Defense Federal Acquisition Regulation Supplement; Unallowable Fringe Benefit Costs (DFARS Case 2012-D038), 13606-13607 [2013-04353]

Download as PDF 13606 Federal Register / Vol. 78, No. 40 / Thursday, February 28, 2013 / Proposed Rules 226.7200 226.7201 226.7202 226.7203 226.7204 Scope of subpart. Definition. Applicability. Policy. Contract clause. 226.7200 Scope of subpart. PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 4. The authority citation for part 252 continues to read as follows: ■ This subpart implements section 862 of the National Defense Authorization Act for Fiscal Year 2012 (Pub. L. 112– 81). Authority: 41 U.S.C. 1303 and 48 CFR chapter 1. 226.7201 252.226–70XX Encouragement of Science, Technology, Engineering, and Mathematics (STEM) Programs. Definition. ‘‘Science, Technology, Engineering, and Mathematics (STEM) Programs,’’ as used in this subpart, means programs or incentives, either formal or informal, that encourage the pursuit of education and experience in the science, technology, engineering, and mathematics disciplines. 226.7202 Applicability. This subpart applies to all solicitations and contracts. srobinson on DSK4SPTVN1PROD with PROPOSALS 226.7203 Policy. DoD encourages contractors to undertake actions, to the maximum extent practicable, that— (a) Enhance undergraduate, graduate, and doctoral programs in science, technology, engineering, and mathematics (referred to as ‘‘STEM’’ disciplines); (b) Make investments, such as programming and curriculum development, in STEM programs within elementary and secondary schools; (c) Encourage employees to volunteer in Title I schools in order to enhance STEM education and programs; (d) Make personnel available to advise and assist faculty at such colleges and universities in the performance of STEM research and disciplines critical to the functions of DoD; (e) Establish partnerships between the contractor and historically black colleges and universities and minority institutions for the purpose of training students in scientific disciplines; (f) Award scholarships and fellowships, and establish cooperative work-education programs in scientific disciplines; or (g) Conduct recruitment activities at historically black colleges and universities and other minority-serving institutions or offer internships or apprenticeships. 226.7204 Contract clause. The contracting officer shall insert the clause at 252.226–70XX, Encouragement of Science, Technology, Engineering, and Mathematics (STEM) Programs, in all solicitations and contracts. VerDate Mar<15>2010 16:47 Feb 27, 2013 Jkt 229001 5. Section 252.226–70XX is added to read as follows: ■ As prescribed in 226.7204, insert the following clause: Encouragement of Science, Technology, Engineering, and Mathematics (STEM) Programs (Date) (a) Definition. ‘‘Science, Technology, Engineering, and Mathematics (STEM) Programs,’’ as used in this clause, means programs and or incentives, either formal or informal, that encourage the pursuit of education and experience in the science, technology, engineering, and mathematics disciplines. (b) In accordance with section 862 of the National Defense Authorization Act for Fiscal Year 2012 (Pub. L. 112–81), the Contractor is encouraged to undertake actions, to the maximum extent practicable, that— (1) Enhance undergraduate, graduate, and doctoral programs in science, technology, engineering, and mathematics (referred to as ‘‘STEM’’ disciplines); (2) Make investments, such as programming and curriculum development, in STEM programs within elementary and secondary schools; (3) Encourage employees to volunteer in Title I schools in order to enhance STEM education and programs; (4) Make personnel available to advise and assist faculty at such colleges and universities in the performance of STEM research and disciplines critical to the functions of DoD; (5) Establish partnerships between the contractor and historically black colleges and universities and minority institutions for the purpose of training students in scientific disciplines; (6) Award scholarships and fellowships, and establish cooperative work-education programs in scientific disciplines; or (7) Conduct recruitment activities at historically black colleges and universities and other minority-serving institutions or offer internships or apprenticeships. (c) Costs. (1) The Contractor shall assume the responsibility for all the costs and investments in support of the STEM disciplines. (2) The Contractor will not be reimbursed for any costs incurred or associated with the support of the STEM disciplines. Any costs incurred for supporting the STEM disciplines are unallowable under this contract. (End of clause) [FR Doc. 2013–04352 Filed 2–27–13; 8:45 am] BILLING CODE 5001–06–P PO 00000 Frm 00058 Fmt 4702 Sfmt 4702 DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 231 RIN 0750–AH76 Defense Federal Acquisition Regulation Supplement; Unallowable Fringe Benefit Costs (DFARS Case 2012–D038) Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Proposed rule. AGENCY: DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to explicitly state that fringe benefit costs incurred or estimated that are contrary to law, employer-employee agreement, or an established policy of the contractor are unallowable. DATES: Comments on the proposed rule should be submitted in writing to the address shown below on or before April 29, 2013, to be considered in the formation of the final rule. ADDRESSES: You may submit comments, identified by DFARS Case 2012–D038, using any of the following methods: Regulations.gov: http:// www.regulations.gov. Submit comments via the Federal eRulemaking portal by inserting ‘‘DFARS Case 2012–D038’’ under the heading ‘‘Enter keyword or ID’’ and selecting ‘‘Search.’’ Select the link ‘‘Submit a Comment’’ that corresponds with ‘‘DFARS Case 2012– D038.’’ Follow the instructions provided at the ‘‘Submit a Comment’’ screen. Please include your name, company name (if any), and ‘‘DFARS Case 2012– D038’’ on your attached document. Follow the instructions for submitting comments. Email: dfars@osd.mil. Include DFARS Case 2012–D038 in the subject line of the message. Fax: 571–372–6094. Mail: Defense Acquisition Regulations System, Attn: Ms. Amy Williams, OUSD(AT&L)DPAP(DARS), Room 3B855, 3060 Defense Pentagon, Washington, DC 20301–3060. Comments received generally will be posted without change to http:// www.regulations.gov, including any personal information provided. To confirm receipt of your comment(s), please check www.regulations.gov approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail). SUMMARY: E:\FR\FM\28FEP1.SGM 28FEP1 Federal Register / Vol. 78, No. 40 / Thursday, February 28, 2013 / Proposed Rules FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, telephone 571–372– 6106. SUPPLEMENTARY INFORMATION: I. Background DoD is proposing to revise the DFARS at 231.205–6 to implement the Director of Defense Pricing policy memo ‘‘Unallowable Costs for Ineligible Dependent Health Care Benefits, dated February 17, 2012. The rule adds paragraph 231.205–6(m)(1) to explicitly state that fringe benefit costs incurred or estimated that are contrary to law, employer-employee agreement, or an established policy of the contractor are unallowable. FAR 42.709, which implements 10 U.S.C. 2324(a) through (d) and 41 U.S.C. 4303, covers the assessment of penalties against contractors that include unallowable indirect costs in final indirect cost rate proposals or the final statement of costs incurred or estimated to be incurred under a fixed-price incentive contract. The section applies to all contracts in excess of $700,000, except fixed-price contracts without cost incentives or firm-fixed-price contracts for the purchase of commercial items. FAR 42.709–1(a) provides penalties that apply if the indirect cost is expressly unallowable under a cost principle in the FAR, or an executive agency supplement to the FAR. FAR 31.205–6(m) states that the costs of fringe benefits (which include employee health care benefits) are allowable to the extent that they are reasonable and are required by law, employer-employee agreement, or an established policy of the contractor. Although fringe benefit costs that do not meet these criteria are not allowable, the FAR does not make them expressly unallowable. Specifying these fringe benefit costs as expressly unallowable in the DFARS makes it clear that the penalties at FAR 42.709–1 are applicable if a contractor includes such unallowable fringe benefit costs in a final indirect cost rate proposal or in the final statement of costs incurred or estimated to be incurred under a fixedprice incentive contract. srobinson on DSK4SPTVN1PROD with PROPOSALS II. 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 VerDate Mar<15>2010 16:47 Feb 27, 2013 Jkt 229001 equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Office of Information and Regulatory Affairs has determined that 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. III. Regulatory Flexibility Act DoD has prepared an initial regulatory flexibility analysis consistent with 5 U.S.C. 603. A copy of the analysis may be obtained from the point of contact specified herein. The analysis is summarized as follows: DoD does not expect this proposed rule to 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 this rule will only impact entities that are submitting covered proposals containing unallowable indirect fringe benefit costs. FAR 31.205–6(m) already states what fringe benefit costs are allowable. This rule provides explicit clarification that fringe benefit costs incurred or estimated that are contrary to law, employer-employee agreement, or an established policy of the contractor are unallowable. If this rule takes effect, the penalties at FAR 42.709–1 will apply to any entity that includes such unallowable indirect charges in a final indirect cost rate proposal or the final statement of costs incurred or estimated to be incurred under a fixed-price incentive contract for a contract that exceeds $700,000. At this time, DoD is unable to estimate the number of small entities to which this rule will apply. According to FPDS date for FY 2012, there were approximately 3000 contract awards exceeding $700,000 to small entities, excluding fixed-price contracts without cost incentives or any firm-fixed–price contract for the purchase of commercial items. We estimate that a very small percentage of the entities receiving these awards would be submitting covered proposals containing unallowable fringe benefit costs. DoD invites comments from small business concerns and other interested parties on the expected impact of this rule on small entities. DoD will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 PO 00000 Frm 00059 Fmt 4702 Sfmt 4702 13607 U.S.C. 610 (DFARS Case 2012–D038) in correspondence. IV. Paperwork Reduction Act The 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 Part 231. Government procurement. Manuel Quinones, Editor, Defense Acquisition Regulations System. Therefore, DoD proposes to amend 48 CFR parts 231 as follows: PART 231—CONTRACT COST PRINCIPLES AND PROCEDURES 1. The authority citation for 48 CFR part 231 continues to read as follows: ■ Authority: 41 U.S.C. 1303 and 48 CFR chapter 1. 2. Section 231.205–6 is amended by adding paragraph (m)(1) to read as follows: ■ 231.205–6 services. Compensation for personal * * * * * (m)(1) Fringe benefit costs incurred or estimated that are contrary to law, employer-employee agreement, or an established policy of the contractor are unallowable. [FR Doc. 2013–04353 Filed 2–27–13; 8:45 am] BILLING CODE 5001–06–P DEPARTMENT OF TRANSPORTATION Federal Motor Carrier Safety Administration 49 CFR Parts 380, 383, and 384 [Docket No. FMCSA–2007–27748] Minimum Training Requirements for Entry-Level Commercial Motor Vehicle Operators; Public Listening Session Federal Motor Carrier Safety Administration (FMCSA), DOT. ACTION: Notice of public listening session. AGENCY: FMCSA announces that it will hold a public listening session to solicit ideas and information on the issue of entry-level training for drivers of commercial motor vehicles (CMVs). Specifically, the Agency solicits input on factors, issues, and data it should consider in anticipation of a rulemaking to implement the entry-level driver SUMMARY: E:\FR\FM\28FEP1.SGM 28FEP1

Agencies

[Federal Register Volume 78, Number 40 (Thursday, February 28, 2013)]
[Proposed Rules]
[Pages 13606-13607]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-04353]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 231

RIN 0750-AH76


Defense Federal Acquisition Regulation Supplement; Unallowable 
Fringe Benefit Costs (DFARS Case 2012-D038)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Proposed rule.

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

SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to explicitly state that fringe benefit 
costs incurred or estimated that are contrary to law, employer-employee 
agreement, or an established policy of the contractor are unallowable.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before April 29, 2013, to be considered 
in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2012-D038, 
using any of the following methods:
    Regulations.gov: http://www.regulations.gov. Submit comments via 
the Federal eRulemaking portal by inserting ``DFARS Case 2012-D038'' 
under the heading ``Enter keyword or ID'' and selecting ``Search.'' 
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case 
2012-D038.'' Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``DFARS Case 2012-D038'' on your attached document. Follow the 
instructions for submitting comments.
    Email: dfars@osd.mil. Include DFARS Case 2012-D038 in the subject 
line of the message.
    Fax: 571-372-6094.
    Mail: Defense Acquisition Regulations System, Attn: Ms. Amy 
Williams, OUSD(AT&L)DPAP(DARS), Room 3B855, 3060 Defense Pentagon, 
Washington, DC 20301-3060.
    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided. To 
confirm receipt of your comment(s), please check www.regulations.gov 
approximately two to three days after submission to verify posting 
(except allow 30 days for posting of comments submitted by mail).

[[Page 13607]]


FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, telephone 571-372-
6106.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD is proposing to revise the DFARS at 231.205-6 to implement the 
Director of Defense Pricing policy memo ``Unallowable Costs for 
Ineligible Dependent Health Care Benefits, dated February 17, 2012. The 
rule adds paragraph 231.205-6(m)(1) to explicitly state that fringe 
benefit costs incurred or estimated that are contrary to law, employer-
employee agreement, or an established policy of the contractor are 
unallowable.
    FAR 42.709, which implements 10 U.S.C. 2324(a) through (d) and 41 
U.S.C. 4303, covers the assessment of penalties against contractors 
that include unallowable indirect costs in final indirect cost rate 
proposals or the final statement of costs incurred or estimated to be 
incurred under a fixed-price incentive contract. The section applies to 
all contracts in excess of $700,000, except fixed-price contracts 
without cost incentives or firm-fixed-price contracts for the purchase 
of commercial items. FAR 42.709-1(a) provides penalties that apply if 
the indirect cost is expressly unallowable under a cost principle in 
the FAR, or an executive agency supplement to the FAR.
    FAR 31.205-6(m) states that the costs of fringe benefits (which 
include employee health care benefits) are allowable to the extent that 
they are reasonable and are required by law, employer-employee 
agreement, or an established policy of the contractor. Although fringe 
benefit costs that do not meet these criteria are not allowable, the 
FAR does not make them expressly unallowable. Specifying these fringe 
benefit costs as expressly unallowable in the DFARS makes it clear that 
the penalties at FAR 42.709-1 are applicable if a contractor includes 
such unallowable fringe benefit costs in a final indirect cost rate 
proposal or in the final statement of costs incurred or estimated to be 
incurred under a fixed-price incentive contract.

II. 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. 
The Office of Information and Regulatory Affairs has determined that 
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.

III. Regulatory Flexibility Act

    DoD has prepared an initial regulatory flexibility analysis 
consistent with 5 U.S.C. 603. A copy of the analysis may be obtained 
from the point of contact specified herein. The analysis is summarized 
as follows:
    DoD does not expect this proposed rule to 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 this rule will only impact entities that are submitting covered 
proposals containing unallowable indirect fringe benefit costs. FAR 
31.205-6(m) already states what fringe benefit costs are allowable. 
This rule provides explicit clarification that fringe benefit costs 
incurred or estimated that are contrary to law, employer-employee 
agreement, or an established policy of the contractor are unallowable. 
If this rule takes effect, the penalties at FAR 42.709-1 will apply to 
any entity that includes such unallowable indirect charges in a final 
indirect cost rate proposal or the final statement of costs incurred or 
estimated to be incurred under a fixed-price incentive contract for a 
contract that exceeds $700,000.
    At this time, DoD is unable to estimate the number of small 
entities to which this rule will apply. According to FPDS date for FY 
2012, there were approximately 3000 contract awards exceeding $700,000 
to small entities, excluding fixed-price contracts without cost 
incentives or any firm-fixed-price contract for the purchase of 
commercial items. We estimate that a very small percentage of the 
entities receiving these awards would be submitting covered proposals 
containing unallowable fringe benefit costs. DoD invites comments from 
small business concerns and other interested parties on the expected 
impact of this rule on small entities.
    DoD will also consider comments from small entities concerning the 
existing regulations in subparts affected by this rule in accordance 
with 5 U.S.C. 610. Interested parties must submit such comments 
separately and should cite 5 U.S.C. 610 (DFARS Case 2012-D038) in 
correspondence.

IV. Paperwork Reduction Act

    The 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 Part 231.

    Government procurement.

Manuel Quinones,
Editor, Defense Acquisition Regulations System.

    Therefore, DoD proposes to amend 48 CFR parts 231 as follows:

PART 231--CONTRACT COST PRINCIPLES AND PROCEDURES

0
1. The authority citation for 48 CFR part 231 continues to read as 
follows:

     Authority:  41 U.S.C. 1303 and 48 CFR chapter 1.

0
2. Section 231.205-6 is amended by adding paragraph (m)(1) to read as 
follows:


231.205-6  Compensation for personal services.

* * * * *
    (m)(1) Fringe benefit costs incurred or estimated that are contrary 
to law, employer-employee agreement, or an established policy of the 
contractor are unallowable.
[FR Doc. 2013-04353 Filed 2-27-13; 8:45 am]
BILLING CODE 5001-06-P