Cost Accounting Standards: Change to the CAS Applicability Threshold for the Inflation Adjustment to the Truth in Negotiations Act Threshold, 40817-40820 [2011-16846]
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Federal Register / Vol. 76, No. 133 / Tuesday, July 12, 2011 / Rules and Regulations
(Catalog of Federal Domestic Assistance No.
97.022, ‘‘Flood Insurance.’’)
Dated: June 15, 2011
Sandra K. Knight,
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Homeland Security, Federal Emergency
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[FR Doc. 2011–17451 Filed 7–11–11; 8:45 am]
BILLING CODE 9110–12–P
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[FR Doc. 2011–17369 Filed 7–11–11; 8:45 am]
BILLING CODE 6712–01–P
OFFICE OF MANAGEMENT AND
BUDGET
Office of Federal Procurement Policy
48 CFR Parts 9901 and 9903
Cost Accounting Standards: Change to
the CAS Applicability Threshold for the
Inflation Adjustment to the Truth in
Negotiations Act Threshold
Cost Accounting Standards
Board, Office of Federal Procurement
Policy, Office of Management and
Budget (OMB).
ACTION: Interim rule.
AGENCY:
The Office of Federal
Procurement Policy (OFPP), Cost
Accounting Standards (CAS) Board
(Board), invites public comments
concerning this interim rule revising the
threshold for the application of CAS
from ‘‘$650,000’’ to ‘‘the Truth in
Negotiations Act (TINA) threshold, as
adjusted for inflation.’’ The change is
being made because the CAS
applicability threshold is statutorily tied
to TINA. The TINA threshold for
obtaining cost or pricing data was
recently adjusted for inflation to
$700,000 in the Federal Acquisition
Regulation (FAR), as required by the
Ronald W. Reagan National Defense
Authorization Act for Fiscal Year 2005.
SUMMARY:
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40817
Until this interim change, the CAS
applicability threshold was a stated
dollar amount ($650,000) in the Code of
Federal Regulations. This wording
change will effectively revise the CAS
threshold to $700,000 and cause future
changes to the CAS applicability
threshold to self-execute upon any
changes to the TINA threshold as they
are implemented in the FAR.
DATES: Effective date: August 11, 2011.
Comment date: Comments must be in
writing and must be received by
September 12, 2011.
ADDRESSES: All comments to this
interim rule must be in writing.
Electronic comments may be submitted
in any one of three ways:
1. Federal eRulemaking Portal:
Comments may be directly sent via
https://www.regulations.gov—a Federal
E-Government Web site that allows the
public to find, review, and submit
comments on documents that agencies
have published in the Federal Register
and that are open for comment. Simply
type ‘‘CAS–TINA Threshold’’ (without
quotation marks) in the Comment or
Submission search box, click Go, and
follow the instructions for submitting
comments;
2. E-mail: Comments may be included
in an e-mail message sent to
casb2@omb.eop.gov. The comments
may be submitted in the text of the email message or as an attachment;
3. Facsimile: Comments may also be
submitted via facsimile to (202) 395–
5105; or
4. Mail: If you choose to submit your
responses via regular mail, please mail
them to: Office of Federal Procurement
Policy, 725 17th Street, NW., Room
9013, Washington, DC 20503, ATTN:
Raymond J. M. Wong. Due to delays
caused by the screening and processing
of mail, respondents are strongly
encouraged to submit responses
electronically.
Be sure to include your name, title,
organization, postal address, telephone
number, and e-mail address in the text
of your public comment and reference
‘‘CAS–TINA Threshold’’ in the subject
line irrespective of how you submit
your comments. Comments received by
the date specified above will be
included as part of the official record.
Comments delayed due to use of regular
mail may not be considered.
Please note that all public comments
received will be available in their
entirety at https://www.whitehouse.gov/
omb/casb_index_public_comments/ and
https://www.regulations.gov after the
close of the comment period. Do not
include any information whose
disclosure you would object to.
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Federal Register / Vol. 76, No. 133 / Tuesday, July 12, 2011 / Rules and Regulations
FOR FURTHER INFORMATION CONTACT:
Raymond J. M. Wong, Director, Cost
Accounting Standards Board (telephone:
202–395–6805; e-mail:
Raymond_wong@omb.eop.gov).
SUPPLEMENTARY INFORMATION:
A. Regulatory Process
Rules, Regulations and Standards
issued by the Cost Accounting
Standards Board (Board) are codified at
48 CFR chapter 99. The Office of
Federal Procurement Policy (OFPP) Act,
at 41 U.S.C. 1502(c) [formerly, 41 U.S.C.
422(g)], requires that the Board, prior to
the establishment of any new or revised
Cost Accounting Standard (CAS or
Standard), complete a prescribed
rulemaking process. The process
generally consists of the following four
steps:
1. Consult with interested persons
concerning the advantages,
disadvantages and improvements
anticipated in the pricing and
administration of Government contracts
as a result of the adoption of a proposed
Standard.
2. Promulgate an Advance Notice of
Proposed Rulemaking (ANPRM).
3. Promulgate a Notice of Proposed
Rulemaking (NPRM).
4. Promulgate a Final Rule.
The Board notes that the CAS
applicability threshold in 48 CFR
Chapter 99 (at 48 CFR 9901.306;
9903.201–1, .201–2, 201–3, and 201–4;
and 9903.202–1) is not subject to the
four-step process required by 41 U.S.C.
1502(c) [formerly, 41 U.S.C. 422(g)(1)]
because it is not a Cost Accounting
Standard. However, the Board elects to
follow some of those requirements in
the OFPP Act, at 41 U.S.C. 1502(c)
[formerly, 41 U.S.C. 422(g)(1)], i.e., to
consult with interested persons
concerning the advantages,
disadvantages, and improvements
anticipated in the pricing and
administration of Government contracts
as a result of the adoption of any new
or revised rule on the CAS applicability
threshold, prior to its promulgation.
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B. Background and Summary
The Office of Federal Procurement
Policy (OFPP), Cost Accounting
Standards Board (Board), is today
releasing this interim rule to revise the
Cost Accounting Standards (CAS)
applicability threshold in 48 CFR
chapter 99 from ‘‘$650,000’’ to ‘‘the
Truth in Negotiations Act (TINA)
threshold, as adjusted for inflation
(41 U.S.C. 1908) and (41 U.S.C.
1502(b)(1)(B))’’, because of a revision to
the Truth in Negotiations Act (TINA)
threshold for the submission of cost or
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pricing data as adjusted for inflation by
section 807 of the Ronald W. Reagan
National Defense Authorization Act for
Fiscal Year 2005 (Pub. L. 108–375) as
incorporated into Federal Acquisition
Regulation (FAR) 15.403–4(a)(1) by the
Civilian Agency Acquisition Council
and the Defense Acquisition Regulations
Council on August 30, 2010 (at 75 FR
53129). By revising the CAS
applicability threshold so that it directly
references the FAR TINA threshold for
the submission of cost or pricing data
(rather than referencing a stated dollar
amount), any future changes to the FAR
TINA threshold will automatically
apply to the CAS applicability threshold
(thereby eliminating the need to revise
this regulation to specify a different
dollar amount).
Statutory Requirement for Inflation
Adjustment of TINA Thresholds
Section 807 of the Ronald W. Reagan
National Defense Authorization Act for
Fiscal Year 2005 (Pub. L. 108–375)
requires a periodic adjustment for
inflation every five years to the
acquisition related thresholds using the
Consumer Price Index (CPI) for all urban
consumers, except for the Davis-Bacon
Act, Service Contract Act, and trade
agreement thresholds. The threshold in
TINA (10 U.S.C. 2306a(a)(1)(A)(i)) for
the submission of cost or pricing data is
one of the acquisition related thresholds
adjusted for inflation by section 807.
The Civilian Agency Acquisition
Council and the Defense Acquisition
Regulations Council (Councils)
published a final rule in the Federal
Register on August 30, 2010 (75 FR
53129) amending the FAR to implement
section 807, including the TINA
threshold at FAR 15.403–4, Requiring
cost or pricing data (10 U.S.C. 2306a
and 41 U.S.C. 3502 [formerly, 41 U.S.C.
254b]). This FAR final rule was effective
October 1, 2010, and revised the TINA
threshold from $650,000 to $700,000.
Statutory Requirement for Threshold for
CAS Applicability
Section 26(f)(2(A) of the OFPP Act (41
U.S.C. 1502(b)(1)(B) [formerly, 41 U.S.C.
422(f)(2)(A)]) addresses the CAS
applicability threshold. Section 822 of
the 2006 National Defense
Authorization Act (Pub. L. 109–163)
amended 41 U.S.C. 1502(b)(1)(B)
[formerly, 41 U.S.C. 422(f)(2)(A)] to tie
the statutory CAS threshold to the
threshold for compliance with the TINA
requirement to submit cost or pricing
data, as set forth in section
2306a(a)(1)(A)(i) of title 10, United
States Code. The recent changes to the
TINA threshold described above require
identical changes to the CAS
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applicability threshold (i.e., from
$650,000 to $700,000). To date, the CAS
applicability threshold has been
identified in the CAS Board rules as a
stated dollar amount. To avoid repeated
rulemakings in the future that would
update the stated dollar amount, in
order to keep the CAS applicability
threshold tied to the TINA threshold,
the Board is revising the CAS
applicability threshold from a stated
dollar amount (which has been
‘‘$650,000’’) to ‘‘the Truth in
Negotiations Act (TINA) threshold, as
adjusted for inflation (41 U.S.C. 1908
and 41 U.S.C. 1502(b)(1)(B)).’’ This
revision makes any future changes to
the CAS applicability threshold selfexecuting upon any changes that the
FAR makes to the TINA threshold.
Thus, because the FAR’s TINA
threshold is now $700,000, the CAS
applicability threshold under this
interim rule will be $700,000.
C. Paperwork Reduction Act
The Paperwork Reduction Act
(44 U.S.C. chapter 35, Subtitle I) does
not apply to this rulemaking because
this rule imposes no additional
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. The records required by
this interim rule are those normally
maintained by contractors and
subcontractors who claim
reimbursement of costs under
government contracts.
D. Executive Order 12866, the
Congressional Review Act, and the
Regulatory Flexibility Act
Because the affected contractors and
subcontractors are those who are
already subject to CAS but for the
increase in the CAS applicability
threshold, the economic impact of this
interim rule on contractors and
subcontractors is expected to be minor.
As a result, the Board has determined
that this interim rule will not result in
the promulgation of an ‘‘economically
significant rule’’ under the provisions of
Executive Order 12866, and that a
regulatory impact analysis will not be
required. For the same reason, the
Administrator of the Office of
Information and Regulatory Affairs has
determined that this interim rule is not
a ‘‘major rule’’ under the Congressional
Review Act, 5 U.S.C. Chapter 8. Finally,
this interim rule does not have a
significant effect on a substantial
number of small entities because small
businesses are exempt from the
application of the Cost Accounting
Standards. Therefore, this interim rule
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Federal Register / Vol. 76, No. 133 / Tuesday, July 12, 2011 / Rules and Regulations
does not require a regulatory flexibility
analysis under the Regulatory
Flexibility Act of 1980, 5 U.S.C. chapter
6.
E. Public Comments to This Interim
Rulemaking
Interested persons are invited to
provide input to this interim rule to
revise the CAS applicability threshold
from ‘‘$650,000’’ to ‘‘the Truth in
Negotiations Act (TINA) threshold, as
adjusted for inflation (41 U.S.C. 1908
and 41 U.S.C. 1502(b)(1)(B))’’ as a result
of the periodic statutory adjustment of
the TINA threshold for inflation.
Respondents are encouraged to identify,
comment and provide information on
any issues that they believe are
important to the subject. All comments
must be in writing, and submitted via
facsimile, by e-mail, or by any other
means as instructed in the ADDRESSES
section.
List of Subjects in 48 CFR Parts 9901
and 9903
Government procurement, cost
accounting standards.
PART 9901—RULES AND
PROCEDURES
1. The authority citation for Part 9901
continues to read as follows:
■
Authority: Pub. L. 111–350, 124 Stat. 3677,
41 U.S.C. 1502.
2. Revise section 9901.306 to read as
follows:
■
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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 the Truth in
Negotiations Act (TINA) threshold, as
adjusted for inflation (41 U.S.C. 1908
and 41 U.S.C. 1502(b)(1)(B)), 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:
■
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the provision date and paragraph (a) of
Part I of the provision to read as follows:
Subpart 9903.2—CAS Program
Requirements
9903.201–3
4. Section 9903.201–1 is amended by
revising paragraph (b)(2) to read as
follows:
Cost Accounting Standards Notices and
Certification (JUL 2011)
9903.201–1
I. Disclosure Statement—Cost
Accounting Practices and Certification
(a) Any contract in excess of the Truth
in Negotiations Act (TINA) threshold, as
adjusted for inflation (41 U.S.C. 1908
and 41 U.S.C. 1502(b)(1)(B)), resulting
from this solicitation, except for those
contracts which are exempt as specified
in 9903.201–1.
*
*
*
*
*
■ 7. Section 9903.201–4 is amended:
■ a. In paragraph (a)(2) under the clause
heading, ‘‘Cost Accounting Standards’’,
by revising the clause date and
paragraph (d) of the clause.
■ b. By revising paragraph (c)(1); and in
paragraph (c)(2) under the clause
heading ‘‘Disclosure and Consistency of
Cost Accounting Practices’’, by revising
the clause date and paragraph (d)(2) of
the clause.
■ c. In paragraph (e)(2) under the clause
heading, ‘‘Cost Accounting Standards—
Educational Institutions’’, by revising
the clause date and paragraph (d)(2) of
the clause; and in paragraph (f)(2) under
the clause heading, ‘‘Cost Accounting
Practices—Foreign Concerns’’, by
revising the clause date and paragraph
(d)(2) of the clause .
■
CAS applicability.
*
*
*
*
*
(b) * * *
(2) Negotiated contracts and
subcontracts not in excess of the Truth
in Negotiations Act (TINA) threshold, as
adjusted for inflation (41 U.S.C. 1908
and 41 U.S.C. 1502(b)(1)(B)). For
purposes of this paragraph (b)(2), an
order issued by one segment to another
segment shall be treated as a
subcontract.
*
*
*
*
*
■ 5. Section 9903.201–2 is amended by
revising paragraphs (c)(3) and (5) to read
as follows:
Types of CAS coverage.
*
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:
9901.306
Authority: Pub. L. 111–350, 124 Stat. 3677,
41 U.S.C. 1502.
9903.201–2
Daniel I. Gordon,
Chair, Cost Accounting Standards Boards.
40819
*
*
*
*
(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 the
Truth in Negotiations Act (TINA)
threshold, as adjusted for inflation (41
U.S.C. 1908 and 41 U.S.C.
1502(b)(1)(B)), 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 the Truth in Negotiations Act
(TINA) threshold, as adjusted for
inflation (41 U.S.C. 1908 and 41 U.S.C.
1502(b)(1)(B)). For CAS-covered
contracts awarded to an FFRDC
operated by an educational institution,
however, the full or modified CAS
contract clause specified at 9903.201–
4(a) or (c), as applicable, shall be
incorporated.
*
*
*
*
*
■ 6. Section 9903.201–3 is amended in
paragraph (a)(2) under the provision
heading, ‘‘Cost Accounting Standards
Notices and Certification’’, by revising
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Solicitation provisions.
*
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9903.201–4
*
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*
Contract clauses.
(a) * * *
(2) * * *
Cost Accounting Standards (JUL 2011)
*
*
*
*
*
(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 the Truth in Negotiations Act
(TINA) threshold, as adjusted for inflation
(41 U.S.C. 1908 and 41 U.S.C. 1502(b)(1)(B)),
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.
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(End of clause)
*
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*
(c) Disclosure and Consistency of Cost
Accounting Practices. (1) The
contracting officer shall insert the clause
set forth below, Disclosure and
Consistency of Cost Accounting
Practices, in negotiated contracts when
the contract amount is over the Truth in
Negotiations Act (TINA) threshold, as
adjusted for inflation (41 U.S.C. 1908
and 41 U.S.C. 1502(b)(1)(B)), 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) * * *
Disclosure and Consistency of Cost
Accounting Practices (JUL 2011)
*
*
*
*
*
(d) * * *
(2) This requirement shall apply only to
negotiated subcontracts in excess of the
Truth in Negotiations Act (TINA) threshold,
as adjusted for inflation (41 U.S.C. 1908 and
41 U.S.C. 1502(b)(1)(B)).
*
*
*
*
(End of clause)
*
*
*
*
(e) * * *
(2) * * *
*
*
Cost Accounting Standards—Education
Institutions (JUL 2011)
*
*
*
*
*
(d) * * *
(2) This requirement shall apply only to
negotiated subcontracts in excess of the
Truth in Negotiations Act (TINA) threshold,
as adjusted for inflation (41 U.S.C. 1908 and
41 U.S.C 1502(b)(1)B)).
*
*
*
*
(End of clause)
(f) * * *
(2) * * *
*
Disclosure and Consistency of Cost
Accounting Practices—Foreign
Concerns (JUL 2011)
*
*
*
*
*
(d) * * *
(2) This requirement shall apply only to
negotiated subcontracts in excess of the
Truth in Negotiations Act (TINA) threshold,
as adjusted for inflation (41 U.S.C. 1908 and
41 U.S.C. 1502(b)(1)(B)).
*
*
*
*
(End of clause)
*
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*
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*
8. Section 9903.202–1 is amended by
revising paragraphs (c) introductory
text, (f)(2)(i), and (f)(3)(i) through (iii) to
read as follows:
■
§ 9903.202–1
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(c) When a Disclosure Statement is
required, a separate Disclosure
Statement must be submitted for each
segment whose costs included in the
total price of any CAS-covered contract
or subcontract exceed the Truth in
Negotiations Act (TINA) threshold, as
adjusted for inflation (41 U.S.C. 1908
and 41 U.S.C. 1502(b)(1)(B)) 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 the Truth in
Negotiations Act (TINA) threshold, as
adjusted for inflation (41 U.S.C. 1908
and 41 U.S.C. 1502(b)(1)(B)), 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. A Disclosure Statement is not
required; however, if the listed entity
can demonstrate that the net amount of
Federal contract and financial assistance
awards received during its immediately
preceding cost accounting period was
less than $25 million.
*
*
*
*
*
(3) * * *
(i) For business units that are selected
to receive a CAS-covered contract or
subcontract in excess of the Truth in
Negotiations Act (TINA) threshold, as
adjusted for inflation (41 U.S.C. 1908
and 41 U.S.C. 1502(b)(1)(B)), 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 the
Truth in Negotiations Act (TINA)
threshold, as adjusted for inflation (41
U.S.C. 1908 and 41 U.S.C.
1502(b)(1)(B)), 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 the
Truth in Negotiations Act (TINA)
threshold, as adjusted for inflation (41
U.S.C. 1908 and 41 U.S.C.
1502(b)(1)(B)), 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
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Circular A–21, Disclosure Statements
shall be submitted during the six month
period ending eighteen months after the
date of contract award.
*
*
*
*
*
[FR Doc. 2011–16846 Filed 7–11–11; 8:45 am]
BILLING CODE P
DEPARTMENT OF TRANSPORTATION
Pipeline and Hazardous Materials
Safety Administration
49 CFR Part 190
[Docket No. PHMSA–2011–0161]
Pipeline Safety; Enforcement
Proceedings Involving an Informal
Hearing
Pipeline and Hazardous
Materials Safety Administration
(PHMSA); DOT.
ACTION: General policy statement;
informal hearing process.
AGENCY:
PHMSA is issuing this
document to notify operators of natural
gas and hazardous liquid pipeline
facilities of the creation of a dedicated
‘‘Presiding Official’’ for informal
pipeline enforcement hearings and the
process operators can expect when
requesting an informal hearing.
Hearings in pipeline safety enforcement
cases are conducted by a hearing officer
in accordance with certain procedures
designed to ensure a fair and impartial
decision on the merits. This document
explains those procedures and includes
a description of the dedicated hearing
officer’s roles and responsibilities, the
process for requesting a hearing, and the
manner in which a case will proceed
once a hearing has been requested.
FOR FURTHER INFORMATION CONTACT:
Sherri Pappas, Deputy Chief Counsel, at
202–366–4400. Information about
PHMSA may be found at https://
phmsa.dot.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
The Federal safety statute and
regulations for natural gas and
hazardous liquid pipeline facilities
provide a description of the
enforcement authority and sanctions
exercised by the Associate
Administrator for achieving and
maintaining pipeline safety. Pursuant to
chapter 601 of Title 49, United States
Code, after notice and an opportunity
for a hearing, the Associate
Administrator may order an operator of
a pipeline facility to take necessary
corrective action, including revisions to
E:\FR\FM\12JYR1.SGM
12JYR1
]]>Agencies
[Federal Register Volume 76, Number 133 (Tuesday, July 12, 2011)]
[Rules and Regulations]
[Pages 40817-40820]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-16846]
=======================================================================
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OFFICE OF MANAGEMENT AND BUDGET
Office of Federal Procurement Policy
48 CFR Parts 9901 and 9903
Cost Accounting Standards: Change to the CAS Applicability
Threshold for the Inflation Adjustment to the Truth in Negotiations Act
Threshold
AGENCY: Cost Accounting Standards Board, Office of Federal Procurement
Policy, Office of Management and Budget (OMB).
ACTION: Interim rule.
-----------------------------------------------------------------------
SUMMARY: The Office of Federal Procurement Policy (OFPP), Cost
Accounting Standards (CAS) Board (Board), invites public comments
concerning this interim rule revising the threshold for the application
of CAS from ``$650,000'' to ``the Truth in Negotiations Act (TINA)
threshold, as adjusted for inflation.'' The change is being made
because the CAS applicability threshold is statutorily tied to TINA.
The TINA threshold for obtaining cost or pricing data was recently
adjusted for inflation to $700,000 in the Federal Acquisition
Regulation (FAR), as required by the Ronald W. Reagan National Defense
Authorization Act for Fiscal Year 2005. Until this interim change, the
CAS applicability threshold was a stated dollar amount ($650,000) in
the Code of Federal Regulations. This wording change will effectively
revise the CAS threshold to $700,000 and cause future changes to the
CAS applicability threshold to self-execute upon any changes to the
TINA threshold as they are implemented in the FAR.
DATES: Effective date: August 11, 2011.
Comment date: Comments must be in writing and must be received by
September 12, 2011.
ADDRESSES: All comments to this interim rule must be in writing.
Electronic comments may be submitted in any one of three ways:
1. Federal eRulemaking Portal: Comments may be directly sent via
https://www.regulations.gov--a Federal E-Government Web site that allows
the public to find, review, and submit comments on documents that
agencies have published in the Federal Register and that are open for
comment. Simply type ``CAS-TINA Threshold'' (without quotation marks)
in the Comment or Submission search box, click Go, and follow the
instructions for submitting comments;
2. E-mail: Comments may be included in an e-mail message sent to
casb2@omb.eop.gov. The comments may be submitted in the text of the e-
mail message or as an attachment;
3. Facsimile: Comments may also be submitted via facsimile to (202)
395-5105; or
4. Mail: If you choose to submit your responses via regular mail,
please mail them to: Office of Federal Procurement Policy, 725 17th
Street, NW., Room 9013, Washington, DC 20503, ATTN: Raymond J. M. Wong.
Due to delays caused by the screening and processing of mail,
respondents are strongly encouraged to submit responses electronically.
Be sure to include your name, title, organization, postal address,
telephone number, and e-mail address in the text of your public comment
and reference ``CAS-TINA Threshold'' in the subject line irrespective
of how you submit your comments. Comments received by the date
specified above will be included as part of the official record.
Comments delayed due to use of regular mail may not be considered.
Please note that all public comments received will be available in
their entirety at https://www.whitehouse.gov/omb/casb_index_public_comments/ and https://www.regulations.gov after the close of the comment
period. Do not include any information whose disclosure you would
object to.
[[Page 40818]]
FOR FURTHER INFORMATION CONTACT: Raymond J. M. Wong, Director, Cost
Accounting Standards Board (telephone: 202-395-6805; e-mail: Raymond_wong@omb.eop.gov).
SUPPLEMENTARY INFORMATION:
A. Regulatory Process
Rules, Regulations and Standards issued by the Cost Accounting
Standards Board (Board) are codified at 48 CFR chapter 99. The Office
of Federal Procurement Policy (OFPP) Act, at 41 U.S.C. 1502(c)
[formerly, 41 U.S.C. 422(g)], requires that the Board, prior to the
establishment of any new or revised Cost Accounting Standard (CAS or
Standard), complete a prescribed rulemaking process. The process
generally consists of the following four steps:
1. Consult with interested persons concerning the advantages,
disadvantages and improvements anticipated in the pricing and
administration of Government contracts as a result of the adoption of a
proposed Standard.
2. Promulgate an Advance Notice of Proposed Rulemaking (ANPRM).
3. Promulgate a Notice of Proposed Rulemaking (NPRM).
4. Promulgate a Final Rule.
The Board notes that the CAS applicability threshold in 48 CFR
Chapter 99 (at 48 CFR 9901.306; 9903.201-1, .201-2, 201-3, and 201-4;
and 9903.202-1) is not subject to the four-step process required by 41
U.S.C. 1502(c) [formerly, 41 U.S.C. 422(g)(1)] because it is not a Cost
Accounting Standard. However, the Board elects to follow some of those
requirements in the OFPP Act, at 41 U.S.C. 1502(c) [formerly, 41 U.S.C.
422(g)(1)], i.e., to consult with interested persons concerning the
advantages, disadvantages, and improvements anticipated in the pricing
and administration of Government contracts as a result of the adoption
of any new or revised rule on the CAS applicability threshold, prior to
its promulgation.
B. Background and Summary
The Office of Federal Procurement Policy (OFPP), Cost Accounting
Standards Board (Board), is today releasing this interim rule to revise
the Cost Accounting Standards (CAS) applicability threshold in 48 CFR
chapter 99 from ``$650,000'' to ``the Truth in Negotiations Act (TINA)
threshold, as adjusted for inflation (41 U.S.C. 1908) and (41 U.S.C.
1502(b)(1)(B))'', because of a revision to the Truth in Negotiations
Act (TINA) threshold for the submission of cost or pricing data as
adjusted for inflation by section 807 of the Ronald W. Reagan National
Defense Authorization Act for Fiscal Year 2005 (Pub. L. 108-375) as
incorporated into Federal Acquisition Regulation (FAR) 15.403-4(a)(1)
by the Civilian Agency Acquisition Council and the Defense Acquisition
Regulations Council on August 30, 2010 (at 75 FR 53129). By revising
the CAS applicability threshold so that it directly references the FAR
TINA threshold for the submission of cost or pricing data (rather than
referencing a stated dollar amount), any future changes to the FAR TINA
threshold will automatically apply to the CAS applicability threshold
(thereby eliminating the need to revise this regulation to specify a
different dollar amount).
Statutory Requirement for Inflation Adjustment of TINA Thresholds
Section 807 of the Ronald W. Reagan National Defense Authorization
Act for Fiscal Year 2005 (Pub. L. 108-375) requires a periodic
adjustment for inflation every five years to the acquisition related
thresholds using the Consumer Price Index (CPI) for all urban
consumers, except for the Davis-Bacon Act, Service Contract Act, and
trade agreement thresholds. The threshold in TINA (10 U.S.C.
2306a(a)(1)(A)(i)) for the submission of cost or pricing data is one of
the acquisition related thresholds adjusted for inflation by section
807. The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) published a final rule in
the Federal Register on August 30, 2010 (75 FR 53129) amending the FAR
to implement section 807, including the TINA threshold at FAR 15.403-4,
Requiring cost or pricing data (10 U.S.C. 2306a and 41 U.S.C. 3502
[formerly, 41 U.S.C. 254b]). This FAR final rule was effective October
1, 2010, and revised the TINA threshold from $650,000 to $700,000.
Statutory Requirement for Threshold for CAS Applicability
Section 26(f)(2(A) of the OFPP Act (41 U.S.C. 1502(b)(1)(B)
[formerly, 41 U.S.C. 422(f)(2)(A)]) addresses the CAS applicability
threshold. Section 822 of the 2006 National Defense Authorization Act
(Pub. L. 109-163) amended 41 U.S.C. 1502(b)(1)(B) [formerly, 41 U.S.C.
422(f)(2)(A)] to tie the statutory CAS threshold to the threshold for
compliance with the TINA requirement to submit cost or pricing data, as
set forth in section 2306a(a)(1)(A)(i) of title 10, United States Code.
The recent changes to the TINA threshold described above require
identical changes to the CAS applicability threshold (i.e., from
$650,000 to $700,000). To date, the CAS applicability threshold has
been identified in the CAS Board rules as a stated dollar amount. To
avoid repeated rulemakings in the future that would update the stated
dollar amount, in order to keep the CAS applicability threshold tied to
the TINA threshold, the Board is revising the CAS applicability
threshold from a stated dollar amount (which has been ``$650,000'') to
``the Truth in Negotiations Act (TINA) threshold, as adjusted for
inflation (41 U.S.C. 1908 and 41 U.S.C. 1502(b)(1)(B)).'' This revision
makes any future changes to the CAS applicability threshold self-
executing upon any changes that the FAR makes to the TINA threshold.
Thus, because the FAR's TINA threshold is now $700,000, the CAS
applicability threshold under this interim rule will be $700,000.
C. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35, Subtitle I) does
not apply to this rulemaking because this rule imposes no additional
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. The records required by this interim rule are
those normally maintained by contractors and subcontractors who claim
reimbursement of costs under government contracts.
D. Executive Order 12866, the Congressional Review Act, and the
Regulatory Flexibility Act
Because the affected contractors and subcontractors are those who
are already subject to CAS but for the increase in the CAS
applicability threshold, the economic impact of this interim rule on
contractors and subcontractors is expected to be minor. As a result,
the Board has determined that this interim rule will not result in the
promulgation of an ``economically significant rule'' under the
provisions of Executive Order 12866, and that a regulatory impact
analysis will not be required. For the same reason, the Administrator
of the Office of Information and Regulatory Affairs has determined that
this interim rule is not a ``major rule'' under the Congressional
Review Act, 5 U.S.C. Chapter 8. Finally, this interim rule does not
have a significant effect on a substantial number of small entities
because small businesses are exempt from the application of the Cost
Accounting Standards. Therefore, this interim rule
[[Page 40819]]
does not require a regulatory flexibility analysis under the Regulatory
Flexibility Act of 1980, 5 U.S.C. chapter 6.
E. Public Comments to This Interim Rulemaking
Interested persons are invited to provide input to this interim
rule to revise the CAS applicability threshold from ``$650,000'' to
``the Truth in Negotiations Act (TINA) threshold, as adjusted for
inflation (41 U.S.C. 1908 and 41 U.S.C. 1502(b)(1)(B))'' as a result of
the periodic statutory adjustment of the TINA threshold for inflation.
Respondents are encouraged to identify, comment and provide information
on any issues that they believe are important to the subject. All
comments must be in writing, and submitted via facsimile, by e-mail, or
by any other means as instructed in the ADDRESSES section.
List of Subjects in 48 CFR Parts 9901 and 9903
Government procurement, cost accounting standards.
Daniel I. Gordon,
Chair, Cost Accounting Standards Boards.
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. 111-350, 124 Stat. 3677, 41 U.S.C. 1502.
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 the Truth
in Negotiations Act (TINA) threshold, as adjusted for inflation (41
U.S.C. 1908 and 41 U.S.C. 1502(b)(1)(B)), 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. 111-350, 124 Stat. 3677, 41 U.S.C. 1502.
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 the
Truth in Negotiations Act (TINA) threshold, as adjusted for inflation
(41 U.S.C. 1908 and 41 U.S.C. 1502(b)(1)(B)). 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 (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 the Truth in Negotiations Act (TINA)
threshold, as adjusted for inflation (41 U.S.C. 1908 and 41 U.S.C.
1502(b)(1)(B)), 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 the Truth in Negotiations Act (TINA) threshold, as
adjusted for inflation (41 U.S.C. 1908 and 41 U.S.C. 1502(b)(1)(B)).
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 in paragraph (a)(2) under the
provision heading, ``Cost Accounting Standards Notices and
Certification'', by revising the provision date and paragraph (a) of
Part I of the provision to read as follows:
9903.201-3 Solicitation provisions.
* * * * *
Cost Accounting Standards Notices and Certification (JUL 2011)
* * * * *
I. Disclosure Statement--Cost Accounting Practices and Certification
(a) Any contract in excess of the Truth in Negotiations Act (TINA)
threshold, as adjusted for inflation (41 U.S.C. 1908 and 41 U.S.C.
1502(b)(1)(B)), resulting from this solicitation, except for those
contracts which are exempt as specified in 9903.201-1.
* * * * *
0
7. Section 9903.201-4 is amended:
0
a. In paragraph (a)(2) under the clause heading, ``Cost Accounting
Standards'', by revising the clause date and paragraph (d) of the
clause.
0
b. By revising paragraph (c)(1); and in paragraph (c)(2) under the
clause heading ``Disclosure and Consistency of Cost Accounting
Practices'', by revising the clause date and paragraph (d)(2) of the
clause.
0
c. In paragraph (e)(2) under the clause heading, ``Cost Accounting
Standards--Educational Institutions'', by revising the clause date and
paragraph (d)(2) of the clause; and in paragraph (f)(2) under the
clause heading, ``Cost Accounting Practices--Foreign Concerns'', by
revising the clause date and paragraph (d)(2) of the clause .
9903.201-4 Contract clauses.
(a) * * *
(2) * * *
Cost Accounting Standards (JUL 2011)
* * * * *
(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 the Truth
in Negotiations Act (TINA) threshold, as adjusted for inflation (41
U.S.C. 1908 and 41 U.S.C. 1502(b)(1)(B)), 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.
[[Page 40820]]
(End of clause)
* * * * *
(c) Disclosure and Consistency of Cost Accounting Practices. (1)
The contracting officer shall insert the clause set forth below,
Disclosure and Consistency of Cost Accounting Practices, in negotiated
contracts when the contract amount is over the Truth in Negotiations
Act (TINA) threshold, as adjusted for inflation (41 U.S.C. 1908 and 41
U.S.C. 1502(b)(1)(B)), 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) * * *
Disclosure and Consistency of Cost Accounting Practices (JUL 2011)
* * * * *
(d) * * *
(2) This requirement shall apply only to negotiated subcontracts
in excess of the Truth in Negotiations Act (TINA) threshold, as
adjusted for inflation (41 U.S.C. 1908 and 41 U.S.C. 1502(b)(1)(B)).
* * * * *
(End of clause)
* * * * *
(e) * * *
(2) * * *
Cost Accounting Standards--Education Institutions (JUL 2011)
* * * * *
(d) * * *
(2) This requirement shall apply only to negotiated subcontracts
in excess of the Truth in Negotiations Act (TINA) threshold, as
adjusted for inflation (41 U.S.C. 1908 and 41 U.S.C 1502(b)(1)B)).
* * * * *
(End of clause)
(f) * * *
(2) * * *
Disclosure and Consistency of Cost Accounting Practices--Foreign
Concerns (JUL 2011)
* * * * *
(d) * * *
(2) This requirement shall apply only to negotiated subcontracts
in excess of the Truth in Negotiations Act (TINA) threshold, as
adjusted for inflation (41 U.S.C. 1908 and 41 U.S.C. 1502(b)(1)(B)).
* * * * *
(End of clause)
* * * * *
0
8. Section 9903.202-1 is amended by revising paragraphs (c)
introductory text, (f)(2)(i), and (f)(3)(i) through (iii) to read as
follows:
Sec. 9903.202-1 General requirements.
* * * * *
(c) When a Disclosure Statement is required, a separate Disclosure
Statement must be submitted for each segment whose costs included in
the total price of any CAS-covered contract or subcontract exceed the
Truth in Negotiations Act (TINA) threshold, as adjusted for inflation
(41 U.S.C. 1908 and 41 U.S.C. 1502(b)(1)(B)) 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
the Truth in Negotiations Act (TINA) threshold, as adjusted for
inflation (41 U.S.C. 1908 and 41 U.S.C. 1502(b)(1)(B)), 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. A Disclosure Statement is not required;
however, if the listed entity can demonstrate that the net amount of
Federal contract and financial assistance awards received during its
immediately preceding cost accounting period was less than $25 million.
* * * * *
(3) * * *
(i) For business units that are selected to receive a CAS-covered
contract or subcontract in excess of the Truth in Negotiations Act
(TINA) threshold, as adjusted for inflation (41 U.S.C. 1908 and 41
U.S.C. 1502(b)(1)(B)), 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 the Truth in Negotiations Act
(TINA) threshold, as adjusted for inflation (41 U.S.C. 1908 and 41
U.S.C. 1502(b)(1)(B)), 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 the Truth in Negotiations Act
(TINA) threshold, as adjusted for inflation (41 U.S.C. 1908 and 41
U.S.C. 1502(b)(1)(B)), 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. 2011-16846 Filed 7-11-11; 8:45 am]
BILLING CODE P
