Federal Acquisition Regulation; Proper Use and Management of Cost-Reimbursement Contracts, 12925-12927 [2012-4481]
Download as PDF
<![CDATA[
Federal Register / Vol. 77, No. 42 / Friday, March 2, 2012 / Rules and Regulations
Six respondents submitted comments
in response to the interim rule.
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 1, 2, 7, 16, 32, 42, and 50
[FAC 2005–56; FAR Case 2008–030; Item
II; Docket 2011–0082, Sequence 1]
RIN 9000–AL78
Federal Acquisition Regulation; Proper
Use and Management of CostReimbursement Contracts
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Final rule.
AGENCIES:
DoD, GSA, and NASA have
adopted as final, with changes, an
interim rule amending the Federal
Acquisition Regulation (FAR) to
implement a section of the Duncan
Hunter National Defense Authorization
Act for Fiscal Year 2009 that addresses
the use and management of costreimbursement contracts.
DATES: Effective Date: April 2, 2012
FOR FURTHER INFORMATION CONTACT: Mr.
William Clark, Procurement Analyst, at
202–219–1813, for clarification of
content. For information pertaining to
status or publication schedules, contact
the Regulatory Secretariat at 202–501–
4755. Please cite FAC 2005–56, FAR
Case 2008–030.
SUPPLEMENTARY INFORMATION:
mstockstill on DSK4VPTVN1PROD with RULES2
SUMMARY:
I. Background
DoD, GSA, and NASA published an
interim rule in the Federal Register at
76 FR 14543 on March 16, 2011, to
implement section 864 of the Duncan
Hunter National Defense Authorization
Act for Fiscal Year 2009 (NDAA) (Pub.
L. 110–417) enacted on October 14,
2008. This law aligns with the
President’s goal of reducing high-risk
contracting as denoted in the March 4,
2009, Presidential Memorandum on
Government Contracting. Section 864 of
the law requires amending the FAR to
address the use and management of
cost-reimbursement contracts in the
following three areas:
1. Circumstances when costreimbursement contracts are
appropriate.
2. Acquisition plan findings to
support the selection of a costreimbursement contract.
3. Acquisition resources necessary to
award and manage a costreimbursement contract.
VerDate Mar<15>2010
18:06 Mar 01, 2012
Jkt 226001
II. Discussion and Analysis
The Civilian Agency Acquisition
Council and the Defense Acquisition
Regulations Council (the Councils)
reviewed the public comments in the
development of the final rule. A
discussion of the comments and the
changes made to the rule as a result of
those comments are provided as
follows:
Comment: One respondent expressed
a preference for continued reliance on
OMB Circular A–133 Audits of States,
Local Governments and Non-Profit
Organizations to determine and monitor
the adequacy of an educational
institution or nonprofit organization’s
accounting system during the
performance of cost-type contracts.
Response: The rule does not prevent
reliance on OMB Circular A–133 to
determine and monitor the adequacy of
an educational institution or nonprofit
organization’s accounting system during
the performance of cost-type contracts.
Comment: A number of respondents
asked for clarification of whether the
appointment of a contracting officer’s
representative (COR) is now mandatory
for other than firm-fixed-price contracts.
Response: A COR is required on all
contracts and orders other than those
that are firm-fixed-price, and for firmfixed-price contracts, as appropriate.
The Government applies this
requirement to all contract types except
firm-fixed-price contracts.
Comment: One respondent referenced
FAR 16.103(d)(1) stating ‘‘Each contract
file shall include documentation to
show why the particular contract type
was selected. This shall be documented
in the acquisition plan, or if a written
acquisition plan is not required, in the
contract file.’’ The respondent
recommended clarifying the
circumstances when a formal
acquisition plan would not be required.
Response: There are circumstances,
such as low dollar thresholds or noncomplex contracts, which are set forth
in agency procedures, when a formal
acquisition plan is not required.
However, if a written acquisition plan is
not required, the contract type selection
must still be documented in the contract
file.
Comment: One respondent expressed
support for the interim rule and stated
an opinion that cost-plus-incentive-fee
is the best contract type for the
Government and U.S. taxpayer,
particularly when in a sole-source
environment.
Response: Contracting officers are
required to determine the appropriate
PO 00000
Frm 00015
Fmt 4701
Sfmt 4700
12925
contract type that is in the best interests
of the Government.
Comment: One respondent
recommended that the final rule be
written so as to exempt research and
development (R&D) contracts from the
requirements. The respondent
questioned the necessity of the
documentation requirements set forth in
this rule for R&D contracts. Further, the
respondent questioned the necessity of
assigning CORs to R&D contracts, since
contracting officers generally retain
such duties.
Response: Section 864 does not
provide for an exception for R&D
contracts under this rule. Each contract
file shall include documentation to
show why the particular contract type
was selected, in order to ensure the
appropriate contract type is utilized.
Specifically for high risk contracts such
as R&D contracts it is necessary to
discuss the Government’s additional
risks and the burden to manage the
contract type selected. Contracting
officers are not precluded under this
rule from retaining COR duties.
Comment: One respondent
recommended that the Councils reset
the effective date of the interim rule to
permit training and designation of CORs
and revision of internal guidance and
templates.
Response: The statute does not
provide for a grace period to permit
training and designation of CORs and
revision of internal guidance and
templates.
Comment: One respondent
commented that the interim rule
interferes with the contracting officer’s
discretion in selecting the appropriate
contract type, and imposes a
documentation burden that may not be
effective in actually reducing the risk to
the Government.
Response: The rule does not interfere
with the contracting officer’s discretion
to select the appropriate contract type.
It merely clarifies when costreimbursement contracts are appropriate
and requires the contracting officer to
document the rationale for the decision.
Comment: One respondent questioned
the applicability of the rule to other
than firm-fixed price contracts, and
specifically for supply type contracts.
The respondent questioned whether the
term ‘‘other than firm-fixed price
contracts’’ means only costreimbursement, time-and-material, and
labor-hour contracts.
Response: The term ‘‘other than firmfixed price contracts’’ means all contract
types other than firm-fixed price
contracts, including supply type
contracts.
E:\FR\FM\02MRR2.SGM
02MRR2
12926
Federal Register / Vol. 77, No. 42 / Friday, March 2, 2012 / Rules and Regulations
mstockstill on DSK4VPTVN1PROD with RULES2
Comment: One respondent
recommended the contracting officer be
required to make a written
determination in order to retain and
execute the COR duties. Further the
respondent recommended delaying the
designation of the COR until the
contractor or potential contractor is
identified and the terms and conditions
of the contract are known.
Response: Contracting officers are not
required to make formal written
determinations in order to retain their
existing duties and responsibilities.
However, when the appointment of
CORs is necessary, in order to ensure
adequate resources are available to
monitor and manage other than firmfixed price contracts, CORs must be
nominated as early as practicable. It
would not be in the Government’s best
interest to delay such appointments.
III. Changes in the Final Rule
The following changes were made in
the final rule:
(1) FAR 1.602–2(d) was revised to
clarify that COR duties may be retained
by contracting officers; the language has
been revised and moved to the first
sentence.
(2) FAR 1.602–2(d)(1), (3), and (6)
were modified to make administrative
revisions.
(3) At FAR 1.602–2(d)(2), the word
‘‘current’’ has been added and the words
‘‘dated November 26, 2007’’ have been
removed. Additionally, the phrase ‘‘or
for DoD, DoD Regulations as applicable’’
has been replaced by the phrase ‘‘or for
DoD, in accordance with the current
applicable DoD policy guidance.’’
(4) With regard to nomination of a
COR, FAR 7.104(e) was modified to
delete ‘‘and designated and authorized
by the contracting officer’’ because it is
redundant to language in the following
sentence.
(5) FAR 16.103(d)(1) was revised to
make an administrative change. The
phrase ‘‘in the contract file’’ was moved
from the end of the sentence to the
middle of the sentence for clarity. The
words ‘‘by agency procedures’’ were
also added for clarity.
(6) Because the need to document the
contract file with regard to selection of
contract type is already adequately
addressed in FAR 16.103(d)(1), FAR
16.301–2(b) was revised to remove the
next to last sentence, ‘‘If a written
acquisition plan is not required, the
contracting officer shall document the
rationale in the contract file.’’
(7) FAR 16.301–3(a)(4) has been
modified to add at the beginning ‘‘Prior
to award of the contract or order,’’ with
regard to the requirement for availability
of adequate Government resources to
VerDate Mar<15>2010
18:06 Mar 01, 2012
Jkt 226001
award and manage a contract other than
firm-fixed price. FAR 16.301–3(a)(4) is
further modified to delete the previous
(a)(4)(i) (designation of COR is
addressed elsewhere) and make the old
(a)(4)(ii) the second sentence of (a)(4).
The previous (a)(4)(ii) language has been
revised to read, ‘‘This includes
appropriate Government surveillance
during performance in accordance with
1.602–2, to provide reasonable
assurance that efficient methods and
effective cost controls are used.’’
IV. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and
13563 direct agencies to assess all costs
and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). E.O. 13563 emphasizes the
importance of quantifying both costs
and benefits, of reducing costs, of
harmonizing rules, and of promoting
flexibility. This is not a significant
regulatory action and, therefore, was not
subject to review under section 6(b) of
E.O. 12866, Regulatory Planning and
Review, dated September 30, 1993. This
rule is not a major rule under 5 U.S.C.
804.
V. Regulatory Flexibility Act
The Department of Defense, the
General Services Administration, and
the National Aeronautics and Space
Administration certify 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
section 864 affects only internal
Government operations and requires the
Government to establish internal
guidance on the proper use and
management of all contracts especially
other than firm-fixed-price contracts
(e.g., cost-reimbursement, time-andmaterial, and labor-hour) and does not
impose any additional requirements on
small businesses. Therefore, a Final
Regulatory Flexibility Analysis has not
been performed.
VI. Paperwork Reduction Act
The final rule does not contain any
information collection requirements that
require the approval of the Office of
Management and Budget under the
Paperwork Reduction Act (44 U.S.C.
chapter 35).
PO 00000
Frm 00016
Fmt 4701
Sfmt 4700
List of Subjects in 48 CFR Parts 1, 2, 7,
16, 32, 42, and 50
Government procurement.
Dated: February 21, 2012.
Laura Auletta,
Director, Office of Governmentwide
Acquisition Policy, Office of Acquisition
Policy, Office of Governmentwide Policy.
Interim Rule Adopted as Final With
Changes
Accordingly, the interim rule
amending 48 CFR parts 1, 2, 7, 16, 32,
42, and 50 which was published in the
Federal Register at 76 FR 14543 on
March 16, 2011, is adopted as final with
the following changes:
■ 1. The authority citation for 48 CFR
parts 1, 7, and 16 continues to read as
follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 137; and 42 U.S.C. 2473(c).
PART 1—FEDERAL ACQUISITION
REGULATIONS SYSTEM
2. Amend section 1.602–2 by—
a. Revising the introductory text of
paragraph (d), and paragraphs (d)(1),
(d)(2), and (d)(3); and
■ b. Removing from paragraph (d)(6)
‘‘Must’’ and adding ‘‘Shall’’ in its place.
The revised text reads as follows:
■
■
1.602–2
Responsibilities.
*
*
*
*
*
(d) Unless the contracting officer
retains and executes the contracting
officer’s representative (COR) duties, in
accordance with agency procedures,
designate and authorize, in writing, a
COR on all contracts and orders other
than those that are firm-fixed price, and
for firm-fixed-price contracts and orders
as appropriate. See 7.104(e). A COR—
(1) Shall be a Government employee,
unless otherwise authorized in agency
regulations;
(2) Shall be certified and maintain
certification in accordance with the
current Office of Management and
Budget memorandum on the Federal
Acquisition Certification for Contracting
Officer Representatives (FAC-COR)
guidance, or for DoD, in accordance
with the current applicable DoD policy
guidance;
(3) Shall be qualified by training and
experience commensurate with the
responsibilities to be delegated in
accordance with agency procedures;
*
*
*
*
*
PART 7—ACQUISITION PLANNING
7.104
[Amended]
3. Amend section 7.104 by removing
from paragraph (e) ‘‘, and designated
■
E:\FR\FM\02MRR2.SGM
02MRR2
Federal Register / Vol. 77, No. 42 / Friday, March 2, 2012 / Rules and Regulations
and authorized by the contracting
officer,’’.
PART 16—TYPES OF CONTRACTS
4. Amend section 16.103 by revising
the second sentence of paragraph (d)(1)
introductory text to read as follows:
■
16.103
Negotiating contract type.
*
*
*
*
*
(d) * * *
(1) * * * This shall be documented in
the acquisition plan, or in the contract
file if a written acquisition plan is not
required by agency procedures.
*
*
*
*
*
16.301–2
[Amended]
5. Amend section 16.301–2 by
removing the second sentence from
paragraph (b).
■ 6. Amend section 16.301–3 by—
■ a. Removing from paragraph (a)(3)
‘‘contract;’’ and adding ‘‘contract or
order;’’ in its place; and
■ b. Revising paragraph (a)(4).
The revised text reads as follows:
■
16.301–3
I. Background
Limitations.
(a) * * *
(4) Prior to award of the contract or
order, adequate Government resources
are available to award and manage a
contract other that firm-fixed-priced (see
7.104(e)). This includes appropriate
Government surveillance during
performance in accordance with
1.602–2, to provide reasonable
assurance that efficient methods and
effective cost controls are used.
*
*
*
*
*
[FR Doc. 2012–4481 Filed 3–1–12; 8:45 am]
BILLING CODE 6820–EP–P
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 5, 8, 16, 18, and 38
[FAC 2005–56; FAR Case 2007–012; Item
III; Docket 2011–0081, Sequence 1]
mstockstill on DSK4VPTVN1PROD with RULES2
RIN 9000–AL93
Federal Acquisition Regulation:
Requirements for Acquisitions
Pursuant to Multiple-Award Contracts
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Final rule.
AGENCIES:
VerDate Mar<15>2010
18:06 Mar 01, 2012
Jkt 226001
DoD, GSA, and NASA have
adopted as final, with changes, an
interim rule amending the Federal
Acquisition Regulation (FAR) to
implement a section of the Duncan
Hunter National Defense Authorization
Act for Fiscal Year 2009 to enhance
competition in the purchase of supplies
and services by all executive agencies
under multiple-award contracts.
DATES: Effective Date: April 2, 2012.
FOR FURTHER INFORMATION CONTACT: Mr.
William Clark, Procurement Analyst, at
202–219–1813 for clarification of
content. For information pertaining to
status or publication schedules, contact
the Regulatory Secretariat at 202–501–
4755. Please cite FAC 2005–56, FAR
Case 2007–012.
SUPPLEMENTARY INFORMATION:
SUMMARY:
DoD, GSA, and NASA published an
interim rule in the Federal Register at
76 FR 14548 on March 16, 2011, to
implement section 863 of the Duncan
Hunter National Defense Authorization
Act for Fiscal Year 2009 (Pub. L. 110–
417), enacted on October 14, 2008.
Section 863 mandated the development
and publication of regulations in the
FAR to enhance competition for the
award of orders placed under multipleaward contracts. Section 863 specified
enhancements that include—
• Strengthening competition rules for
placing orders under the Federal Supply
Schedules (FSS) program and other
multiple-award contracts to ensure both
the provision of fair notice to contract
holders and the opportunity for contract
holders to respond (similar to the
procedures implemented for section 803
of the National Defense Authorization
Act for Fiscal Year 2002 (Pub. L. 107–
107)); and
• Providing notice in FedBizOpps of
certain orders placed under multipleaward contracts, including FSS.
For each individual purchase of
supplies or services in excess of the
simplified acquisition threshold (SAT)
that is made under a multiple-award
contract, section 863 requires the
provision of fair notice of intent to make
a purchase (including a description of
the work to be performed and the basis
on which the selection will be made) to
all contractors offering such supplies or
services under the multiple-award
contract. In addition, the statute
requires that all contractors responding
to the notice be afforded a fair
opportunity to make an offer and have
that offer fairly considered by the
purchasing official. A notice may be
provided to fewer than all contractors
offering such supplies or services under
PO 00000
Frm 00017
Fmt 4701
Sfmt 4700
12927
a multiple-award contract if the notice
is provided to as many contractors as
practicable. When notice is provided to
fewer than all the contractors, a
purchase cannot be made unless—
• Offers were received from at least
three qualified contractors; or
• A contracting officer determines in
writing that no additional qualified
contractors were able to be identified
despite reasonable efforts to do so.
These requirements may be waived on
the basis of a justification, including a
written determination identifying the
statutory basis for an exception to fair
opportunity, that is prepared and
approved at the levels specified in the
FAR.
In considering the regulatory changes
to strengthen the use of competition in
task and delivery-order contracts, DoD,
GSA, and NASA made changes
consistent with the general competition
principles addressed in the President’s
March 4, 2009, Memorandum on
Government Contracting (available at
https://www.whitehouse.gov/
the_press_office/Memorandum-for-theHeads-of-Executive-Departments-andAgencies-Subject-Government), while
still preserving the efficiencies of these
contract vehicles. For this reason, the
rule addressed several issues that were
not expressly addressed in section 863,
such as competition for the
establishment and placement of orders
under FSS blanket purchase agreements
(BPAs).
The FAR changes are applicable to
task and delivery orders placed against
multiple-award contracts including FSS
and BPAs awarded under FSS pursuant
to FAR subpart 8.4, and indefinitedelivery/indefinite-quantity contracts
awarded pursuant to subpart 16.5. They
do not apply to BPAs awarded pursuant
to part 13.
Seven respondents submitted
comments on the interim rule.
II. Discussion and Analysis
The Civilian Agency Acquisition
Council and the Defense Acquisition
Regulations Council (the Councils)
reviewed the comments in the
development of the final rule.
Respondents submitted comments
covering the following nine categories:
(1) Conformance with the Small
Business Jobs Act; (2) The $103 million
threshold reference; (3) Posting
requirements; (4) Eliminate distinctions
between single-award and multipleaward BPAs; (5) Competition
requirements for establishing BPAs and
allowing flexibility in establishing BPA
ordering procedures; (6) BPA
requirements and health-care programs;
(7) Competition above the SAT is a
E:\FR\FM\02MRR2.SGM
02MRR2
]]>Agencies
[Federal Register Volume 77, Number 42 (Friday, March 2, 2012)]
[Rules and Regulations]
[Pages 12925-12927]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-4481]
[[Page 12925]]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1, 2, 7, 16, 32, 42, and 50
[FAC 2005-56; FAR Case 2008-030; Item II; Docket 2011-0082, Sequence 1]
RIN 9000-AL78
Federal Acquisition Regulation; Proper Use and Management of
Cost-Reimbursement Contracts
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD, GSA, and NASA have adopted as final, with changes, an
interim rule amending the Federal Acquisition Regulation (FAR) to
implement a section of the Duncan Hunter National Defense Authorization
Act for Fiscal Year 2009 that addresses the use and management of cost-
reimbursement contracts.
DATES: Effective Date: April 2, 2012
FOR FURTHER INFORMATION CONTACT: Mr. William Clark, Procurement
Analyst, at 202-219-1813, for clarification of content. For information
pertaining to status or publication schedules, contact the Regulatory
Secretariat at 202-501-4755. Please cite FAC 2005-56, FAR Case 2008-
030.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA published an interim rule in the Federal
Register at 76 FR 14543 on March 16, 2011, to implement section 864 of
the Duncan Hunter National Defense Authorization Act for Fiscal Year
2009 (NDAA) (Pub. L. 110-417) enacted on October 14, 2008. This law
aligns with the President's goal of reducing high-risk contracting as
denoted in the March 4, 2009, Presidential Memorandum on Government
Contracting. Section 864 of the law requires amending the FAR to
address the use and management of cost-reimbursement contracts in the
following three areas:
1. Circumstances when cost-reimbursement contracts are appropriate.
2. Acquisition plan findings to support the selection of a cost-
reimbursement contract.
3. Acquisition resources necessary to award and manage a cost-
reimbursement contract.
Six respondents submitted comments in response to the interim rule.
II. Discussion and Analysis
The Civilian Agency Acquisition Council and the Defense Acquisition
Regulations Council (the Councils) reviewed the public comments in the
development of the final rule. A discussion of the comments and the
changes made to the rule as a result of those comments are provided as
follows:
Comment: One respondent expressed a preference for continued
reliance on OMB Circular A-133 Audits of States, Local Governments and
Non-Profit Organizations to determine and monitor the adequacy of an
educational institution or nonprofit organization's accounting system
during the performance of cost-type contracts.
Response: The rule does not prevent reliance on OMB Circular A-133
to determine and monitor the adequacy of an educational institution or
nonprofit organization's accounting system during the performance of
cost-type contracts.
Comment: A number of respondents asked for clarification of whether
the appointment of a contracting officer's representative (COR) is now
mandatory for other than firm-fixed-price contracts.
Response: A COR is required on all contracts and orders other than
those that are firm-fixed-price, and for firm-fixed-price contracts, as
appropriate. The Government applies this requirement to all contract
types except firm-fixed-price contracts.
Comment: One respondent referenced FAR 16.103(d)(1) stating ``Each
contract file shall include documentation to show why the particular
contract type was selected. This shall be documented in the acquisition
plan, or if a written acquisition plan is not required, in the contract
file.'' The respondent recommended clarifying the circumstances when a
formal acquisition plan would not be required.
Response: There are circumstances, such as low dollar thresholds or
non-complex contracts, which are set forth in agency procedures, when a
formal acquisition plan is not required. However, if a written
acquisition plan is not required, the contract type selection must
still be documented in the contract file.
Comment: One respondent expressed support for the interim rule and
stated an opinion that cost-plus-incentive-fee is the best contract
type for the Government and U.S. taxpayer, particularly when in a sole-
source environment.
Response: Contracting officers are required to determine the
appropriate contract type that is in the best interests of the
Government.
Comment: One respondent recommended that the final rule be written
so as to exempt research and development (R&D) contracts from the
requirements. The respondent questioned the necessity of the
documentation requirements set forth in this rule for R&D contracts.
Further, the respondent questioned the necessity of assigning CORs to
R&D contracts, since contracting officers generally retain such duties.
Response: Section 864 does not provide for an exception for R&D
contracts under this rule. Each contract file shall include
documentation to show why the particular contract type was selected, in
order to ensure the appropriate contract type is utilized. Specifically
for high risk contracts such as R&D contracts it is necessary to
discuss the Government's additional risks and the burden to manage the
contract type selected. Contracting officers are not precluded under
this rule from retaining COR duties.
Comment: One respondent recommended that the Councils reset the
effective date of the interim rule to permit training and designation
of CORs and revision of internal guidance and templates.
Response: The statute does not provide for a grace period to permit
training and designation of CORs and revision of internal guidance and
templates.
Comment: One respondent commented that the interim rule interferes
with the contracting officer's discretion in selecting the appropriate
contract type, and imposes a documentation burden that may not be
effective in actually reducing the risk to the Government.
Response: The rule does not interfere with the contracting
officer's discretion to select the appropriate contract type. It merely
clarifies when cost-reimbursement contracts are appropriate and
requires the contracting officer to document the rationale for the
decision.
Comment: One respondent questioned the applicability of the rule to
other than firm-fixed price contracts, and specifically for supply type
contracts. The respondent questioned whether the term ``other than
firm-fixed price contracts'' means only cost-reimbursement, time-and-
material, and labor-hour contracts.
Response: The term ``other than firm-fixed price contracts'' means
all contract types other than firm-fixed price contracts, including
supply type contracts.
[[Page 12926]]
Comment: One respondent recommended the contracting officer be
required to make a written determination in order to retain and execute
the COR duties. Further the respondent recommended delaying the
designation of the COR until the contractor or potential contractor is
identified and the terms and conditions of the contract are known.
Response: Contracting officers are not required to make formal
written determinations in order to retain their existing duties and
responsibilities. However, when the appointment of CORs is necessary,
in order to ensure adequate resources are available to monitor and
manage other than firm-fixed price contracts, CORs must be nominated as
early as practicable. It would not be in the Government's best interest
to delay such appointments.
III. Changes in the Final Rule
The following changes were made in the final rule:
(1) FAR 1.602-2(d) was revised to clarify that COR duties may be
retained by contracting officers; the language has been revised and
moved to the first sentence.
(2) FAR 1.602-2(d)(1), (3), and (6) were modified to make
administrative revisions.
(3) At FAR 1.602-2(d)(2), the word ``current'' has been added and
the words ``dated November 26, 2007'' have been removed. Additionally,
the phrase ``or for DoD, DoD Regulations as applicable'' has been
replaced by the phrase ``or for DoD, in accordance with the current
applicable DoD policy guidance.''
(4) With regard to nomination of a COR, FAR 7.104(e) was modified
to delete ``and designated and authorized by the contracting officer''
because it is redundant to language in the following sentence.
(5) FAR 16.103(d)(1) was revised to make an administrative change.
The phrase ``in the contract file'' was moved from the end of the
sentence to the middle of the sentence for clarity. The words ``by
agency procedures'' were also added for clarity.
(6) Because the need to document the contract file with regard to
selection of contract type is already adequately addressed in FAR
16.103(d)(1), FAR 16.301-2(b) was revised to remove the next to last
sentence, ``If a written acquisition plan is not required, the
contracting officer shall document the rationale in the contract
file.''
(7) FAR 16.301-3(a)(4) has been modified to add at the beginning
``Prior to award of the contract or order,'' with regard to the
requirement for availability of adequate Government resources to award
and manage a contract other than firm-fixed price. FAR 16.301-3(a)(4)
is further modified to delete the previous (a)(4)(i) (designation of
COR is addressed elsewhere) and make the old (a)(4)(ii) the second
sentence of (a)(4). The previous (a)(4)(ii) language has been revised
to read, ``This includes appropriate Government surveillance during
performance in accordance with 1.602-2, to provide reasonable assurance
that efficient methods and effective cost controls are used.''
IV. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is not a significant regulatory action and, therefore, was not
subject to review under section 6(b) of E.O. 12866, Regulatory Planning
and Review, dated September 30, 1993. This rule is not a major rule
under 5 U.S.C. 804.
V. Regulatory Flexibility Act
The Department of Defense, the General Services Administration, and
the National Aeronautics and Space Administration certify 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 section 864 affects
only internal Government operations and requires the Government to
establish internal guidance on the proper use and management of all
contracts especially other than firm-fixed-price contracts (e.g., cost-
reimbursement, time-and-material, and labor-hour) and does not impose
any additional requirements on small businesses. Therefore, a Final
Regulatory Flexibility Analysis has not been performed.
VI. Paperwork Reduction Act
The final rule does not contain any information collection
requirements that require the approval of the Office of Management and
Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).
List of Subjects in 48 CFR Parts 1, 2, 7, 16, 32, 42, and 50
Government procurement.
Dated: February 21, 2012.
Laura Auletta,
Director, Office of Governmentwide Acquisition Policy, Office of
Acquisition Policy, Office of Governmentwide Policy.
Interim Rule Adopted as Final With Changes
Accordingly, the interim rule amending 48 CFR parts 1, 2, 7, 16,
32, 42, and 50 which was published in the Federal Register at 76 FR
14543 on March 16, 2011, is adopted as final with the following
changes:
0
1. The authority citation for 48 CFR parts 1, 7, and 16 continues to
read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM
0
2. Amend section 1.602-2 by--
0
a. Revising the introductory text of paragraph (d), and paragraphs
(d)(1), (d)(2), and (d)(3); and
0
b. Removing from paragraph (d)(6) ``Must'' and adding ``Shall'' in its
place.
The revised text reads as follows:
1.602-2 Responsibilities.
* * * * *
(d) Unless the contracting officer retains and executes the
contracting officer's representative (COR) duties, in accordance with
agency procedures, designate and authorize, in writing, a COR on all
contracts and orders other than those that are firm-fixed price, and
for firm-fixed-price contracts and orders as appropriate. See 7.104(e).
A COR--
(1) Shall be a Government employee, unless otherwise authorized in
agency regulations;
(2) Shall be certified and maintain certification in accordance
with the current Office of Management and Budget memorandum on the
Federal Acquisition Certification for Contracting Officer
Representatives (FAC-COR) guidance, or for DoD, in accordance with the
current applicable DoD policy guidance;
(3) Shall be qualified by training and experience commensurate with
the responsibilities to be delegated in accordance with agency
procedures;
* * * * *
PART 7--ACQUISITION PLANNING
7.104 [Amended]
0
3. Amend section 7.104 by removing from paragraph (e) ``, and
designated
[[Page 12927]]
and authorized by the contracting officer,''.
PART 16--TYPES OF CONTRACTS
0
4. Amend section 16.103 by revising the second sentence of paragraph
(d)(1) introductory text to read as follows:
16.103 Negotiating contract type.
* * * * *
(d) * * *
(1) * * * This shall be documented in the acquisition plan, or in
the contract file if a written acquisition plan is not required by
agency procedures.
* * * * *
16.301-2 [Amended]
0
5. Amend section 16.301-2 by removing the second sentence from
paragraph (b).
0
6. Amend section 16.301-3 by--
0
a. Removing from paragraph (a)(3) ``contract;'' and adding ``contract
or order;'' in its place; and
0
b. Revising paragraph (a)(4).
The revised text reads as follows:
16.301-3 Limitations.
(a) * * *
(4) Prior to award of the contract or order, adequate Government
resources are available to award and manage a contract other that firm-
fixed-priced (see 7.104(e)). This includes appropriate Government
surveillance during performance in accordance with 1.602-2, to provide
reasonable assurance that efficient methods and effective cost controls
are used.
* * * * *
[FR Doc. 2012-4481 Filed 3-1-12; 8:45 am]
BILLING CODE 6820-EP-P
