Federal Acquisition Regulation; Changes to Time-and-Materials and Labor-Hour Contracts and Orders, 13766-13767 [2013-04600]

Download as PDF 13766 Federal Register / Vol. 78, No. 40 / Thursday, February 28, 2013 / Rules and Regulations IV. Paperwork Reduction Act The interim 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). V. Determination To Issue an Interim Rule A determination has been made under the authority of the Secretary of Defense (DoD), the Administrator of General Services (GSA), and the Administrator of the National Aeronautics and Space Administration (NASA) that urgent and compelling reasons exist to promulgate this interim rule without prior opportunity for public comment. This action is necessary because section 515 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2012 (Pub. L. 112–81) was enacted on December 31, 2011, and was effective upon enactment. Section 515 provided the legal basis for declaration of contingency operations and the exercise of related procurement flexibilities in support of Hurricane Sandy relief in October 2012. It remains necessary to implement the statute by revising the definition of ‘‘contingency operation’’ in FAR 2.101 to ensure regulatory conformance with statute. However, pursuant to 41 U.S.C. 1707 and FAR 1.501–3(b), DoD, GSA, and NASA will consider public comments received in response to this interim rule in the formation of the final rule. Government procurement. Dated: February 20, 2013. Laura Auletta, Director, Office of Governmentwide Acquisition Policy, Office of Acquisition Policy, Office of Governmentwide Policy. Therefore, DoD, GSA, and NASA amend 48 CFR part 2 as set forth below: PART 2—DEFINITIONS OF WORDS AND TERMS 1. The authority citation for 48 CFR part 2 continues to read as follows: ■ Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20115. 2. Amend section 2.101, in paragraph (b)(2), by revising paragraph (2) of the definition ‘‘Contingency operation’’ to read as follows: srobinson on DSK4SPTVN1PROD with RULES2 2.101 * Definitions. * * * * (b) * * * (2) * * * Contingency operation * * * VerDate Mar<15>2010 19:28 Feb 27, 2013 Jkt 229001 [FR Doc. 2013–04599 Filed 2–27–13; 8:45 am] BILLING CODE 6820–EP–P DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 8, 12, 16, and 52 [FAC 2005–66; FAR Case 2011–025; Item II; Docket 2011–0025, Sequence 1] RIN 9000–AM28 Federal Acquisition Regulation; Changes to Time-and-Materials and Labor-Hour Contracts and Orders Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Final rule. AGENCY: DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to provide additional guidance when raising the ceiling price or otherwise changing the scope of work for a timeand-materials (T&M) or labor-hour (LH) contract or order. DATES: Effective April 1, 2013. FOR FURTHER INFORMATION CONTACT: Mr. Michael O. Jackson, Procurement Analyst, at 202–208–4949, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202–501–4755. Please cite FAC 2005–66, FAR Case 2011–025. SUPPLEMENTARY INFORMATION: SUMMARY: List of Subject in 48 CFR Part 2 ■ (2) Results in the call or order to, or retention on, active duty of members of the uniformed services under sections 688, 12301(a), 12302, 12304, 12304a, 12305, or 12406 of title 10 of the United States Code, Chapter 15 of title 10 of the United States Code, or any other provision of law during a war or during a national emergency declared by the President or Congress. * * * * * I. Background DoD, GSA, and NASA published a proposed rule in the Federal Register at 77 FR 43780 on July 26, 2012, to address actions required when raising the ceiling price or otherwise changing the general scope of a T&M or LH contract or order. One respondent submitted a comment on the proposed rule. PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 II. Discussion and Analysis The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the public comment in the development of the final rule. The comment submitted agreed with the intent of the rule and praised it as a helpful change. The final rule is published without change from the proposed rule. III. Executive Order 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 (OIRA) has deemed 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, and that this rule is not a major rule under 5 U.S.C. 804. IV. Regulatory Flexibility Act DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows: In finalizing FAR rule 2009–043 Time-andMaterials and Labor-Hour Contracts for Commercial Items it became apparent that the guidance in the FAR on raising the ceiling price for a T&M or LH contract or order was not clear or consistent throughout the FAR. This case was opened to clarify the procedures necessary to raise the ceiling price of a T&M or LH contract or order. No significant issues were raised by the public and no changes were made to the proposed rule. No comments were submitted by the Chief Counsel for Advocacy of the Small Business Administration. This rule deals with the administration of T&M and LH contracts and orders and will have no direct effect on contractors. In FY2011 the Federal Government awarded 23,023 T&M and LH contracts or orders of which 6,315 went to small businesses. This rule will not affect how many small businesses are awarded this type of contract. This rule does not add any new information collection requirements. Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat E:\FR\FM\28FER2.SGM 28FER2 Federal Register / Vol. 78, No. 40 / Thursday, February 28, 2013 / Rules and Regulations has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration. V. 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 8, 12, 16, and 52 Government procurement. Dated: February 20, 2013. Laura Auletta, Director, Office of Governmentwide Acquisition Policy, Office of Acquisition Policy, Office of Governmentwide Policy. PART 16—TYPES OF CONTRACTS 16.504 Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113. PART 8—REQUIRED SOURCES OF SUPPLIES AND SERVICES 2. Amend section 8.404 by revising paragraph (h)(3)(iv) to read as follows: ■ Use of Federal Supply Schedules. * * * * * (h) * * * (3) * * * (iv) Prior to an increase in the ceiling price of a time-and-materials or laborhour order, the ordering activity shall— (A) Conduct an analysis of pricing and other relevant factors to determine if the action is in the best interest of the Government and document the order file; (B) Follow the procedures at 8.405–6 for a change that modifies the general scope of the order; and (C) Comply with the requirements at 8.402(f) when modifying an order to add open market items. PART 12—ACQUISITION OF COMMERCIAL ITEMS srobinson on DSK4SPTVN1PROD with RULES2 Contract type. * * * * (b)(1) * * * (ii) * * * (C) Prior to increasing the ceiling price of a time-and-materials or laborhour contract or order, shall— (1) Conduct an analysis of pricing and other relevant factors to determine if the VerDate Mar<15>2010 19:28 Feb 27, 2013 Jkt 229001 16.505 Ordering. * * * * * (b) * * * (4) For additional requirements for cost reimbursement orders see 16.301– 3. (5) For additional requirements for time-and-materials or labor-hour orders, see 16.601(e). * * * * * ■ 6. Amend section 16.601 by— ■ a. Removing from paragraph (c)(2)(i) ‘‘(see 16.601(e)(1))’’ and adding ‘‘(see 16.601(f)(1))’’ in its place; ■ b. Revising the paragraph (d) introductory text and paragraph (d)(2); ■ c. Redesignating paragraph (e) as paragraph (f); and ■ d. Adding a new paragraph (e) to read as follows. Time-and-materials contracts. * 3. Amend section 12.207 by revising paragraph (b)(1)(ii)(C) to read as follows: * 4. Amend section 16.504 by removing from paragraph (a)(4)(v) ‘‘(see 16.505(b)(6))’’ and adding ‘‘(see 16.505(b)(8))’’ in its place. ■ 5. Amend section 16.505 by— ■ a. Removing from paragraph (b)(1)(iv)(E) ‘‘paragraph (b)(4)’’ and adding ‘‘paragraph (b)(6)’’ in its place; ■ b. Redesignating paragraphs (b)(4) through paragraphs (6) as paragraphs (b)(6) through (8), respectively; and ■ c. Adding new paragraphs (b)(4) and (5) to be read as follows: 16.601 ■ 12.207 [Amended] contract or order, the contracting officer shall— (1) Conduct an analysis of pricing and other relevant factors to determine if the action is in the best interest of the Government; (2) Document the decision in the contract or order file; and (3) When making a change that modifies the general scope of— (i) A contract, follow the procedures at 6.303; (ii) An order issued under the Federal Supply Schedules, follow the procedures at 8.405–6; or (iii) An order issued under multiple award task and delivery order contracts, follow the procedures at 16.505(b)(2). * * * * * ■ Therefore, DoD, GSA, and NASA amend 48 CFR parts 8, 12, 16, and 52 as set forth below: ■ 1. The authority citation for 48 CFR parts 8, 12, 16, and 52 is revised to read as follows: 8.404 action is in the best interest of the Government; (2) Document the decision in the contract or order file; and (3) When making a change that modifies the general scope of— (i) A contract, follow the procedures at 6.303; (ii) An order issued under the Federal Supply Schedules, follow the procedures at 8.405–6; or (iii) An order issued under multiple award task and delivery order contracts, follow the procedures at 16.505(b)(2). * * * * * 13767 * * * * (d) Limitations. A time-and-materials contract or order may be used only if— * * * * * (2) The contract or order includes a ceiling price that the contractor exceeds at its own risk. Also see 12.207(b) for further limitations on use of time-andmaterials or labor-hour contracts for acquisition of commercial items. (e) Post award requirements. Prior to an increase in the ceiling price of a time-and-materials or labor-hour PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 52.216–29 [Amended] 7. Amend section 52.216–29 introductory text by removing from ‘‘16.601(e)(1)’’ and adding ‘‘16.601(f)(1)’’ in its place. ■ 52.216–30 [Amended] 8. Amend section 52.216–30 by removing from the ‘‘16.601(e)(2)’’ and adding ‘‘16.601(f)(2)’’ in its place. ■ 52.216–31 [Amended] 9. Amend section 52.216–31 introductory text by removing ‘‘16.601(e)(3)’’ and adding ‘‘16.601(f)(3)’’ in its place. ■ [FR Doc. 2013–04600 Filed 2–27–13; 8:45 am] BILLING CODE 6820–EP–P DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Part 13 [FAC 2005–66; FAR Case 2013–007; Item III; Docket 2013–0007, Sequence 1] RIN 9000–AM47 Federal Acquisition Regulation; Extension of Authority for Use of Simplified Acquisition Procedures for Certain Commercial Items Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Final rule. AGENCY: DoD, GSA, and NASA are issuing a final rule amending the SUMMARY: E:\FR\FM\28FER2.SGM 28FER2

Agencies

[Federal Register Volume 78, Number 40 (Thursday, February 28, 2013)]
[Rules and Regulations]
[Pages 13766-13767]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-04600]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 8, 12, 16, and 52

[FAC 2005-66; FAR Case 2011-025; Item II; Docket 2011-0025, Sequence 1]
RIN 9000-AM28


Federal Acquisition Regulation; Changes to Time-and-Materials and 
Labor-Hour Contracts and Orders

AGENCY: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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

SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the 
Federal Acquisition Regulation (FAR) to provide additional guidance 
when raising the ceiling price or otherwise changing the scope of work 
for a time-and-materials (T&M) or labor-hour (LH) contract or order.

DATES: Effective April 1, 2013.

FOR FURTHER INFORMATION CONTACT: Mr. Michael O. Jackson, Procurement 
Analyst, at 202-208-4949, for clarification of content. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat at 202-501-4755. Please cite FAC 2005-66, FAR Case 2011-
025.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 77 FR 43780 on July 26, 2012, to address actions required 
when raising the ceiling price or otherwise changing the general scope 
of a T&M or LH contract or order. One respondent submitted a comment on 
the proposed rule.

II. Discussion and Analysis

    The Civilian Agency Acquisition Council and the Defense Acquisition 
Regulations Council (the Councils) reviewed the public comment in the 
development of the final rule. The comment submitted agreed with the 
intent of the rule and praised it as a helpful change. The final rule 
is published without change from the proposed rule.

III. Executive Order 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 (OIRA) has deemed 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, and that this rule is not a major 
rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

    DoD, GSA, and NASA have prepared a Final Regulatory Flexibility 
Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 
U.S.C. 601, et seq. The FRFA is summarized as follows:

    In finalizing FAR rule 2009-043 Time-and-Materials and Labor-
Hour Contracts for Commercial Items it became apparent that the 
guidance in the FAR on raising the ceiling price for a T&M or LH 
contract or order was not clear or consistent throughout the FAR. 
This case was opened to clarify the procedures necessary to raise 
the ceiling price of a T&M or LH contract or order.
    No significant issues were raised by the public and no changes 
were made to the proposed rule.
    No comments were submitted by the Chief Counsel for Advocacy of 
the Small Business Administration.
    This rule deals with the administration of T&M and LH contracts 
and orders and will have no direct effect on contractors. In FY2011 
the Federal Government awarded 23,023 T&M and LH contracts or orders 
of which 6,315 went to small businesses. This rule will not affect 
how many small businesses are awarded this type of contract.
    This rule does not add any new information collection 
requirements.

    Interested parties may obtain a copy of the FRFA from the 
Regulatory Secretariat. The Regulatory Secretariat

[[Page 13767]]

has submitted a copy of the FRFA to the Chief Counsel for Advocacy of 
the Small Business Administration.

V. 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 8, 12, 16, and 52

    Government procurement.

    Dated: February 20, 2013.
Laura Auletta,
Director, Office of Governmentwide Acquisition Policy, Office of 
Acquisition Policy, Office of Governmentwide Policy.
    Therefore, DoD, GSA, and NASA amend 48 CFR parts 8, 12, 16, and 52 
as set forth below:

0
1. The authority citation for 48 CFR parts 8, 12, 16, and 52 is revised 
to read as follows:

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 
U.S.C. 20113.

PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES

0
2. Amend section 8.404 by revising paragraph (h)(3)(iv) to read as 
follows:


8.404  Use of Federal Supply Schedules.

* * * * *
    (h) * * *
    (3) * * *
    (iv) Prior to an increase in the ceiling price of a time-and-
materials or labor-hour order, the ordering activity shall--
    (A) Conduct an analysis of pricing and other relevant factors to 
determine if the action is in the best interest of the Government and 
document the order file;
    (B) Follow the procedures at 8.405-6 for a change that modifies the 
general scope of the order; and
    (C) Comply with the requirements at 8.402(f) when modifying an 
order to add open market items.

PART 12--ACQUISITION OF COMMERCIAL ITEMS

0
3. Amend section 12.207 by revising paragraph (b)(1)(ii)(C) to read as 
follows:


12.207  Contract type.

* * * * *
    (b)(1) * * *
    (ii) * * *
    (C) Prior to increasing the ceiling price of a time-and-materials 
or labor-hour contract or order, shall--
    (1) Conduct an analysis of pricing and other relevant factors to 
determine if the action is in the best interest of the Government;
    (2) Document the decision in the contract or order file; and
    (3) When making a change that modifies the general scope of--
    (i) A contract, follow the procedures at 6.303;
    (ii) An order issued under the Federal Supply Schedules, follow the 
procedures at 8.405-6; or
    (iii) An order issued under multiple award task and delivery order 
contracts, follow the procedures at 16.505(b)(2).
* * * * *

PART 16--TYPES OF CONTRACTS


16.504  [Amended]

0
4. Amend section 16.504 by removing from paragraph (a)(4)(v) ``(see 
16.505(b)(6))'' and adding ``(see 16.505(b)(8))'' in its place.

0
5. Amend section 16.505 by--
0
a. Removing from paragraph (b)(1)(iv)(E) ``paragraph (b)(4)'' and 
adding ``paragraph (b)(6)'' in its place;
0
b. Redesignating paragraphs (b)(4) through paragraphs (6) as paragraphs 
(b)(6) through (8), respectively; and
0
c. Adding new paragraphs (b)(4) and (5) to be read as follows:


16.505  Ordering.

* * * * *
    (b) * * *
    (4) For additional requirements for cost reimbursement orders see 
16.301-3.
    (5) For additional requirements for time-and-materials or labor-
hour orders, see 16.601(e).
* * * * *

0
6. Amend section 16.601 by--
0
a. Removing from paragraph (c)(2)(i) ``(see 16.601(e)(1))'' and adding 
``(see 16.601(f)(1))'' in its place;
0
b. Revising the paragraph (d) introductory text and paragraph (d)(2);
0
c. Redesignating paragraph (e) as paragraph (f); and
0
d. Adding a new paragraph (e) to read as follows.


16.601  Time-and-materials contracts.

* * * * *
    (d) Limitations. A time-and-materials contract or order may be used 
only if--
* * * * *
    (2) The contract or order includes a ceiling price that the 
contractor exceeds at its own risk. Also see 12.207(b) for further 
limitations on use of time-and-materials or labor-hour contracts for 
acquisition of commercial items.
    (e) Post award requirements. Prior to an increase in the ceiling 
price of a time-and-materials or labor-hour contract or order, the 
contracting officer shall--
    (1) Conduct an analysis of pricing and other relevant factors to 
determine if the action is in the best interest of the Government;
    (2) Document the decision in the contract or order file; and
    (3) When making a change that modifies the general scope of--
    (i) A contract, follow the procedures at 6.303;
    (ii) An order issued under the Federal Supply Schedules, follow the 
procedures at 8.405-6; or
    (iii) An order issued under multiple award task and delivery order 
contracts, follow the procedures at 16.505(b)(2).
* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


52.216-29  [Amended]

0
7. Amend section 52.216-29 introductory text by removing from 
``16.601(e)(1)'' and adding ``16.601(f)(1)'' in its place.


52.216-30  [Amended]

0
8. Amend section 52.216-30 by removing from the ``16.601(e)(2)'' and 
adding ``16.601(f)(2)'' in its place.


52.216-31  [Amended]

0
9. Amend section 52.216-31 introductory text by removing 
``16.601(e)(3)'' and adding ``16.601(f)(3)'' in its place.
[FR Doc. 2013-04600 Filed 2-27-13; 8:45 am]
BILLING CODE 6820-EP-P