Cost Accounting Standards: Clarification of the Exemption From Cost Accounting Standards for Firm-Fixed-Price Contracts and Subcontracts Awarded Without Submission of Certified Cost or Pricing Data, 61660-61661 [2011-25623]

Agencies

• Office of Management and Budget
• Office of Federal Procurement Policy
• Federal Procurement Policy Office

[Federal Register Volume 76, Number 193 (Wednesday, October 5, 2011)]
[Proposed Rules]
[Pages 61660-61661]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-25623]


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OFFICE OF MANAGEMENT AND BUDGET

Office of Federal Procurement Policy

48 CFR Part 9903


Cost Accounting Standards: Clarification of the Exemption From 
Cost Accounting Standards for Firm-Fixed-Price Contracts and 
Subcontracts Awarded Without Submission of Certified Cost or Pricing 
Data

AGENCY: Office of Management and Budget (OMB), Office of Federal 
Procurement Policy, Cost Accounting Standards Board.

ACTION: Proposed rule.

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SUMMARY: The Office of Federal Procurement Policy (OFPP), Cost 
Accounting Standards (CAS) Board, invites public comments concerning 
this proposed to clarify the application of the exemption from CAS at 
48 CFR 9903.201-1(b)(15) for firm-fixed-price (FFP) contracts and 
subcontracts awarded on the basis of adequate price competition without 
submission of cost or pricing data (hereafter referred to as the 
``(b)(15) FFP exemption''). The proposed rule will revise the (b)(15) 
FFP exemption to clarify that the exemption applies to firm-fixed-price 
contracts and subcontracts awarded on the basis of adequate price 
competition without submission of certified cost or pricing data.

DATES: Comment date: Comments must be in writing and must be received 
by December 5, 2011.

ADDRESSES: All comments to this proposed 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 ``(b)(15) FFP exemption'' (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 ``(b)(15) FFP exemption'' 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.

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 CAS Accounting 
Standards Board (Board) are codified at 48 CFR Chapter 99. This 
proposed rule concerns the amendment of a CAS Board regulation other 
than a Standard, and as such is not subject to the statutorily 
prescribed rulemaking process for the promulgation of a Standard at 41 
U.S.C. 1502(c) [formerly, 41 U.S.C. 422(g)].

B. Background and Summary

    Section 802 of the National Defense Authorization Act for Fiscal 
Year 2000 (Pub. L. 106-65) contained a provision for ``Streamlined 
Applicability of Cost Accounting Standards.'' Included in the provision 
was a revision to paragraph (2)(B) of Section 26(f) of the Office of 
Federal Procurement Policy Act (41 U.S.C. 1502(b)(1)(C) [formerly, 41 
U.S.C. 422(f)(2)(B)]) that exempted from the application of CAS, 
``Firm-fixed-price contracts or subcontracts awarded on the basis of 
adequate price competition without submission of certified cost or 
pricing data.''
    Section 802 adopted the recommendation of the Cost Accounting 
Standards Board Review Panel of the General Accounting Office (GAO) (as 
it was then called--the name was changed effective July 7, 2004 to the 
Government Accountability Office) that examined the future role of the 
CAS Board. In its report of April 2, 1999, the panel observed that a 
contracting officer is generally not allowed to request certified cost 
or pricing data where there is adequate price competition, the prices 
are set by law or regulation, or the acquisition is for commercial 
items. The panel noted that the risk to the Government in negotiating 
contract prices in these circumstances is not considered high enough to 
warrant obtaining certified cost or pricing data. The panel opined that 
the Government's risk assessment should be equally applicable to CAS 
and concluded that when certified cost or pricing data were not 
obtained for FFP contracts and subcontracts, the safeguards provided by 
CAS were likewise not necessary.
    Section 802 was implemented by the CAS Board as an interim rule on 
February 7, 2000 (65 FR 5990), and as a final rule on June 9, 2000 (65 
FR 36768). At the time, the CAS Board chose to express the (b)(15) FFP 
exemption as follows: ``Firm-fixed-price contracts or subcontracts 
awarded on the basis of adequate price competition without submission 
of cost or pricing data.'' The term ``certified'' was not used. The CAS 
Board explained that it chose this wording in order to conform to the 
statutory requirements of 10 U.S.C. 2306(h)(1) and 41 U.S.C. 3502(b) 
[formerly, 41 U.S.C. 254(b)] which defined ``cost or pricing data'' as 
data that requires certification. That is, the phrase ``cost or pricing 
data'' was understood to mean ``certified cost or pricing data.''
    On August 30, 2010, the Civilian Agency Acquisition Council and 
Defense Acquisition Regulations Council (Councils) issued a final rule 
to clarify the distinction between ``certified cost or pricing data'' 
and ``data other than certified cost or pricing data,'' as well as to 
clarify requirements for submission of cost or pricing data (75 FR 
53135). Among other things, the Councils revised the definitions at

[[Page 61661]]

Federal Acquisition Regulation (FAR) 2.101 related to cost or pricing 
data. Included within the definition of ``data other than certified 
cost or pricing data'' is a statement that such data may include the 
identical types of data as ``certified cost or pricing data,'' but 
without the certification. Thus, the definitions of both ``certified 
cost or pricing data'' and ``data other than certified cost or pricing 
data'' refer to cost or pricing data.

C. Conclusion

    The CAS Board believes the August 30, 2010 revisions to FAR 2.101 
may cause some confusion over the applicability of CAS in view of the 
current wording of the (b)(15) FFP exemption. Consistent with Section 
802, it has not been the CAS Board's intent to apply CAS to FFP 
contracts or subcontracts awarded on the basis of adequate price 
competition where certified cost or pricing data was not obtained. 
Therefore, the CAS Board is considering a proposed change to the 
wording of the (b)(15) FFP exemption.

D. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. Chapter 35, Subchapter 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 purpose of this proposed rule is 
to clarify the implementation of the ``Streamlined Applicability of 
Cost Accounting Standards'' at Section 802 of National Defense 
Authorization Act for Fiscal Year 2000.

E. Executive Order 12866, the Congressional Review Act, and the 
Regulatory Flexibility Act

    This rule serves to clarify the elimination of certain 
administrative requirements associated with the application and 
administration of the Cost Accounting Standards by covered Government 
contractors and subcontractors, consistent with the provisions of 
``Streamlined Applicability of Cost Accounting Standards'' at Section 
802 of National Defense Authorization Act for Fiscal Year 2000. The 
economic impact on contractors and subcontractors is, therefore, 
expected to be minor. As a result, the CAS Board has determined that 
this proposed 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. Finally, this 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 proposed rule does not require a regulatory flexibility 
analysis under the Regulatory Flexibility Act of 1980, 5 U.S.C. Chapter 
6.

List of Subjects in 48 CFR Part 9903

    Cost accounting standards, Government procurement.

Daniel I. Gordon,
Chair, Cost Accounting Standards Board.

    For the reasons set forth in this preamble, chapter 99 of Title 48 
of the Code of Federal Regulations is proposed to be amended as set 
forth below:

PART 9903--CONTRACT COVERAGE

    1. The authority citation for Part 9903 continues to read as 
follows:

    Authority: Public Law 111-350, 124 Stat. 3677, 41 U.S.C. 1502.

SUBPART 9903.2--CAS PROGRAM REQUIREMENTS

    2. Section 9903.201-1 is amended by revising paragraph (b)(15) to 
read as follows:


9903.201-1  CAS applicability.

* * * * *
    (b) * * *
    (15) Firm-fixed-price contracts or subcontracts awarded on the 
basis of adequate price competition without submission of certified 
cost or pricing data.
* * * * *
[FR Doc. 2011-25623 Filed 10-4-11; 8:45 am]
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