation was paid on an hourly basis, documentation of the quantity of hours worked, including descriptions of the activities for which the hours were billed, and applicable rates. (3) Written proof of payment of the costs requested. The sufficiency of the proof shall be determined by the Contracting Officer. (k) Proposal preparation costs shall be allowed only if— (1) The nature and complexity of the change or other condition giving rise to E:\FR\FM\09JAR1.SGM 09JAR1 yshivers on PROD1PC62 with RULES 866 Federal Register / Vol. 74, No. 6 / Friday, January 9, 2009 / Rules and Regulations entitlement to an equitable adjustment warrants estimating, scheduling, or other effort not reasonably foreseeable at the time of contract award; (2) Proposed costs are not included in a firm’s time-related costs or overhead rate; and (3) Proposed costs were incurred prior to a Contracting Officer’s unilateral determination of an equitable adjustment under the conditions set forth in paragraph (o), or were incurred prior to the time the request for equitable adjustment otherwise became a matter in dispute. (l) Proposed direct costs, markups, and proposal preparation costs shall be allowable in the determination of an equitable adjustment only if they are reasonable and otherwise consistent with the contract cost principles and procedures set forth in part 31 of the Federal Acquisition Regulation (48 CFR part 31) in effect on the date of this contract. Characterization of costs as direct costs, time-related costs, or overhead costs must be consistent with the requesting firm’s accounting practices on other work under this contract and other contracts. (m) If the Contracting Officer determines that it is in the Government’s interest that the Contractor proceed with a change before negotiation of an equitable adjustment is completed, the Contracting Officer may order the Contractor to proceed on the basis of a unilateral modification to the contract increasing or decreasing the contract price by an amount to be determined later. Such increase or decrease shall not exceed the increase or decrease proposed by the Contractor. (n) If the parties cannot agree to an equitable adjustment, the Contracting Officer may determine the equitable adjustment unilaterally. (o) The Contractor shall not be entitled to any proposal preparation costs incurred subsequent to the date of a unilateral determination or denial of the request if the Contracting Officer issues a unilateral determination or denial under any of the following circumstances: (1) The Contractor fails to submit a proposal within the time required by this contract or such time as may reasonably be required by the Contracting Officer. (2) The Contractor fails to submit additional information requested by the Contracting Officer within the time reasonably required. (3) Agreement to an equitable adjustment cannot be reached within 60 days of submission of the Contractor’s proposal or receipt of additional requested information, despite the VerDate Nov<24>2008 15:07 Jan 08, 2009 Jkt 217001 Contracting Officer’s diligent efforts to negotiate the equitable adjustment. (End of clause) 552.243–72 ■ [Removed] 5. Remove section 552.243–72. [FR Doc. E9–215 Filed 1–8–09; 8:45 am] BILLING CODE 6820–61–P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 679 [Docket No. 071106673–8011–02] RIN 0648–XM47 Fisheries of the Exclusive Economic Zone Off Alaska; Inseason Adjustment to the 2009 Bering Sea Pollock Total Allowable Catch Amount; Correction AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Correction to a temporary rule; inseason adjustment; request for comments. This document corrects the comment period and a date for a temporary rule that published in the Federal Register on January 2, 2009 (74 FR 38). That rule adjusted the 2009 total allowable catch amount (TAC) for the Bering Sea pollock fishery to ensure the Bering Sea pollock TAC does not exceed the appropriate amount based on the best available scientific information for pollock in the Bering Sea subarea. One typographical error specifies that comments are due on the date of publication and another typographical error specifies that comments are due on January 13, 2008. The correct date is January 13, 2009. The date that data became available is also corrected. DATES: Effective 1200 hrs, Alaska local time (A.l.t.), December 29, 2008, through 2400 hrs, A.l.t., December 31, 2009, unless otherwise modified or superceded through publication of a notification in the Federal Register. Comments must be received at the following address no later than 4:30 p.m., A.l.t., January 13, 2009. ADDRESSES: Send comments to Sue Salveson, Assistant Regional Administrator, Sustainable Fisheries Division, Alaska Region, NMFS, Attn: Ellen Sebastian. You may submit comments, identified by ‘‘RIN 0648– XM47,’’ by any one of the following methods: SUMMARY: PO 00000 Frm 00012 Fmt 4700 Sfmt 4700 • Electronic Submissions: Submit all electronic public comments via the Federal eRulemaking Portal website at https://www.regulations.gov. • Mail: P. O. Box 21668, Juneau, AK 99802. • Fax: (907) 586–7557. • Hand delivery to the Federal Building: 709 West 9th Street, Room 420A, Juneau, AK. All comments received are a part of the public record and will generally be posted to https://www.regulations.gov without change. All Personal Identifying Information (e.g., name, address) voluntarily submitted by the commenter may be publicly accessible. Do not submit Confidential Business Information or otherwise sensitive or protected information. NMFS will accept anonymous comments (enter ‘‘N/A’’ in the required fields, if you wish to remain anonymous). Attachments to electronic comments will be accepted in Microsoft Word, Excel, WordPerfect, or Adobe portable document file (pdf) formats only. FOR FURTHER INFORMATION CONTACT: Mary Furuness, 907–586–7228. SUPPLEMENTARY INFORMATION: Correction The final rule, identified as FR Doc. E8–31224 that published in the Federal Register on January 2, 2009 (74 FR 38) is corrected by fixing three typographical errors as follows. 1. On page 38, in the second column, the second paragraph under the DATES caption is corrected to read: ‘‘Comments must be received at the following address no later than 4:30 p.m., A.l.t., January 13, 2009.’’ 2. On page 39, column 2, in the last line the date ‘‘December 19, 2007’’ is corrected to read ‘‘December 19, 2008’’. 3. On page 40, in the first column, line 2, the date ‘‘January 13, 2008’’ is corrected to read ‘‘January 13, 2009’’. Classification This action corrects three typographical errors and does not otherwise change the requirements in the January 2, 2009 (74 FR 38) temporary rule. This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is E:\FR\FM\09JAR1.SGM 09JAR1

Agencies

[Federal Register Volume 74, Number 6 (Friday, January 9, 2009)]
[Rules and Regulations]
[Pages 864-866]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-215]


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GENERAL SERVICES ADMINISTRATION

48 CFR Parts 543 and 552

[GSAR Amendment 2005-04; GSAR Case 2008-G513 (Change 25); Docket 2009-
0012; Sequence 2]
RIN 3090-AI83


General Services Administration Acquisition Regulation; GSAR Case 
2008-G513; Rewrite of GSAR Part 543, Contract Modifications

AGENCIES: General Services Administration (GSA), Office of the Chief 
Acquisition Officer.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The General Services Administration (GSA) is amending the GSA 
Acquisition Regulation (GSAR) to revise the language that provides 
requirements for contract modifications.

DATES: Effective Date: January 9, 2009.

FOR FURTHER INFORMATION CONTACT: Ms. Jeritta Parnell at (202) 501-4082, 
for clarification of content. For information pertaining to the status 
or publication schedules, contact the Regulatory Secretariat (VPR), 
Room 4041, GS Building, Washington, DC 20405, (202) 501-4755. Please 
cite Amendment 2005-04, GSAR case 2008-G513 (Change 25).

SUPPLEMENTARY INFORMATION:

A. Background

    The GSA is amending the GSAR to revise GSAR 543.205, Contract 
clauses, and associated clauses in GSAR 552.243. The information in 
GSAR 543.205, Contract clauses, is revised to remove 543.205(a)(1) and 
543.205(b) and be re-numbered accordingly. The information in 
543.205(a)(1) is deleted. This clause prescription is no longer 
necessary. The information in 543.205(b) is relocated to part 538. The 
prescription for the clause at 552.243-71, Equitable Adjustment, is 
revised to include the clause title for FAR 52.243-4, Changes. The 
clause at 552.243-70, Pricing of Adjustments, is deleted. Information 
formerly contained in this clause is now contained in the revised 
clause at 552.243-71, Equitable Adjustments. The clause at 552.243-71, 
Equitable Adjustments, is revised to clarify costs, overhead, profit, 
and proposal preparation costs. The clause at 552.243-72, 
Modifications, (Multiple Award Schedule) is relocated to GSAR part 538.
    The GSA published a proposed rule with request for comments in the 
Federal Register at 73 FR 35614 on June 24, 2008. There were four 
public comments from two respondents. One respondent recommended adding 
the phrase ``impacted by the change'' to paragraph (e) of the clause at 
552.243-71 to limit the equitable adjustment to only the work impacted 
by the change. The GSA agrees and the language was revised to include 
this recommendation. The second respondent made three suggestions 
regarding internal GSA procedures. These suggestions are outside the 
scope of the GSAR case as published. Additional editorial corrections 
were made in paragraphs (b), (d), and (j)(2)of the clause at 552.243-
71.
    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. Regulatory Flexibility Act

    The General Services Administration certifies that this final rule 
will not have a significant economic impact on a substantial number of 
small entities within the meaning of the Regulatory Flexibility Act, 5 
U.S.C. 601, et seq., because the rule updates, clarifies, and 
reorganizes existing language.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the GSAR do not impose recordkeeping or information collection 
requirements, or otherwise collect information from offerors, 
contractors, or members of the public that require approval of the 
Office of Management and Budget under 44 U.S.C.3501, et seq.

List of Subjects in 48 CFR Parts 543 and 552

    Government procurement.

    Dated: December 8, 2008.
David A. Drabkin,
Senior Procurement Executive, Office of the Chief Acquisition Officer, 
General Services Administration.

0
Therefore, GSA amends 48 CFR parts 543 and 552 as set forth below:
0
1. The authority citation for 48 CFR parts 543 and 552 continues to 
read as follows:

    Authority: 40 U.S.C. 121(c).

PART 543--CONTRACT MODIFICATONS

0
2. Revise section 543.205 to read as follows:


543.205  Contract clauses.

    The contracting officer shall insert 552.243-71, Equitable 
Adjustments, in solicitations and contracts containing FAR 52.243-4, 
Changes.

PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


552.243-70  [Removed]

0
3. Remove section 552.243-70.

0
4. Revise section 552.243-71 to read as follows:


552.243-71  Equitable Adjustments.

    As prescribed in 543.205, insert the following clause:
Equitable Adjustments
(JAN 2009)
    (a) This clause governs the determination of equitable adjustments 
to which the Contractor may be entitled under the ``Changes'' clause 
prescribed by FAR 52.243-4, the ``Differing Site Conditions'' clause 
prescribed by FAR 52.236-2, and any other provision of this contract 
allowing entitlement to an equitable adjustment. This clause does not 
govern determination of the Contractor's relief allowable under the 
``Suspension of Work'' clause prescribed by FAR 52.242-14.
    (b) At the written request of the Contracting Officer, the 
Contractor shall submit a proposal, in accordance with the requirements 
set forth herein, for an equitable adjustment to the contract for 
changes or other conditions that may entitle a Contractor to an 
equitable adjustment. If the Contractor deems an oral or written order 
to be a change to the contract, it shall promptly submit to the 
Contracting Officer a proposal for equitable adjustment attributable to 
such deemed change. The proposal shall also conform to the requirements 
set forth herein.
    (c) The proposal shall be submitted within the time specified in 
the ``Changes'' clause, or such other time as may reasonably be 
required by the Contracting Officer. In the case of a proposal 
submitted based on the ``Differing Site Conditions'' clause, the notice 
requirement of that clause shall be met.
    (d) Proposals for equitable adjustments, including no cost requests 
for adjustment of the contract's required

[[Page 865]]

completion date, shall include a detailed breakdown of the following 
elements, as applicable:
    (1) Direct Costs.
    (2) Markups.
    (3) Change to the time for completion specified in the contract.
    (e) Direct Costs. The Contractor shall separately identify each 
item of deleted and added work associated with the change or other 
condition giving rise to entitlement to an equitable adjustment, 
including increases or decreases to unchanged work impacted by the 
change. For each item of work so identified, the Contractor shall 
propose for itself and, if applicable, its first two tiers of 
subcontractors, the following direct costs:
    (1) Material cost broken down by trade, supplier, material 
description, quantity of material units, and unit cost (including all 
manufacturing burden associated with material fabrication and cost of 
delivery to site, unless separately itemized);
    (2) Labor cost broken down by trade, employer, occupation, quantity 
of labor hours, and burdened hourly labor rate, together with 
itemization of applied labor burdens (exclusive of employer's overhead, 
profit, and any labor cost burdens carried in employer's overhead 
rate);
    (3) Cost of equipment required to perform the work, identified with 
material to be placed or operation to be performed;
    (4) Cost of preparation and/or revision to shop drawings and other 
submittals with detail set forth in paragraphs (e)(1) and (e)(2) of 
this clause;
    (5) Delivery costs, if not included in material unit costs;
    (6) Time-related costs not separately identified as direct costs, 
and not included in the Contractor's or subcontractors' overhead rates, 
as specified in paragraph (g) of this clause; and
    (7) Other direct costs.
    (f) Marked-up costs of subcontractors below the second tier may be 
treated as other direct costs of a second tier subcontractor, unless 
the Contracting Officer requires a detailed breakdown under paragraph 
(i) of this clause.
    (g) Extensions of Time and Time-Related Costs. The Contractor shall 
propose a daily rate for each firm's time-related costs during the 
affected period, and, for each firm, the increase or decrease in the 
number of work days of performance attributable to the change or other 
condition giving rise to entitlement to an equitable adjustment, with 
supporting analysis. Entitlement to time and time-related costs shall 
be determined as follows:
    (1) Increases or decreases to a firm's time-related costs shall be 
allowed only if such increase or decrease necessarily and exclusively 
results from the change or other condition giving rise to entitlement 
to an equitable adjustment.
    (2) The Contractor shall not be entitled to an extension of time or 
recovery of its own time-related costs except to the extent that such 
change or other condition necessarily and exclusively causes its 
duration of performance to extend beyond the completion date specified 
in the contract.
    (3) Costs may be characterized as time-related costs only if they 
are incurred solely to support performance of this contract and the 
increase or decrease in such costs is solely dependent upon the 
duration of a firm's performance of work.
    (4) Costs may not be characterized as time-related costs if they 
are included in the calculation of a firm's overhead rate.
    (5) Equitable adjustment of time and time-related costs shall not 
be allowed unless the analysis supporting the proposal complies with 
provisions specified elsewhere in this contract regarding the 
Contractor's project schedule.
    (h) Markups. For each firm whose direct costs are separately 
identified in the proposal, the Contractor shall propose an overhead 
rate, profit rate, and where applicable, a bond rate and insurance 
rate. Markups shall be determined and applied as follows:
    (1) Overhead rates shall be negotiated, and may be subject to audit 
and adjustment.
    (2) Profit rates shall be negotiated, but shall not exceed ten 
percent, unless entitlement to a higher rate of profit may be 
demonstrated.
    (3) The Contractor and its subcontractor[s] shall not be allowed 
overhead or profit on the overhead or profit received by a 
subcontractor, except to the extent that the subcontractor's costs are 
properly included in other direct costs as specified in paragraph (f) 
of this clause.
    (4) Overhead rates shall be applied to the direct costs of work 
performed by a firm, and shall not be allowed on the direct costs of 
work performed by a subcontractor to that firm at any tier except as 
set forth below in paragraphs (h)(6) and (h)(7) of this clause.
    (5) Profit rates shall be applied to the sum of a firm's direct 
costs and the overhead allowed on the direct costs of work performed by 
that firm.
    (6) Overhead and profit shall be allowed on the direct costs of 
work performed by a subcontractor within two tiers of a firm at rates 
equal to only fifty percent of the overhead and profit rates negotiated 
pursuant to paragraphs (h)(1) and (h)(2) of this clause for that firm, 
but not in excess of ten percent when combined.
    (7) Overhead and profit shall not be allowed on the direct costs of 
a subcontractor more than two tiers below the firm claiming overhead 
and profit for subcontractor direct costs.
    (8) If changes to a Contractor's or subcontractor's bond or 
insurance premiums are computed as a percentage of the gross change in 
contract value, markups for bond and insurance shall be applied after 
all overhead and profit is applied. Bond and insurance rates shall not 
be applied if the associated costs are included in the calculation of a 
firm's overhead rate.
    (9) No markup shall be applied to a firm's costs other than those 
specified herein.
    (i) At the request of the Contracting Officer, the Contractor shall 
provide such other information as may be reasonably necessary to allow 
evaluation of the proposal. If the proposal includes significant costs 
incurred by a subcontractor below the second tier, the Contracting 
Officer may require the same detail for those costs as required for the 
first two tiers of subcontractors, and markups shall be applied to 
these subcontractor costs in accordance with paragraph (h).
    (j) Proposal Preparation Costs. If performed by the firm claiming 
them, proposal preparations costs shall be included in the labor hours 
proposed as direct costs. If performed by an outside consultant or law 
firm, proposal preparation costs shall be treated as other direct costs 
to the firm incurring them. Requests for proposal preparation costs 
shall include the following:
    (1) A copy of the contract or other documentation identifying the 
consultant or firm, the scope of the services performed, the manner in 
which the consultant or firm was to be compensated, and if compensation 
was paid on an hourly basis, the fully burdened and marked-up hourly 
rates for the services provided.
    (2) If compensation was paid on an hourly basis, documentation of 
the quantity of hours worked, including descriptions of the activities 
for which the hours were billed, and applicable rates.
    (3) Written proof of payment of the costs requested. The 
sufficiency of the proof shall be determined by the Contracting 
Officer.
    (k) Proposal preparation costs shall be allowed only if--
    (1) The nature and complexity of the change or other condition 
giving rise to

[[Page 866]]

entitlement to an equitable adjustment warrants estimating, scheduling, 
or other effort not reasonably foreseeable at the time of contract 
award;
    (2) Proposed costs are not included in a firm's time-related costs 
or overhead rate; and
    (3) Proposed costs were incurred prior to a Contracting Officer's 
unilateral determination of an equitable adjustment under the 
conditions set forth in paragraph (o), or were incurred prior to the 
time the request for equitable adjustment otherwise became a matter in 
dispute.
    (l) Proposed direct costs, markups, and proposal preparation costs 
shall be allowable in the determination of an equitable adjustment only 
if they are reasonable and otherwise consistent with the contract cost 
principles and procedures set forth in part 31 of the Federal 
Acquisition Regulation (48 CFR part 31) in effect on the date of this 
contract. Characterization of costs as direct costs, time-related 
costs, or overhead costs must be consistent with the requesting firm's 
accounting practices on other work under this contract and other 
contracts.
    (m) If the Contracting Officer determines that it is in the 
Government's interest that the Contractor proceed with a change before 
negotiation of an equitable adjustment is completed, the Contracting 
Officer may order the Contractor to proceed on the basis of a 
unilateral modification to the contract increasing or decreasing the 
contract price by an amount to be determined later. Such increase or 
decrease shall not exceed the increase or decrease proposed by the 
Contractor.
    (n) If the parties cannot agree to an equitable adjustment, the 
Contracting Officer may determine the equitable adjustment 
unilaterally.
    (o) The Contractor shall not be entitled to any proposal 
preparation costs incurred subsequent to the date of a unilateral 
determination or denial of the request if the Contracting Officer 
issues a unilateral determination or denial under any of the following 
circumstances:
    (1) The Contractor fails to submit a proposal within the time 
required by this contract or such time as may reasonably be required by 
the Contracting Officer.
    (2) The Contractor fails to submit additional information requested 
by the Contracting Officer within the time reasonably required.
    (3) Agreement to an equitable adjustment cannot be reached within 
60 days of submission of the Contractor's proposal or receipt of 
additional requested information, despite the Contracting Officer's 
diligent efforts to negotiate the equitable adjustment.
(End of clause)


552.243-72  [Removed]

0
5. Remove section 552.243-72.

[FR Doc. E9-215 Filed 1-8-09; 8:45 am]
BILLING CODE 6820-61-P
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